Dim Sums: Agricultural Markets in China

A journalist found swine inventories were only 5-to-20 percent of normal in 7 of 10 Chinese counties visited this month. This and several other surveys dug out of the Chinese internet reveal the degree to which hog numbers were decimated by African swine fever and the real challenges facing recovery. Facts on the ground are in sharp contrast to propaganda about rebounding production being trumpeted by Chinese news media. The article, " Inventories have fallen again in 10 major nationally-known swine-raising counties! At the end of the year inventories have fallen 75% since June in Xiangtan, Longyan, and Qionglai " was originally published by Nong Cai Bao Dian's (农财宝典) livestock news based in Guangdong Province (the site now appears to be inaccessible). The journalist followed up an earlier report on swine numbers in these counties by checking official statistics and interviewing local industry people. The journalist described her data as "rough" estimates and...

Winning the "war on poverty" is China's rural policy priority for next year, but worries about grain supplies received a surprising amount of attention at the "rural work meeting" for Chinese officials held last week. Trade with the United States does not appear to have been formally discussed, but the urgency to increase rural income and bolster profits for grain producers emphasized at the meeting appear to clash with China's commitment to import more U.S. commodities. Officials were instructed to shore up rural infrastructure and water supplies, clean up village sanitation and housing, and improve rural education, health care, social insurance and public services. Poverty alleviation efforts are elevated as China rushes to achieve an "all-round moderately well-off (小康) society," an objective first articulated 40 years ago by Deng Xiaoping, amplified by Xi Jinping, and due to be achieved in 2020 according to communist party dogma. The party sec...

China's reporting on the Phase I trade agreement's agricultural purchases from the United States has been limited to comments at a December 13 press conference made by Vice Minister of Agriculture Han Jun and other officials. The 11-pm press conference featured sub-cabinet officials: the deputy director of the National Development and Reform Commission and vice ministers of commerce, finance, and agriculture. Officials emphasized that negotiations with the United States were based on principles of equality and mutual respect. They revealed that the agreement includes chapters addressing intellectual property rights, technology transfer, food and agricultural products, financial services, exchange rates and transparency, trade expansion, bilateral assessments, and dispute settlement. They told journalists that the text of the agreement will be released after completion of legal reviews and translation checks, and a time, place and other arrangements for signing the agreement w...

Huawei and ChemChina are key players in building an agricultural industry based on technological innovation, according to China's agriculture minister. In November, the Ministry of Agriculture and Rural Affairs website featured visits by Minister Han Changfu to Beijing research centers operated by the two companies to tout China's hope for technology to overcome challenges such as pest pressures, increasingly scarce and unreliable workers, and chaotic supply chains. Han Changfu visits Syngenta research center. Photo: Ministry of Agriculture and Rural Affairs. Minister Han first visited a plant-breeding lab and greenhouse at a Beijing research center operated by Syngenta, the Swiss seed and agrochemical giant acquired by the State-owned China National Chemical Corporation, aka ChemChina in 2016--China's biggest-ever overseas acquisition. According to the article, Syngenta's resources have been integrated into Chinese agriculture since it was acquired by ChemChi...

Chinese officials plan to restore normal pork production by 2021 via a crash farm-building campaign and other measures that include ordering local officials to ensure local pork self-sufficiency, reconfiguring the slaughter industry, and setting up rigid pork supply pipelines. At the same time, officials plan to address chronic problems by shoring up disease prevention and dotting the countryside with tanks to collect millions of tons of manure and diseased carcasses. The Ministry of Agriculture and Rural Affairs circular, " Three-year plan to speed up recovery of hog production " issued on December 4 calls for achieving a small rebound in pork output by the end of 2019, rebuilding production capacity by the end of 2020, and restoring normal pork supplies in 2021. The announcement aimed to impress local officials with the program's importance by citing Xi Jinping's many "important directives and instructions" and "clear requirements" issued by ...

China hosted African agricultural leaders for a forum this week where Chinese officials pledged to expand and deepen cooperation, investment, and trade with African agriculture over the next 3 years. Photo from China Ministry of Agriculture and Rural Affairs. According to China's Ministry of Agriculture and Rural Affairs , 500 representatives from African countries and international organizations attended the meeting hosted by the Ministry and the Hainan Provincial Government in the provincial capital of Sanya, December 9. Attendees heard speeches from China's Minister and Vice Minister of Agriculture and Rural Affairs, the Hainan governor, and African leaders. China's ag minister emphasized the "huge potential" for China-Africa cooperation in agriculture in the "new era" proclaimed by Xi Jinping. The focus of cooperation will be on food security, poverty alleviation, agricultural science and technology, agricultural modernization, and giving develo...

