Dim Sums: Agricultural Markets in China

Revised statistics show China has more corn and pork, and less vegetables, fruits, milk and beef than previously reported. In their revision after conducting an agricultural census last year, China's statisticians discovered 43.7 million metric tons of additional grain--most of it corn. Their 2017 estimate of "grain" output (includes cereals, beans, and tubers) was increased from 617.9 mmt published earlier this year in a Statistical Abstract to 661.6 mmt published in last month's China Statistical Yearbook. Corn has clearly supplanted rice as king of Chinese agriculture after a 20-percent increase in estimated corn output--from 215.89 mmt to 259.07 mmt--that accounted for nearly all of the increase in estimated grain output. Corn output now clearly exceeds output of rice by a wide margin, and the revised total of 42.4 million hectares planted in corn exceeds the 30.7 million hectares planted in rice. China 2017 Grain Output Revision Old Rev...

China has had 57 confirmed cases of African Swine Fever (ASF) in 100 days. New cases are being confirmed at a rate of nearly 1 per day, and they are widely scattered across the country with no discernible pattern. Five cases were confirmed in August after the first outbreak, 18 in September, 25 in October, and 9 in the first 12 days of November. Cases are dispersed across the country in 17 provinces, with 14 cases in Liaoning, 9 in Anhui, and 6 in Hunan Province (see map below). Single cases have been confirmed in four new provinces this month: Chongqing, Hubei, Fujian, and Jiangxi Provinces, but November outbreaks have occurred in widely dispersed regions. The latest case was reported November 9 in Anhui Province. It's very possible cases are under-reported. Some localities have begun offering cash rewards to encourage citizens to report ASF cases. Cases officially announced on Ministry of Agriculture and Rural Affairs web site. Note: this is an old map that does not sh...

The soybean subsidy in China's largest soybean-producing province has been nearly doubled this year and the corn subsidy has been slashed as officials try to engineer a shift in acreage from corn to soybeans. Grain and Oils News reported last week that the Heilongjiang Provincial Government raised the soybean subsidy payment to 320 yuan per mu this year from 173 yuan last year. The corn subsidy was cut to just 25 yuan per mu from 133 yuan last year. This year's soybean subsidy would equal about $280 per acre and the corn subsidy would be about $22 per acre at the current exchange rate. Subsidy funds will be issued to county agricultural bureaus who are supposed to distribute payments to farmers within 15 days. Heilongjiang Province soybean and corn subsidies, 2017-18 Crop 2017 2018 Yuan per mu Soybeans 173 320 Corn 133 25 Source: Grain and Oils News . Grain and Oils News proclaims that the higher subsidy for soybeans has stimulated more s...

Chinese authorities sold 150 million tons of corn reserves during 2017-18 at prices 30%-40% less than they paid for it. The bill comes to an estimated $27 billion for loan write-downs and 3-to-5 years of storage and interest costs. Some commentators think the Chinese market's ability to absorb the massive injection of corn is an indication that the country now has a structural deficit in corn S&D. China's corn reserves spiked to a crisis level after the government bought up a cumulative 310 mmt of corn and managed to sell off just 70 mmt from 2012/13 to 2015/16 using a "temporary reserve" program to put a floor under prices in northeastern provinces. After making some adjustments, Chinese analysts estimated reserves reached 210 mmt in 2016. After that year's harvest authorities allowed a 30-percent decline in corn prices to a more realistic level, but they purchased an additional 30 mmt to prevent prices from falling too far too fast. During 2017 and 2018...