Dim Sums: Agricultural Markets in China

Chinese pig farming tycoons moaned about problems with African swine fever, cash flow, regulatory thickets, and access to imported corn in their comments on the sidelines of last week's National Peoples Congress.  Liu Hanyuan, chairman of Tongwei Group, fretted about a recent resurgence of African swine fever . Liu said that 7 percent of trucks had tested positive for the virus at the end of 2021--a ten-fold increase from the beginning of the year. He added that 4 percent of markets near pig-farming areas tested positive, a six-fold increase. While it is often presumed that biosecurity on big pig farms protects them from the virus, Liu revealed that incidence of African swine fever is as high as 25 percent in the biggest pig farming companies.  According to Liu, the cost of veterinary drugs has increased 50 yuan per head this year to combat the ASF threat. Liu warned that half of the pigs entering slaughterhouses in some regions are underweight pigs (under 85 kg) that are most...

A Chinese feed industry executive pleaded for more access to imported corn at this week's National Peoples Congress. Chinese industry's swelling need for feed grain is putting pressure on the 20-year-old tariff rate quota system that Chinese authorities view as a necessary "firewall" to protect their farmers from import competition.  Liu Hanyuan, chairman of the board for feed manufacturer Tongwei Group, told reporters at the National Peoples Congress that he is making recommendations to ensure feed supplies to ensure the healthy, sustained development of China's livestock industry. Mr. Liu recommended improving the tariff rate quota (TRQ) mechanism for importing feed grains by giving feed and livestock companies import quotas in proportion to their annual production. The quota for corn--established when China joined the World Trade Organization in 2001--allows up to 7.2 million metric tons to be imported at a low tariff of 1 percent each year. The tariff for imp...

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 ...

China is still stuck with a huge stockpile of domestic cotton bought at support prices. The government has grudgingly issued more import quotas but most quotas are given to companies who agree to export their final products or buy expensive cotton from state reserves. According to Chinese textile industry reports , China's National Development and Reform Commission (NDRC) will soon announce an additional cotton import quota of 400,000 metric tons.  This will bring the total quota issued for the market year to 2.8 million metric tons. According to one factory manager, new quota has already been issued to some textile mills. The quota is reportedly for purchases of cotton already in bonded warehouses at Chinese ports. Traders estimate 700,000-to-800,000 metric tons of cotton in these warehouses, but the supply of cotton in the market is tight. On April 10, the NDRC announced its temporary reserve policy for the 2013/14 market year (about a month later than in the last two years)....