Dim Sums: Agricultural Markets in China

China has flipped from net importer of soybean oil to net exporter for the first time ever, a phenomenon discovered by an analysis posted on a Chinese edible oils industry site  earlier this month. Booming exports and plummeting imports of soy oil indicate the pace of soybean imports from Brazil is overwhelming demand in China and driving down prices of soy oil and meal. At the same time, accumulation of inventories and weak demand in China's food industry will help China sustain its strategy of zeroing out imports of U.S. soybeans to gain the upper hand in trade negotiations. Chinese customs data through July 2025 confirm a prominent uptick in soybean oil exports mirrored by plummeting imports. The chart below shows soybean oil import and export volumes for the first 10 months of the 2024/25 market year compared to year-earlier volumes. (The market year runs from October through September.) With just 2 months left in the 2024/25 market year, China's exports of soybean oil sta...

As trade tensions with the U.S. flare up, Chinese companies are setting up giant farms in Africa, Asia and Russia according to Chinese news media. The news echoes an earlier wave of so-called "land grabs" that were over-hyped and mostly ineffectual. Earlier this month, a  Beijing Times Caijing article, " Why are Chinese companies flocking overseas to farm? " explained that the phenomenon reflects China's strategic considerations for ensuring food security and its far-reaching intention to reconstruct international trade. The article connects the farming investments to trade frictions between the U.S. and China, the use of agricultural products as a bargaining chip in "geopolitical games," and the "huge risk" of relying on the U.S. and Brazil for 90% of its soybean imports. An edible oils news site proclaimed that "a new wave of 'going global' in the agricultural and food sector has begun," with more and more companies inve...

A U.S-China soybean drama is brewing as the peak season for shipping U.S. soybeans to China is just over the horizon with no sales of U.S. beans to China on the books. Soybeans--one of the top U.S. exports to China--have mostly been in the background of trade negotiations, but they got some publicity this month. President Trump called on China to "quadruple its soybean orders," and the American Soybean Association asked the President to prioritize soybeans in the negotiations to rescue farmers from a "trade and financial precipice." U.S. soybean shipments to China occur predominantly during the months of October-December, immediately after the harvest. During the 2024/25 marketing year now finishing up, the United States exported about 16 million metric tons of soybeans to China during October-December, more than 70 percent of the year's exports to China and about 30 percent of the estimate of total soybean exports for the 2024/25 marketing year in USDA's l...

On August 12, China's Commerce Ministry determined that Canada was guilty of "dumping" canola seed and assessed punitive tariffs of 75.8 percent on Canadian canola seed. This is the latest example of Chinese authorities using canola as a geopolitical punching bag. They move their foot from accelerator to brake, allowing imports to curb rising prices before choking them off to punish Canada for lining up with the United States on bigger issues. The surge of imports and declining prices China's commerce ministry alleges to have "harmed" Chinese producers in 2023 was created by Chinese leaders themselves after they lifted a 3-year-old restriction on canola imports in order to curb spiraling prices. Commerce Ministry officials claim that Canada's subsidies and preferential policies distorted supply and demand, created severe excess capacity, and harmed Chinese rapeseed producers and processors. The findings are the mirror image of justifications for curbing...

China's rural families are sitting on a debt bomb, according to an article on potential risks of the rural family indebtedness problem published by Wuhan University Rural Governance Research Institute task force in 2023. The authors described how spillover of China's frothy real estate frenzy into the countryside drained the savings of two generations of rural families and saddled the younger generation with debts they will owe for 20 to 30 years. The Wuhan University authors say families that appear wealthy are living in dread of a job loss or sickness that could tip them over the edge into bankruptcy. A 2022 article in  Daily Economic News  explained that a boom in demand for real estate in county-level towns was driven by reverse migration from big cities to rural hometowns, demand for better quality housing, and villagers commuting from small city apartments to factories or farms in their village.  An article about a county town in Anhui Province  traced a count...

China reported an outbreak of African swine fever in Guangxi Province, the first officially reported in 3 years. The outbreak sickened 215 pigs and killed 209 in 4 villages of Guangxi's Nopo County, a remote mountainous area bordering Vietnam. The 4 villages affected have a population of just 795 pigs. According to the report, authorities have taken the usual measures to control the disease by instituting quarantines, disinfecting premises, and taking other preventive measures. Authorities say the disease risk is under control.  According to the announcement, distribution of live pigs is being tightly controlled in parts of the province. Controls were especially tight during June and July near Guangxi's port cities of Fangcheng and Qinzhou when pigs are likely to be imported from Vietnam. Reuters reported last week that Vietnam has had 100,000 pigs infected with ASF in 972 outbreaks this year, up from 30,000 infections during the same period last year.  This month's outbr...

China is pursuing an unworkable project of layering a space-age agricultural sector on top of a medieval collective land ownership system. Today, a dwindling cadre of aging villagers "own" the land, leasing it out on a short-term basis to a separate class of business entities that do the farming. Conflicting interests and uncertainty about the future breed a short-sighted approach to land management that undermines the long-term investments needed to put China's agriculture on an upward trajectory.  This year's communist party "Document No. 1" on rural policy included a directive to upgrade the quality of arable land, apparently the inspiration for a law on protecting and improving arable land drafted and approved last month by China's State Council. The day after it was approved, an essay in State-run Economic Daily  decried the unresolved degradation of farmland, including thinning and hardening of top soil, formation of gullies in the rich black soi...