Dim Sums: Agricultural Markets in China

You probably never thought about how China uses horse piss to keep its Central Asian colonies under control and to compete with giant multinational pharmaceutical companies. A Kazak man collects horse urine. Source: Tianshan Net (Xinjiang Daily) Suppose you're an insecure East Asian country whose population mostly lives within 500 miles of the Pacific Ocean. To your west there's a big, mostly empty territory populated by nomadic ethnic groups. You're worried that powerful neighbors will gain control over this territory and end up right outside your back door. Plus the territory has land where you can grow crops, launch rockets, and extract minerals and petroleum.  So you move into this area, subjugate it, and claim it as part of your country. You unimaginatively name it "New Territory" while claiming it has always been part of your country. You set up an archipelago of military farming and industrial settlements populated by your ethnic group. You don't want e...

Chinese data show a decline in chemical fertilizer that purportedly demonstrates their farmers are reversing their notoriously excessive fertilizer use. But what if the decline in fertilizer use actually reflects a decline in China's agricultural production? China reported another record grain harvest last week for 2023, Many observers in China were skeptical about the data since the farmland base has been shrinking, there were floods and drought this year, and grain imports are up 7 percent so far in 2023. State media issued a rebuttal to these suspicions , insisting the data are correct. Chinese statistics show a 17-percent decrease in use of chemical fertilizer use from 2015 to 2022, yet grain output has increased in all but one year during that time--more grain with less fertilizer. Hmm... 2015 was the year Chinese officials launched an action plan to cut annual growth in fertilizer use to zero by 2021. The statistics immediately began showing a decrease in fertilizer use! ...

Falling agricultural prices suggest something happened to let the air out of China's economy in October.  Weekly farm commodity procurement prices reported by the State Commodity Reserves Administration showed steep declines in corn and soybean prices during October; they seemed to stabilize in November. Rice prices increased and wheat prices were relatively steady. Calculated from weekly procurement prices reported by State Administration of Grain and Commodity Reserves  Most agricultural raw material prices paid by enterprises peaked in September and fell at varying paces during October and November.  Calculated from prices reported three times per month by China National Bureau of Statistics. The two data sources agree that corn and soybean prices went down over the last three months and rice prices went up. Soybean meal had the steepest decline (-17.5%), followed by peanuts (-15.7%) and hogs (-13.2%). Calculated from price indices shown above. Monthly CPI reports indi...

China's plan to modernize Africa's agriculture received much praise and fanfare at a China-Africa agricultural cooperation forum held in China's Hainan Island this week.  The "Plan for China Supporting Africa’s Agricultural Modernization" (along with plans for the continent's industrialization and personnel training) was unveiled by Xi Jinping at the August BRICS forum in South Africa . The plan includes technology transfer by Chinese experts, building a China-Africa tropical agriculture R&D center, establishing a China-Africa R&D innovation alliance, training African technicians and managers, and promoting China-Africa trade in agricultural goods.  China implies that its plan is superior to western approaches to aiding Africa. The plan's preamble announces that "China is ready to further explore new pathways of agricultural cooperation with Africa." China bills its plan as "south-south cooperation": one "developing countr...

Vietnam has a vaccine for African swine fever (ASF). China does not.  ASF is a virus that spreads quickly and causes hemorrhaging and death in most infected pigs. ASF first jumped from Europe to China in 2018. Then the virus jumped over the Chinese border to Vietnam within months after it had reached China. Swine herds were decimated in both countries.  Scientists in Europe and elsewhere had been working on ASF vaccines for many years. Yet by early 2020--about 18 months after the country's first outbreaks--China's Harbin Veterinary Institute  said it had developed a vaccine for ASF  that was safe and effective. The vaccine was a live attenuated vaccine created by deleting genes from the virus. The Institute bragged on its web site:  “The vaccine is currently the most promising vaccine for industrial application and will provide important technical means for the effective prevention and control of African Swine Fever in China and related countries.”  Four mo...

China's heightened concerns about invasive species are adding more red tape and record-keeping requirements to the import process. A new set of requirements for soybean shipments probably contributed to reported delays in customs clearance over the past 6 months.  On July 22, 2023 China customs announced  that each port of entry will conduct a 3-year campaign to crack down on invasive species in imported cargoes and smuggling. According to the announcement growth in international trade has resulted in a growing number of invasive species entering the country, presenting a growing risk. In the first half of 2023 authorities said they intercepted 599 species of nonnative animals and plants, including giant centipedes, savage harvest ants, and spotted salamanders, and "exotic pets" brought in by criminal gangs. Problems include illegal mailing of seeds, plants hidden in shipments of toys, and smuggled tiger bones.  More than 20 years ago, scientists from China's Academy ...

A video circulating in China last week may be the latest example of emboldened rural officials clearing aging villagers off collectively owned farmland. These enclosures with Chinese characteristics can be motivated by the need to increase productivity, lucrative opportunities to grow ornamental shrubs, or just plain corruption. The only power villagers have to assert their interests is their sheer numbers...and that's exactly what communist leaders are most afraid of. The video  appeared to show dozens of villagers stealing corn from a large field in Henan Province. A corn combine unable to complete its harvest sat idle as elderly villagers scooped up ears of corn into bags and loaded them into motorized carts parked in the field. Sirens sounded as police showed up but there were too many people to arrest. The operator of an idled corn combine unable to complete his harvesting work took a video of villagers fighting over a bag of corn in the field. While the videos circulati...

