Dim Sums: Agricultural Markets in China

China continued to import minimal volumes of U.S. soybeans during January 2019, while increased imports of Brazilian, Canadian and Argentine soybeans filled most of the vacuum. Chinese customs data show that China imported 7.38 million metric tons (mmt) of soybeans during January 2019, 1.1 mmt less than in January 2018. China imported 25 mmt of soybeans in the first four months of the 2018/19 marketing year (October 2018-January 2019), of which 20.9 mmt were imported from Brazil and 2.2 mmt were from Canada. The United States supplied just 272,035 mt--a whopping 1-percent market share.  During January, China imported only 135,777 metric tons (mt) of U.S. soybeans--about two Panamax cargoes--compared with 5,814,257 mt a year ago.  Brazil was again the top supplier in January, with 4.9 mmt. Imports from Brazil were up 2.86 mmt from a year earlier.  Imports from Canada jumped to their highest-ever monthly total of 1.23 mmt, 957,000 mt more than a year earlier.  Im...

Most analysts think China now has a substantial deficit between its production and use of corn which is being filled by dumping a purportedly huge stockpile into the market. Does that mean China will eventually become a major corn importer when the stockpile is depleted? No one really knows for sure because every component of supply and demand is clouded by uncertainty. Last fall, Chinese statisticians adjusted their estimate of corn production upward by 20 percent after discovering 42 million metric tons of additional corn they didn't know about. The statisticians claimed that the country produced 259 mmt in 2017/18, but the grain bureaucracy reported that only 98 mmt was purchased. Authorities claimed to have auctioned off an implausible 100 mmt of corn from implausibly large stockpiles during April-October 2018. We know that China imports 2-to-3 mmt of corn. But imports of corn substitutes--sorghum, DDGS, barley, cassava and cassava starch--have fluctuated, affecting corn c...

China's Central Document no. 1 proclaims the importance of doing a good job on rural affairs work in 2019 in view of the challenges of "downward pressure on the economy" and "profound changes in the external environment." Communist leaders insist that emphasis on rural affairs must be unwavering to maintain the "ballast stone" role of rural people, agriculture and the countryside to respond to various challenges and "win the initiative." The 2019 document announces ambitions to "decisively win the fight against poverty." It includes many ambitious reforms of rural land and governance institutions, promises to construct rural infrastructure, to make the countryside more livable, and to improve rural governance that are already underway. The document emphasizes that these initiatives are especially important this year because 2019 and 2020 are key years for achieving the "all-round relatively well-off society" and prepari...

Meat smugglers continue to evade Chinese authorities, but shipments are smaller and more fragmented after several years of elevated enforcement efforts, customs officials say. Customs authorities publicized several seizures of smuggled meat in January, ahead of the spring festival holiday: On January 22, authorities in Nanning intercepted a caravan of 7 small vans and a large truck packed with 8,000 kg of beef, beef offal, and chicken feet with foreign-language labels. Three drivers were arrested.  On January 27, police seized a truck near a tollbooth in Poshan City, Yunnan Province that was loaded with 30,000 kg of pork labeled in foreign language and lacking inspection and customs documentation.  On January 30, Hong Kong authorities seized a fishing boat carrying 200,000 kg of smuggled frozen meat.  Vans intercepted in Guangxi Province reportedly carried 1000 kg each of smuggled meat. Also in January, customs officials reported to State media that their...

China is launching a food safety monitoring plan that aims to collect and test over 1.3 million food samples annually. The plan calls for "double random" selection of randomly-chosen food items from randomly-chosen manufacturers, markets, restaurants, cafeterias and distributors. The testing program also covers imported foods and food products sold through e-commerce platforms. Results are to be made public in a timely manner. The program was announced by the State Administration for Market Regulation in January 2019. Responsibility for carrying out 1,339,600 tests of 259 kinds of food will be allocated among the central market regulation department, provincial, and city/county bureaus. sampling should be spread throughout the year and focused seasonally or heightened during holidays, according to the program description. The central administration will collect and test 20,600 "double random" samples that focus on large companies, major wholesale markets with a...

African swine fever (ASF) is having its most severe impact on the financial performance of Chinese companies hit by plunging prices, tight credit, lockdowns on pig shipments and culls of pigs, according to 2018 financial results released by the companies last month. Chuying Agro-Pastoral may be the most prominent victim of what one writer has dubbed a "dragon head crisis." Chuying ran short of cash in November and asked bondholders to accept payment in hams, gift boxes and wine. The company has been accused of devoting too much of its cash flow to "high finance" and internet gaming.  Chuying's latest estimate is a net loss of -1.9 to -3.3 billion yuan for 2018 after posting profits during the previous three years. The net loss was about 300-million yuan worse than the company had projected in its third quarter 2018 report. Chuying Agro-Pastoral said sales were hurt by the lockdown of interprovincial swine movements imposed to prevent spread of ASF. Wor...