Dim Sums: Agricultural Markets in China

Poultry farmers in China's Hubei Province claim they are running out of feed due to transport restrictions imposed to prevent the spread of coronavirus. Hubei Province, the epicenter of China's coronavirus epidemic, is under strict quarantine. On January 28, 2020,  the Hubei Province poultry farming association issued an emergency appeal to the national feed industry association requesting 18,000 metric tons of corn and 12,000 metric tons of soybean meal--a 10-day supply--to aid the survival of poultry producers. According to the letter, most of the province's "scale" poultry farms are running out of grain due to public health emergency measures that include road closures and limits on transportation to control the spread of the coronavirus. The letter said farms are facing irreparable economic losses and asked that feed companies with production capacity and transportation channels sell the feed ingredients at recent market prices and deliver the feed to Hubei. ...

China's Grain Reserve Bureau was recognized for its "secrecy work" by the State Secrets bureau, a reminder that China's promises of "openness" and free-flow of information are still constrained by an Orwellian bureaucracy that outsiders never see. The Administration of Food and Commodity Reserves announced on its web site  that it had been designated an "advanced collective in National secrecy work," by the National Administration of State Secrets Protection . The award given in January 2019 is a recognition of the bureau's work in maintaining secrecy that is given out only once every five years. The reserves administration is responsible for overseeing the procurement, storage and distribution of government grain and cotton reserves. In a training class held in 2019, local grain reserve officials are reminded that the communist party dictates what information should be kept secret. Photo from Ningxia Autonomous Region administration of gr...

Chinese officials stockpiled more grain during 2019 to shore up sagging prices as a slow market undermined plans to jettison the stockpiles. With warehouses already bulging, it will be challenging for China to buy more American grain this year to meet its "Phase One" purchase commitment. Chinese state news media boasted that price support policies for wheat and rice raised Chinese farmers' income by 10 billion yuan (about $1.4 billion) in 2019. The news item claimed that programs to purchase wheat and rice at minimum prices have put money in farmers' pockets by preventing farm gate prices from falling below minimum levels set by the government. Rice and wheat stocks are at record levels and corn stocks are still "abundant" (despite a massive 3-year de-stocking program), according to a January 15 Ministry of Agriculture and Rural Affairs press conference . Grain prices are down, despite stockpiling efforts. The Ag Ministry said grain prices in December...

China's Q42019 pork output was down 31 percent from a year ago and China's swine population was the smallest in 25 years, according to data released by the National Bureau of Statistics this week. The Bureau estimated that the doubling of pork prices from a year earlier accounted for about half of the 4.5-percent increase in China's December CPI. The Bureau's January 17 release of preliminary macroeconomic data reported that 2019 pork output fell 21.3 percent from 2018. Poultry production expanded 12.3 percent year-on-year, and egg, beef, and mutton output also grew. However, the 5.1-mmt gain in other animal protein output offset less than half of the -11.5-mmt loss of pork output in 2019. China Livestock Production, 2019 Item 2019 output Change from year earlier Million metric tons Million metric tons Percent Pork 42.55 -11.5 -21.3 Poultry 22.39 3.0 12.3 Eggs 33.09 1.8 ...

Seven years after he launched aggressive anticorruption efforts in one of his first initiatives as supreme leader, Xi Jinping promised renewed crackdowns on corrupt officials in an "important speech" on "strict party governance" this week  to the Central Discipline and Inspection Commission. The crackdown will spare no one--from low-ranking "flies" to high-ranking "tigers." Xi admonished officials to be "soberly aware of the anti-corruption fight's grave, complex, long-term and onerous nature of the anti-corruption fight." Xi advised Communist Party officials that corruption must be investigated and severely punished because it undermines the foundation of the Party's rule. Xi promised to attack corruption in financial organizations and state-owned companies, to strengthen management of state-owned assets and resources, and crack down on fraud in medical organizations and foreign investments. He warned grass roots officials a...

China aims to create a modern grain processing industry by linking up farms with world-beating companies, raising the quality of products, and creating powerful brands. Subsidies and guidance from officials are expected to create strong Chinese companies with premium high-end products to compete with multinational companies under the guise of preserving China's "food security." According to Economy Daily , China's objective is to establish a modernized grain industry system with "green" high-end products, world-class internationally-competitive companies and stronger food security by 2025. The program is designed to overhaul China's grain sector which is geared toward producing mass quantities of generic grain, reduce losses from mold and deterioration in bins and warehouses, reduce contamination from pollutants and pesticides--and catch up with the more discerning tastes of Chinese consumers for higher quality and safer products. The program includes ...

China plans to phase out growth-promoting antibiotics in livestock and poultry feed during 2020. China's livestock farmers will no longer be allowed to substitute chemicals for careful management and animal nutrition, and the move is likely to push more small farmers out of the industry--if it can be enforced. In July 2019, China's Ministry of Agriculture and Rural Affairs issued announcement no. 194 that calls for stopping production, import, commerce, and inclusion of sub-therapeutic growth-promoting antibiotics in animal feed during 2020. Production and import of the drugs is to be suspended as of January 1, 2020, and production of feed additive products containing growth-promoting antibiotics must cease by July 1, 2020. Feed products that have already been produced can be marketed until the deadline of December 31, 2020. The Ministry will also revise standards and work out a regulatory system with the goal of removing growth-promoting antibiotics from use in feed while a...