Dim Sums: Agricultural Markets in China

Gangster monopolies of local pork markets are common money-makers for China's criminal syndicates in third- and fourth-tier cities, according to news media coverage of the Chinese government's crackdown on "evil black societies" or triads this month. In Jiangxi Province's Ganzhou City, "meat lords" force pork traders to take their hogs to "designated slaughterhouses" under that gang's control, where they collect arbitrary fees. Thugs equipped with steel pipes and machetes act as an "underground enforcement team" to punish anyone who failed to use the monopolized facility. In Hubei Province's E'zhou City, authorities say a letter from an angry meat trader alerted them to a "meat tyrant's" monopolization of the city's pork market via control of a slaughterhouse where traders were charged 185 yuan to dispose of animal waste plus a fee for slaughtering without issuing any receipts or explanation of the...

Statistics from China's largest feed-producing province show steep decline in swine feed output this year as impacts of African swine fever took hold, but gains in poultry feed offset the decline. Shandong Province January-April feed production statistics show a 27.5-percent in swine feed output from a year earlier, but poultry feed production was up 8.6 percent, leaving overall output in the province unchanged from year-earlier levels. The data seem to confirm sharp declines in swine numbers due to African swine fever, but they also indicate that expansion of the poultry sector is muting the impact on feed production. (The report did not reveal statistics on feed for egg-laying poultry, aquaculture, or ruminants). Shandong was China's top feed producer during 2018 and accounts for about 10 percent of China's swine feed and more than a third of poultry feed output, according to a January report on last year's feed output . Shandong Province manufactu...

Chinese high-tech companies' experimentation with factory-style approaches to pig-farming are getting an extra boost as China grapples with African swine fever, a deadly virus that is roiling the country's massive pork industry. Feed company New Hope Group has a plan to increase its swine production ten-fold in four years, and competitor DBN plans to boost production to 10 million head by 2021--up from 1.68 million head in 2018. Alibaba and Netease are incorporating digital technology into pig farming. One company has gained attention for its complex of high-rise "pig hotels" deep in the mountains of Guangxi Province that have attracted dozens of foreign journalists, industry experts and politicians since they were constructed in 2017. The company's latest publicity scheme invited a group of scientists from Chinese research institutes and universities to conduct a "scientific assessment" of their high-rise high-tech pig complex this month . Pig f...

China's dissonant rice policy has prioritized maintaining domestic production at its current level while pondering how to dispose of massive reserves of old rice, much of it not even be fit for human consumption. One outcome appears to be China's sudden re-emergence as a rice exporter as it jettisons rice stocks in Africa. The Chinese government's top grain market analysis group has projected that China will flip from top importer to net exporter of rice in 2019/20. China's rice and wheat were designated as "crops that must be protected" (必保品种) in the communist party's  "Document Number one" issued early in 2019, and "absolute security in food grains" has been a recurring buzz word in official speeches this year. Shortly after the document was released, officials announced that the minimum purchase price for rice would be held steady this year after two years of reductions and much rhetoric last year about "marketizing" gra...

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...