Chinese pork prices have dropped about 20 percent in November. Most industry analysts seem to view the decline in pork prices as a temporary market correction, and they expect a moderate rebound because there is still a 15-to-20 mmt deficit in pork supply. Prices stabilized or started to increase again in nearly all provinces last week.  An industry survey found that 60 percent of industry people expect a renewed increase in pork prices as preparations of traditional pork products to celebrate the new year begin in southern provinces. The average carcass price at the Beijing Xinfadi wholesale market on November 24 was down 23 percent from its October 29 peak of 26 yuan per 500g, erasing about half of the 58-percent increase during October. The price is still 135 percent higher than its year-earlier level of 8.5 yuan per 500g. Chinese news media are thick with propaganda about farmers rebuilding production capacity. Ministry of Agriculture offi...

The Agricultural Development Bank of China (ADBC) has been pumping money into China's agricultural sector by financing most of the grain and cotton marketed this year and lending for poverty alleviation, land improvement, marketing infrastructure, agricultural industry parks, "leading enterprises," and agricultural science and technology. The bank is one more seldom-noticed example of a Chinese economy increasingly propped up by debt. With downward pressure on many commodity prices, ADBC loans are holding up sagging crop markets. In a press conference last month, the bank's president touted ADBC's role in maintaining food security by announcing that ADBC lent 170.4 billion yuan ($24.3 billion) to finance purchases of 124 million metric tons of grain and oil in the first three quarters of 2019--up 87 percent from last year. The ADBC president acknowledged that the bank financed 75 percent of wheat sales this year and 71 percent of early rice purchases. These sha...

"I mports are cheaper; so why is the government spending 17 billion yuan to subsidize soybean-planting ?" was the title of a recent article in No. 1 Business News ( Di Yi Caijing ). The article didn't really answer the question, but a few calculations show that increase in subsidies paid to increase soybean output this year is almost equal to their purchase price. Moreover, the price is dropping as the market for Chinese soybeans appears to be saturated. In the article, China's Ministry of Agriculture and Rural Affairs lauded success of the "soybean revitalization plan" ordered up by this year's "Number 1 Document." The Ministry expects this year's soybean output to increase to 17.2 million metric tons (mmt) from last year's 16 mmt. The plan's objective was to reduce reliance on imported soybeans by 1 percentage point in 2020 and another percentage point by 2022. The Ministry projects a slight increase in imports from 83.1 mmt in...

On-the-ground investigations emphasize that northeastern farms have begun to restore hog production after at least half of the region's swine were lost to last year's African swine fever (ASF) virus and panic-selling. The region is still severely short of pigs, but its slaughterhouses are shipping thousands of carcasses to southern regions where production has not rebounded at all. The facts and figures the report cites suggest there has been only marginal progress in restocking farms, and individual farmers who accounted for the bulk of production pre-ASF are mostly still on the sidelines or raising chickens now. A report from Huatai Futures is based on interviews with farmers, breeding companies, traders and slaughterhouses in northeastern provinces of Liaoning, Jilin, and Heilongjiang--apparently in October 2019. Another online article and an assessment of a drop in hog prices in early November report similar information. This chart claims to show the percentage los...

The price of a lean hog carcass was three times its year-earlier price in Beijing's Xinfadi wholesale market on October 29, 2019. The Xinfadi market's weekly report described the nationwide competition for carcasses that is driving the price upward at an accelerated pace this month. A daily average of 1,450 swine carcasses arrived in the Xinfadi market during the week of Oct. 19-25. The daily supply was up from its low point during the National Day holiday week early in the month, but it was 33 percent less than the 2,350 carcasses supplied daily during the same week in 2018. According to a monthly report for September , the number of carcasses arriving at Xinfadi during July was the largest in 5 years, but tight supplies resulted in a noticeable decline in carcasses arriving during August and September. According to the reports, Beijing's market competes for carcasses transported all over the country. Most of the carcasses in the Beijing market come from the...

China's food security strategy insists on self-sufficiency, yet China also claims to advocate liberalized global food trade, according to a white paper on China's food security released October 14, 2019. The paper recites vague phrases like "keeping Chinese peoples' food bowls tightly in their own hands," a mantra that has been repeated as in speeches and communist party documents since Xi Jinping's ascension to party chief in 2013. The Chinese version of the white paper has an emphasis on self-reliance that is largely scrubbed out of the English translation. The Chinese version advocates a "path to food security with Chinese characteristics" ( 中国特色粮食安全之路 ) that is translated as "food security in China" in the English version. The food security policy is stated in a series of opaque phrases that call for China to remain self-sufficient in grain most of the time by ensuring domestic production capacity while allowing for undefined ...