Dim Sums: Agricultural Markets in China

China's investment in foreign agricultural projects is booming, according to statistics peddled by Chinese agricultural officials during last weekend's "Belt and Road" summit held in Beijing. China Central TV reported that China has 850 foreign agricultural-related projects in commodities such as rice, corn, soybeans, natural rubber, palm oil, cotton and livestock that reflect "deepening cooperation" with "Belt and Road" countries. According to Ma Hongtao, director of the Ministry of Agriculture and Rural Affairs Foreign Cooperation Office, China has 657 agricultural projects in Belt and Road countries valued at $9.4 billion, up 70 percent from five years earlier. 89 percent of investments are carried out by private entities, the official said. Ms. Ma explained that investments had evolved from an early focus on crop production to a broader collection of processing, transportation, storage, and ambitions to pull along industry development  and...

China's decline in soybean imports during Q1 2019 soybean market is due to weak fundamentals, including impact of African swine fever, the overhang of large U.S. inventories and expanded plantings in South America, according to an article in the country's Grain and Oils News this week . Customs data reported China's March soybean imports totaled 4.9 million metric tons (mmt). The Q1 2019 soybean import total of 16.75 mmt was down 14 percent from a year earlier. Meanwhile, imports of fats and oils for the quarter totaled 1.96 mmt, up 48 percent from a year earlier. Noting a slow-down in purchase of oilseeds, fats and oils, a COFCO manager said, "Our country's growth in oilseed purchases has reached a turning point." The COFCO manager said slow soybean purchases are due to the lowest crushing margins in years, low soybean meal basis, exchange rate factors, and slow downstream business activity. A manager with feed company Haid Ltd. said multiple difficult...

China's animal feed output grew 2.8 percent during 2018, according to figures released by the country's Feed Industry Association . Swine feed sales are down due to effects of African swine fever, but impacts vary by region. More recent reports say poultry feed sales are expanding, but they are constrained by lack of breeding stock and environmental restrictions. The reduction of soybean meal use parroted by officials in Beijing is never mentioned in reports on feed mill site visits--its low price still encourages use. China's feed industry association said 2018 swine feed output was down due to the impact of African swine fever (ASF), while production of poultry, aquaculture and ruminant feed production was up. Production of complete compound feed was up 4.6 percent, but concentrates was down 13.4 percent (typically soybean meal and other protein meals, and micronutrients to be mixed on-farm with grains for pigs). Premix output was also down 5.1 percent. C...

Steep declines in China's pig population due to panic-slaughter over fears of African swine fever have been reported by Chinese government officials, industry investigations, and journalists in the first months of 2019. Reported reductions in swine inventories of 20 percent or more in many regions portend tight supplies and rising prices in coming months. A Ministry of Agriculture and Rural Affairs (MARA) investigation of the swine situation in seven Chinese provinces during February found "irrational" culling of sows on breeding farms was reducing the core production capacity of the sector. In Henan Province, for example, the inventory of productive sows was down 26 percent year-on-year at the end of January 2019. The team from the Ministry's animal husbandry bureau found big cutbacks in herds by backyard farmers, big commercial companies, and key provincial nucleus breeding herds. Head of a pig-farming "cooperative" in Jilin Province complains  th...

Customs data show that China's imports of U.S. soybeans during February 2019 bounced back to 907,754 metric tons. That's up from 135,772 metric tons in January and the largest volume since trade tensions began last April, but still far behind the 3,344,521 metric tons imported in February 2018. Brazil was again the leading source of China's soybean imports in February 2019. China imported 1,986,344 metric tons from Brazil, less than half the 4.9 mmt imported from Brazil in January and the smallest volume from that country since February last year. February is normally the seasonal low for China's imports of Brazilian soybeans. The remainder of China's 4.456 mmt of imports during February was filled out by Argentina (841,394 mt), Canada (644,005 mt), Russia (45,499 mt), Uruguay (30,019 mt), and Kazakhstan (990 mt). China's cumulative soybean imports for the market year since October are down 8.1 million metric tons from a year earlier. October 2018-Februar...

The first round of China's pork reserve purchases have been scaled back from 100,000 metric tons to 10,000 metric tons, according to a China Feed Industry Information Network report . Stronger hog prices last week may have reduced the urgency of removing pork from the market. According to the report, the average hog price in China increased 3.85 percent last week. The average was 12.42 yuan/kg, up from 11.96 yuan/kg the previous week. However, the average price of pork fell 0.3 percent and the ex-factory price of a swine carcass fell 1.05 percent. The report confirmed that pork reserve purchases were due to begin March 8, but "100,000 changed to 10,0000." The 10,000 metric tons of pork translates to 143,000 hogs, the article said (assumes 70 kg of pork per animal). The reason for scaling back purchases is not identified, but rising prices may have prompted the decision. The analysis said the volume of swine being produced is shrinking slightly, but consumers are red...

Chinese farmers are looking for more clarity about promises of higher subsidies for corn and soybeans so they can decide whether it's worth renting land for upcoming spring planting. Chinese officials hoping to carry out a policy directive to expand soybean production this year recently announced that this year's subsidy payment for soybeans would exceed the corn subsidy by 200 yuan per mu this year, but they did not announce the amount of the subsidy for either crop. In Heilongjiang Province--the largest producing region for both crops-- last year's payments were 320 yuan per mu (about $280 per acre) for soybeans but the corn subsidy was slashed to 25 yuan per mu ($22 per acre). There are also "land rotation" payments for farmers who switch land from corn to soybeans or other crops. Officials in Heilongjiang also recently announced they would buy up 200,000 metric tons of soybeans for provincial reserves to bolster soybean farmers' confidence. An articl...