Dim Sums: Agricultural Markets in China

China's strength in agriculture gives the country confidence to face trade friction, the country's ag minister said in an article posted on the communist party's Peoples Daily website today . Minister Han Changfu said a sixth-straight 600-million-ton fall grain harvest is just 10 days away, providing food security "ballast." Han spent most of the article reciting improvements in farm policy, rural development, and ecological balance that give the economy "room to maneuver" against economic risks. The only mention of the United States is a sentence citing a $16.4 billion agricultural trade deficit with the U.S. in 2017, but the trade war is in the background of the article. The main thrust if the remarks is to emphasize China's commitment to globalization in agriculture and the resilience of its rural economy in the ongoing trade war with the United States. Han finished his remarks by touting China's rising degree of openness and internation...

China is replacing the "QS" food safety logo found on most food packages with a digital "SC" code as of October 1. The blue QS logo (stylized English letters signifying "Quality Safety") was introduced more than a decade ago to signify that food manufacturers had passed a food safety audit that was good for 3 years. Regulations introduced after enactment of the 2015 Food Safety Law called for the SC code to replace the QS logo. "SC" represents the Chinese pinyin "Shengchan", or production, which identifies the licensed producer and its location. The code's 14 digits represent the food code, province, city, and county where it was produced, and a code for the company. The digital code is said to be better suited for digital traceability systems. According to a journalist in Yangzhou, most of the packages carrying QS logos have already disappeared from stores as manufacturers phased out the symbol. The blue QS logo (above) on...

Chinese customs officials say they are cracking down on "rampant" pork smuggling to prevent further spread of African swine fever and downward pressure on domestic pork prices. On August 24, Chinese coast guard officials apprehended a ship carrying over 300 metric tons of chicken feet, frozen pork, feet, ears, and tongues. Officials claim to have seized of 15,000 metric tons of meat in 6 meat smuggling cases from April 25 to May 25.  Comic shows a stream of ants carrying loads of "smuggled zombie meat" through a tunnel into "China" The article notes that meat smuggling is cyclical: it rises when Chinese pork prices are higher than foreign prices and falls when Chinese prices fall. The article estimates that smuggling of frozen pork and offal totals 500,000 metric tons in a normal year, but rises to over 1 million metric tons when prices are high. The article estimates that 100,000 live hogs are smuggled into the country annually. The article claims t...

China's imports of most agricultural and food commodities have grown in the first 8 months of 2018, but imports from the United States fell sharply as retaliatory tariffs took effect July 6. Since April, China's reporting of foreign trade data has been limited to a handful of monthly bulletins posted on the customs administration's web site. Piecing these together, it's possible to get a crude picture of how Chinese agricultural imports are faring during the "trade war" with the United States. Approximating agricultural imports by adding up HS chapters 01-24 and 52 shows that China's imports of farm products from other countries was up about 16.5 percent year-on-year for January-August 2018, while imports from the U.S. were down 1.9 percent. The United States accounted for 18 percent of ag imports by this definition. Soybeans are by far China's largest agricultural import, valued at $26.8 billion in January-August 2018. China imported 62 million...

Chinese officials say they will cut back on use of soybean meal in animal diets this year in order to accommodate lower expected imports of soybeans from the United States. At least one Chinese official has said that his country has been consuming "too much" soybean meal and has room to cut back. The Ministry of Agriculture and Rural Affairs' September CASDE report cut its estimate of 2018/19 soybean imports to 84 mmt from 94 mmt last month. China has spent the last two decades building a dependence on soybean meal that cannot be easily broken. Let's take a look at the numbers. China is by far the top consumer of soybean meal in the world. The USDA Production, Distribution and Supply database shows that China consumed over 70 million metric tons of soybean meal during 2017/18, while the number-2 and number-3 consumers, U.S. and EU, each consumed less than half as much as China. Brazil--with the world's most plentiful supplies of soybeans--used only 17.5 mmt. O...

With new cases confirmed recently in Inner Mongolia, Anhui, and Heilongjiang Provinces, China has had 18 outbreaks of African Swine Fever from August 1 to September 17. Cases have been widely spread, but Anhui Province has been hardest hit with 8 confirmed cases so far, including the latest on Monday. Other cases were confirmed on farms in Inner Mongolia and Henan Province last week.  China has had 18 cases of African swine fever confirmed as of September 17 Emergency measures have been adopted to cull swine, disinfect farms and stop transportation of pigs in the areas surrounding farms where the virus has been discovered. There is great uncertainty about the impact of African swine fever on retail markets and prices. The Ministry of Commerce issued a notice ordering local commerce officials to pay close attention to possible effects of African swine fever and other animal diseases on food markets during the mid-Autumn Festival next week and the National Day Holiday coming...

Chinese authorities are cracking down on rural villas disguised as greenhouses to skirt bans on residential use of land zoned for crop production. News media have been reporting instances of villas, resorts, and restaurants built around a greenhouse or hidden inside a giant greenhouse. The "greenhouse villas" (大棚房) skirt rules forbidding nonagricultural use of land designated for grain production or as "permanent farmland" by building a greenhouse and calling it a "modern agriculture" project. Most of the structures are occupied or operated by city people from outside the village that owns the land. Such developments are found all over the country. A resort-type building and landscaping being constructed inside a greenhouse to evade restrictions on developing farmland. A fancy teahouse built inside a greenhouse. China Central Television reported finding an entire real estate development hidden under greenhouses that had been approved as a ...

A Chinese company is seeking Argentine approval for a genetically modified soybean strain that would be grown in South America and exported back to China. This appears to be a gambit to break down Chinese consumers' resistance to commercializing GM crops in China. By demonstrating that foreign scientists think GM seeds are safe, Chinese government and industry leaders hope consumers will give up their resistance to allowing GM food crops to be grown in China. According to Science and Technology Daily , Da Bei Nong (also known as DBN) Group, a feed, seed and crop protection company based in Beijing, has spent three years seeking Argentine approval to commercialize a GMO soybean variety that is resistant to both glyphosate and glufinosate--two common herbicides. DBN is working with Argentine company Bioceres to gain the approval and eventually develop marketing channels for the seed in Argentina. This has also been r eported by an international organization ISAAA . The Science an...