Sunday, February 9, 2020

China Struggles to Keep Food System Running

China is struggling to keep its food system running while controlling movements of people and vehicles to check the spread of the novel coronavirus.

Egg producers in Hubei province have been the focus of news media attention. On February 1, Hubei's animal husbandry association told Caixin news that disruptions of feed supplies and transport of eggs had been eased after the province issued a circular that called for allowing trucks carrying agricultural products and daily necessities to travel highways freely when showing their "green channel" permit.

An emergency notice calling for maintaining normal production and supplies of livestock products was issued February 3 by the Ministry of Agriculture and Rural Affairs. In order to maintain operations of livestock farms and supply food to consumers, the circular ordered officials to allow passage of trucks carrying:
  1. chicks, piglets, and breeding animals
  2. animal feeds and raw materials
  3. livestock products such as meat, milk, and eggs
The notice also ordered officials not to close slaughterhouses and to support reopening of processing plants as soon as possible. Officials were ordered not to close down roads and to "troubleshoot" village transportation lockdowns and other road closures.

The Grain and Commodity Reserves Administration announced a dozen examples of companies supplying food and plentiful grain reserves to bolster public confidence in the food supply.

The general manager of an egg company in Hubei told a China Times reporter that his trucks still had difficulty delivering eggs to customers in Shanghai, Hangzhou, and Guangzhou last week. According to the egg boss, trucks with Hubei license plates are immediately viewed with suspicion by officials in other provinces, and some roads are closed. Officials in Hangzhou wouldn't let a delivery truck pass until the driver showed them the Ministry of Agriculture circular. After unloading, some trucks had trouble getting back to Hubei because they couldn't prove the empty trucks carried farm products. They tried unloading only half the truck's eggs so they could prove they were hauling "green channel" produce on their way back. Six of the egg-truck drivers have been quarantined for 14 days while delivering eggs, and drivers are now demanding double their usual payment to compensate for the risk of being quarantined. Consumers refuse to buy eggs that come from Hubei, and some trucks have been sent back. Officials at a market in Guangzhou ordered traders not to receive trucks or shipments from Hubei. Some farmers in Hubei, desperate to sell their eggs to generate cash to buy feed and chicks, have offered to sell their eggs at a discount but the egg company has purchased exclusively from farms that are long-term suppliers.

Corn prices in China are rising as transportation is disrupted. Some warehouses in northeastern provinces buying corn from farmers reportedly had all of it purchased immediately by livestock farmers. Auctions of corn reserves are being held to prevent companies from running out of raw materials. During February 7-11, authorities plan to auction 2.96 million metric tons of corn held in reserves since 2016 in 15 provinces. The Feb. 7 auctions sold 1.07 mmt to 308 feed companies.

As the spring planting season approaches, farmers may have difficulty buying inputs and large-scale farms are unable to get laborers to help prepare fields.

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