Dim Sums: Agricultural Markets in China

Another surge this month leaves China's hog price at about the same as the record-highs posted a year ago--despite the Ministry of Agriculture's claim that the country's swine inventory has rebounded faster than expected and is now at 90 percent of normal .  The average hog price reported by China's National Bureau of Statistics for mid-December 2020 was 33.9 yuan per kg., just slightly below the average of 34.2 yuan/kg the Bureau reported for the same time period in 2019. Soozhu.com reports a further increase in the hog price to 35.40 yuan/kg on December 30, 2020. Prices were about 10-to-15 yuan/kg. before the surge in prices in mid-2019. Data from National Bureau of Statistics average purchase prices for industrial materials. The Ministry of Agriculture and Rural Affairs reports a similar pattern in pork prices. The average wholesale price of a swine carcass averaged 49.82 yuan/kg in mid-December 2020, slightly lower than the 50.99 yuan/kg reported a year earlier. The...

China has imported 9 million metric tons (mmt) of corn in the first 11 months of 2020, China's largest-ever corn import total. The corn import total exceeded the country's 7.2-mmt tariff rate quota (TRQ) for the first time as of October after falling short of the quota every year since it was established in 2001. An additional 1.23 mmt imported during November pushed the 2020 total even further beyond the quota.  Source: China customs statistics. China's January-November 2020 imports of corn from the United States totaled 3.285 mmt, a more than 10-fold increase from the 2019 total and the largest total since 2013. While efforts to meet purchase commitments from the U.S. in the Phase One agreement are one factor behind the surge, Ukraine remains the top supplier of China's imported corn in 2020 with over 5.2 mmt. Imports from Ukraine also increased this year. Other countries--including Bulgaria, Russia, Laos, and Myanmar--supplied 531,000 mt of corn through November, up ...

addendum: Tang Renjian was appointed Minister of Agriculture December 26, 2020. China's Minister of Agriculture mostly disappeared from the Ministry's web site at the end of November. While Han Changfu remains Minister of Agriculture for the time being, his more important position of communist party secretary has been handed over to Tang Renjian in a minor shake-up of personnel in Beijing.  A one-sentence posting on the Ministry's web site said as of December 1 the communist party central committee had decided that Comrade Tang Renjian serves as member and office director of the Central Rural Work Committee and Party secretary of the Ministry of Agriculture and Rural Affairs, and that Comrade Han Changfu no longer serves in those positions.  In: Tang Renjian Out: Han Chanfu During the last 3 weeks Han Changfu no longer appeared in any news stories on the ag ministry web site, nor did he appear for meetings with visiting dignitaries. The site still lis...

Chinese officials eager to shift blame for covid-19 have reported finding traces of the virus on a handful of imported frozen meat and seafood boxes out of thousands tested after a massive testing campaign was ordered. A box of chicken legs appears to be the only domestic product that has been tested--and it came from a multinational company operating in China. Inactive virus was found on the outside of boxes; none of the food inside the boxes tested positive. Chinese official disinfects U.S. pork boxes that tested positive for covid-19. The meat itself did not test positive. On November 25, Chinese food safety officials announced that covid-19 virus had been detected on the packaging of dozens of shipments of imported frozen food in a number of localities. The deputy director of the national food safety risk assessment center attributed the surge in positive test results to the increase in number of tests performed, and warned consumers not to panic because positive results were ...

A "Real P3" podcast featuring American veterinarian Wayne Johnson provides a rare glimpse of what’s happening on the ground as China’s swine industry recovers from its African swine fever (ASF) epidemic. Dr. Johnson offers a unique perspective, having worked in China for 16 of the last 24 years in training, consulting, and running a diagnostic lab.  Last year, the ASF outbreak closed many pig farms and this year's “novel coronavirus” or “covid-19” prevents farm visits, but the doctor keeps his finger on the pulse of the industry through constant lab testing of samples submitted by customers, consulting and training. Dr. Johnson observes that many Chinese pig farmers have shortcomings in their understanding of good nutrition, proper ventilation, and the exercise of “discipline.” They learn by doing, and farmers now understand biosecurity a lot better than they did. "ASF will teach you biosecurity in a hurry,” Dr. Johnson explains. China hasn’t dealt with ASF “straigh...