Chinese State media celebrated growing purchases of Brazilian corn as a strategy for breaking the "dominant position" of U.S. corn in China's market. In an October 10 article, " China adjusts corn imports to shift toward Brazil, U.S. loses 'dominant position' ," China's strongly nationalist  Global Times  said, "China is now carrying out corn import diversification to change the excessive reliance on the U.S. as a single supplier." Citing Refinitiv data,  Global Times was thrilled to report that August 2023 imports of U.S. corn were down 83% from a year earlier while corn imports from Brazil went from zero last August to 580,000 metric tons in August 2023. Moreover, Global Times reported that imports of Brazilian corn would rise to 1.22 million metric tons in September while imports of U.S. corn would drop to 70,000 metric tons. China approved Brazilian corn for import late in 2022. Brazilian customs data show that 1 million tons a month ...

A feed mill in China's Guangdong Province has been fined by authorities for using unapproved genetically modified corn as raw material. Could this be a signal that Chinese officials are ready to crack down on corn imports? The announcement was featured in news media as one of 10 "representative cases" of the Ministry of Agriculture and Rural Affairs' campaign to "stabilize grain production, protect supply." Authorities say traces of imported GMO corn were found in the company's processing equipment in a sample inspection for GMOs. The feed company had not obtained a license to process agricultural GMOs. The batch of illegally processed corn totaled 31.02 metric tons. The corn had already been processed, but final products had not been sold, according to the description of the case. The company was fined 101,000 yuan (less than $14,000) and products were destroyed. Chinese agricultural authorities announce "representative cases" in GMO crackdow...

"' Borax pork' appears in the market again, serious investigation! " was the headline of a Guangzhou Daily article posted on many Chinese web sites earlier this month--including official Xinhua News. The article warned consumers that inspectors found that market vendors used borax to keep their pork moist and fresh-looking in a food market in south China. This appears to be a straightforward warning to consumers. But picking apart this "news" shows how authorities carefully control reporting of problems to manage public opinion and deflect blame for problems. According to the "borax pork" warning, borax was discovered during a "surprise inspection" of two food market vendors selling meatballs and pork in Panyu--a manufacturing hub and satellite city of Guangzhou in south China. Inspectors seized a box of borax used by a vendor to clean pig intestines, and chemical testing detected borax in some samples of meat. The inspection was carried...

The billions of RMB paid out to mitigate flooding and drought in China--including directives to replant crops in September within a month or two of harvest--suggest substantial damage to grain crops. Yet, Chinese authorities are sure to announce another huge harvest this year.  Funding of 732 million RMB was announced September 1, 2023 by the Ministry of Finance and Ministry of Agriculture and Rural Affairs for drought mitigation in Gansu and Shaanxi Province; recovery from typhoon damage to crops in Jilin and Heilongjiang Province; and control of rice pests and diseases in Jiangxi and Hunan Provinces.  On August 25, the Gansu Provincial finance and agricultural departments issued 50 million RMB for emergency drought relief that paid for seeds, fertilizer, agricultural plastics and equipment to replant crops, and water engineering in the province. On August 30, the Ministry of Agriculture and Rural Affairs held its videoconference to discuss use of agricultural machinery fo...

China's countryside is gradually turning into a warehouse for the country's aging population and the working-age population shrinks.  The "population pyramid" for China's countryside in 2020 has a hollowed-out base with relatively few people at peak working ages of 15-49. The largest cohort of rural people in 2020 were aged 50-54, with 24 million women and 25 million men in this age group. By contrast there were only 11 million males and 8 million females aged 15-19 in rural China during 2020.  Calculated from China's 2020 population census. Back in 2000, the rural population pyramid had a thicker base of working age people. Folks age 50-54 in 2020 (a baby boom born in the late '60s to make up for the starvation after Mao's "great leap forward") were aged 30-34--at peak working age. There were so many rural people at working age then that underemployment in the countryside was a major concern in the early 2000s. That cohort was also at peak c...

" There's no need to worry about the increase in imported agricultural products ," Chinese State media said earlier this month. The  Economic Daily  article assured readers that "the expansion of agricultural imports is not a bad thing in itself." It needs to be analyzed, authors said.  This endorsement of food imports by the Communist Party-run Economic Daily appears to be an Orwellian reversal of food security propaganda. It was posted on dozens of Chinese web sites, a sure sign that it is official Chinese communist party propaganda, not the product of a rogue commentator.  Economic Daily  authors said that "some people" have baseless worries that "China will be controlled by others if it imports food" and that "foreign low-priced agricultural products will impact the domestic industry." To prove their point, Economic Daily authors pointed out that "these situations have never occurred in over 20 years since entering the WT...

There's much chatter about China falling into deflation after its July 2023 CPI report showed a -0.3 percent year-on-year decline. The food and beverage component of CPI showed a -0.5 percent year-on-year decrease that reflected mainly a crash in meat prices--especially a 26 percent decrease in pork prices from a year ago. Meanwhile, China's Q2 2023 index of farm prices (most recent available) showed a tiny -0.4 percent decrease from last year. Looking at prices of individual commodities from China's grain bureau, ag ministry, and rural market prices shows a falling trend or plateau for many commodities that began early in 2023 as the post-COVID-lockdown recovery narrative began to vaporize. Signs of deflation are surprisingly evident in Chinese ag prices, despite farmers abandoning land, floods, and downward pressure from surging imports.  Chinese soybeans are a clear example. Xi Jinping ordered an increase in soybean production last year to reduce reliance on imported b...