Dim Sums: Agricultural Markets in China

Corn market bulls in the U.S. were disappointed that China made no commitment to buy American corn at the September summit meeting in Washington. Corn was the chief contributor to China's Phase One purchases in 2020-22, and many thought China would buy corn to fulfill its $17-billion purchase commitment this year. However, no agricultural commitment emerged from the meeting , just a pair of $30-billion spreadsheets and a promise to keep talking. China's corn market is actually in a fragile state. Demand is weak, feed mills are buying cautiously, and Chinese corn prices are sinking as the new crop comes on the market. Modest volumes of imported sorghum and barley are already adding downward pressure on corn prices. The threat of plunging prices for the country's largest grain crop could deter China's negotiators from agreeing to purchases of American corn. A September 29 article in the obscure State-run  Grain & Oil News  discussed weakness in the corn market as the ...

This week a Chinese State TV program exposed live-streamers who promoted bottles of "walnut oil" that were actually filled with soybean oil. China's latest food safety scandal highlights how pervasive fraud undermines the strategy of using high-quality to differentiate food products and earn premium prices. The case also incidentally highlights how the low price of soybeans perpetuates their oversize role in China's food industry.  Chinese State TV broadcast investigates adulteration of walnut oil. The "Yikoufu" brand of walnut oil was advertised by live-streamers on China's WeChat platform, purportedly sold by "People's Supply and Marketing Cooperative – Guangping Supply and Marketing Cooperative Selection." Walnut oil is said to be a favorite of Chinese consumers due to its health benefits as rich in unsaturated fatty acids. Live streamers promoting the Yikoufu walnut oil hyped the product in a "public-service agricultural support e...

Prospects for U.S. agricultural exports to China are still murky after Chinese negotiators dropped a 1619-item list of items that will be "considered" for tariff reductions after last week's Trump-Xi summit. The list was released by the White House as part of a plan for establishing a U.S.-China Board of Trade composed of Chinese and U.S. officials that aims to "optimize" trade between the two countries. Each country released a "30-for-30" list of products that the U.S. and China will consider for reductions of country-specific tariffs. Each list apparently is composed of commodities that had $30 billion in trade in 2024, the year before the current trade war began.  A Chinese official explained that the "30 billion-for-30 billion" framework was agreed by Chinese Ministry of Commerce and U.S. Trade Representative officials at their May meeting. He said tariffs will be lowered to the Most-Favored-Nation (MFN) rate about 90% of the items, and...