Chinese officials attribute record-high corn prices to speculation and hoarding. For months they have been warning about impending collapse in prices and doom for speculators, but prices just don't come down. The average corn price reported by the National Bureau of Statistics peaked in August, but resumed its climb in September-October despite the arrival of newly-harvested corn. The price appeared to level off in November, but the latest data point for late November bumped upward again. The late November corn price is up 34 percent from a year earlier.  Source: China National Bureau of Statistics raw materials purchase price. Preliminary estimates of grain output released by the Bureau today showed a tiny 100,000-ton decrease in corn output to 260.67 million metric tons in 2020. Some industry observers expected a larger decline due to multiple typhoons that hit northeastern China in the summer and fall, but agricultural officials insist that losses were minimal as experts help...

Plans to build pig farms on cropland to alleviate China's meat shortage highlight mounting conflicts in a resource-poor food system. Earlier this year pig-farming giant Muyuan Group announced aggressive plans to build 84 industrialized pig farms in 13 counties surrounding its headquarters in Nanyang, a city in the hinterland of Henan Province. The plan stirred up controversy because 55 of the pig farms would be built on 1,000 hectares (2,500 acres) of "permanent cropland" designated by the government for producing grain crops.  In 2019, Muyuan produced over 10 million swine--making it China's largest pig producer. Its sales of hogs, feeder pigs, and breeding stock reached nearly 12 million head in the first nine months of 2020. Only 6 of Muyuan's 90 branch companies are located in Nanyang, according to the company's semi-annual report. This month, Muyuan announced projects in counties of Anhui, Hubei, and Liaoning Provinces. In late August, state media's ...

Muchuan County in Sichuan Province illustrates China's efforts to simultaneously boost the meat supply and fight poverty on the fringes of the Middle Kingdom. A featured prong of China's "precise poverty alleviation" initiative is to recruit companies that boost local specialty industries in the impoverished hinterland. Incorporating poor farmers into modern supply chains that tie "small farmers" into "big markets" is the initiative's core. A stream of propaganda articles over the years described initiatives to promote swine-farming in a mountainous Leshan region of Sichuan Province as a "precise poverty alleviation" strategy. An article this month recounts construction of giant swine farms in the county by a half-dozen prominent companies and restocking of farms with local government subsidies to achieve the numerical targets for restoring hog production in the counties of Leshan.  A September article promoted another poverty allevi...

Chinese officials are on alert for transmission of covid-19 via imported meat and seafood. With imports filling a meat shortage of epic proportions this year, testing, disinfection and other precautious could keep meat prices at record highs for a little longer. Chinese officials stepped up surveillance of imported meat when a worker at the port of Tianjin tested positive for covid-19 on November 8, four days after unloading a shipment of imported frozen meat. The worker was hospitalized and 156 of his coworkers and neighbors were tested (results not released yet). Officials in China have been on guard against transmission of new covid-19 outbreaks through frozen food most of this year, following covid-19 outbreaks at meat processing plants in exporting countries such as Germany, the United States and Brazil.  On November 6, local officials in Dezhou, a city in northern Shandong Province, tested a shipment of German pork knuckles and found four samples with weak positive covid tes...

China's national grain reserve company signed a soybean purchase agreement last week that exemplifies Xi Jinping's approach to creating an "open" economy: create compliant Chinese behemoths big enough to negotiate deals that neutralize the "unfair" advantage of multinationals.  On November 6, 2020, China's national grain reserve corporation, Sinograin, signed a soybean purchase framework agreement committing to purchase soybeans from Brazil and Argentina. Suppliers signing the agreement included the so-called "ABCD" grain traders--ADM, Bunge, Cargill, Louis Dreyfus--plus China's COFCO International, ECTP (Engelhart Commodities Trading Partners), state-owned chemical giant Sinochem, and Sinochem-owned Swiss seed/chemical manufacturer Syngenta.  The announcement of the soybean purchase agreement was a piece of political theater to promote Xi's "opening" initiative. The announcement revealed no details of the agreement. The arti...