Dim Sums: Agricultural Markets in China

China's animal feed production was a record 252.76 million metric tons (mmt) in 2020, up 9.5 percent from the previous year, according to data reported by the country's feed industry association .  Statistics indicate China's feed production has been growing much faster than its production of meat and eggs. Feed output rose 24 mmt, while meat and egg output edged up by 1.5 mmt. The ratio of feed output to combined meat and egg output was 2.28, up from less than 2.1 the last two years and 1.5 in 2010.   Sources: China Feed Industry Association; China National Bureau of Statistics. About half of feed was produced for poultry: 91.8 mmt for meat poultry and 33.5 mmt for layers in 2020. Hog feed output totaled 89.2 mmt, while aquaculture feed totaled 21.9 mmt, feed for cattle and sheep totaled 13.2 mmt, another 2.9 mmt of feed was produced for other miscellaneous animals, and less than 963,000 mt of pet food was produced in 2020.  Source: China Feed Industry Association. ...

In January 2020, China's Ministry of Agriculture and Rural Affairs published new regulations on the transfer of rural land operation rights that take effect March 1. The regulations are the latest in a series of decrees and notices attempting to meld socialism and capitalism in the Chinese countryside by creating a market for rights to use land while retaining an opaque form of collective ownership of the land. A close reading of the regulations and the problems they are aimed at suggests that the farm scaling-up process is not going smoothly. This "reform" piles on more layers of audits and approvals to address the worries of Chinese leaders obsessed with "risks" to "food security" and rural stability.   Chinese officials are alarmed by the phenomenon of abandoned weed-covered plots of rural land. A Peoples Daily explanation of the regulations leads off with headings "Enliven [land] use rights" and "More effectively and rationally ...

While propaganda trumpets a  "faster than expected" rebound in China's swine sector, disease and productivity problems raise concerns about the health of the industry. A surge of live swine imports in the fourth quarter of 2020 suggests that the restoration of the breeding system is still in its early stages.  China's agriculture ministry web site posted an interview with a pork industry analyst assuring consumers that plenty of pork would be available for the spring festival holiday. The analyst recited statistics about inventories recovering to over 90 percent of their level in 2017, rising pork output since last October, and falling prices. Provincial and local governments also publicized reports about increases in production. Releases of government pork reserves were also publicized ahead of the holiday. Chinese officials appear to be concerned about a surge in food prices that accounted for most of the increase in the January CPI . Under the radar, other reports...

If feels like the 1970s. A shadowy foreign government buyer is purchasing vast quantities of grain, boosting prices, and inspiring talk of a commodity super-cycle.  The 1970s Russian "grain robbery" kicked off a bout of food price inflation that became a nagging problem throughout that decade. This time the "robber" is China's state-owned grain buyer, COFCO, buying up corn millions of tons at a time. Everyone knows the "robber" is in the house, but it's not clear whether he'll be satisfied with taking the candlesticks or grab the silverware as well. The aggressive Chinese corn purchases caught USDA off guard. USDA's February WASDE report estimates that China will import 24 million metric tons of corn in 2020/21, up from 17.5 mmt estimated last month.  Back in October, USDA estimated that imports would be 7 mmt.  Source: USDA Production, Supply and Distribution data. The purchases also caught China's Ministry of Agriculture off guard. Th...

As China's biggest city and one of its richest, Shanghai has a thriving food industry supplied mainly with products from other provinces and from overseas. Shanghai is on the leading edge of a national trend of adding food miles and degrees of separation between consumers and farms. A thriving, gradually maturing industry is growing rapidly to get tasty food to consumers. But the trend also creates safety risks and opportunities for criminal food fraud.  An annual "white paper" by Shanghai's market supervision authority  posted on the central government's web site is meant to assure Chinese consumers that authorities have food safety under control.  The report says Shanghai is becoming a "food distribution city" as the number of local food producers plummets. In 2020, 80 percent of the food consumed in Shanghai came from outside the municipality. The ratio was up 10 percentage points from five years earlier, according to the report.  Relatively few local...