Dim Sums: Agricultural Markets in China

 "Non-GMO soybeans are our core competitive advantage"--so proclaimed the head of China's soybean industry association in a speech earlier this month.   The speech on " The development and future outlook for China's soybean industry " presented at the Dalian Commodity Exchange's China International Oils and Oilseeds Conference cited the Russia-Ukraine war, "international epidemics," and "China-U.S. relations" as factors creating crises in food, energy, and "data security." The speaker said these crises validate China's obsession with food security and the necessity of maintaining "oilseed security."  The speech was given by Yang Baolong, deputy Party secretary and general manager of Beidahuang Nongken Group, the commercial arm of the network of giant State Farms in Heilongjiang Province. The speech featured plenty of national jingoism and nods to Heilongjiang and Beidahuang as key players in China's soybean...

A puzzling tie-up between COFCO and Baowu Steel--Chinese state-owned food-trading and steel-making behemoths-- was featured at a signing ceremony for 11 collaborative agreements between 15 central state-owned companies and 5 local state-owned companies held October 31. Short English summary here . The ceremony, held immediately after the conclusion of the 20th communist party congress, is apparently a signal that newly-minted dictator-for-life Xi Jinping has endorsed state-owned companies as the core of his approach to economic management.  The chairman of the State-owned asset supervision committee presiding over the ceremony promised formation of new enterprises that would "serve the new requirements of national strategic goals." The description of the ceremony emphasized interconnections between state-owned companies, including plenty of language about "collaboration," "linkages," "integration," and "industry chains." The tie-up bet...

China's third-quarter pork output in 2022 was about the same as a year ago, yet prices are about twice as high. Something's wrong with this picture. Data in the National Bureau of Statistics' Q3 2022 report indicate pork output was 12.1 million metric tons, almost the same as last year's Q3 output of 12 million metric tons. The number of hogs slaughtered during Q3 this year was almost identical to last year, at 154.5 million, and the inventory of hogs was slightly higher than a year ago.  Data from National Bureau of Statistics quarterly reports. The report claimed that the hog price was up 36 percent from a year ago. The September consumer price index also reported a 36-percent increase in consumer pork prices. However, these figures vastly understate the increase in prices indicated by Ministry of Agriculture price reports which show wholesale pork prices nearly twice as high as last October and hog prices are up nearly 140 percent from last October.  Ministry of Agr...

Rice quality has been reduced by this year's drought conditions in south China. Cngrain.com reports that hot, dry weather has resulted in low yields, low milling yields, and degraded quality that could affect the appearance, texture and taste of long grain rice. The problems have become apparent since the October 1 National Day.  Rice with quality problems is fetching low prices, while supplies of good quality rice are tight. Grain and Oils News reported last month that the low quality of this year's crop was boosting demand for old crop long grain rice released from reserves.  Authorities began purchasing long grain rice at minimum prices in Anhui, Jiangsu, and Henan Provinces this month. Such purchases are authorized only when market prices fall below the minimum price--set this year at 129 yuan per 50kg for single-season indica rice. Rice must meet grade-3 quality standards, and rice at higher grades gets a premium. A communist party web site posted a Q&A on governmen...

China's National Bureau of Statistics blames its data problems on conspiratorial fraud between the local officials and companies that report data to Beijing. In a May 2020 campaign to crack down on fraudulent statistics an NBS official complained that fraud and fake reporting of data remained rampant in some regions and warned that inspectors are being sent out to local government offices and companies to catch the fraudsters. This was a continuation of a crackdown on statistical fraud and deceit ordered by Xi Jinping in 2021 . In July 2022 statistical inspectors were sent to China's agriculture ministry to root out fraud and falsification, punish perpetrators, and demand that all clerks and accountants take seriously the importance of quality statistics. This follows a visit last year. In August, an inspection team conducted a spot check of livestock statistical reporting in Jilin Province where they checked farm records, investigated the reporting system, and lectured loc...

Chinese officials view scaled-up techno-farms as their farms of the future. Small-scale peasant farmers still blanket the countryside, but subsidies are gradually tilting toward big farms.  business propaganda outlet Yicai proclaimed recently that scaling up farming operations is the key to addressing a crisis of chronic low earnings from grain production that undermine incentives. Yicai insisted further that small-scale farms of 10 mu could never improve rural living standards. The  Yicai  article featured the head of a "cooperative" who had acquired 19,200 mu of land through "land transfer" as a technologically adept farmer superior to the small-holder peasants who still dot China's countryside. The cooperative had boosted wheat yields and quality, linked up with a flour manufacturer, and had plans to expand his business even more. Yicai  cited a 5-year-old Farmers Daily article that found 60 percent of China's cropland is farmed by small-scale farmers ...

China's August 2022 CPI report  said pork prices were up 22 percent from a year earlier, the largest increase of any component of the price index. The Statistics Bureau reckoned that the 10-percent increase for the broader meat category contributed 0.32 percentage points to the 2.5 percent year-on-year rise in consumer prices. A year ago, the August 2021 CPI report said pork prices were down 44.9 percent from a year earlier, the largest decline of any component of consumer prices. In August last year, the meat component of the CPI pulled down the 0.9-percent CPI change by 1.2 percentage points.  According to agriculture ministry wholesale market price monitoring, August 2022 pork prices averaged 33.88 yuan per kg (about $2.23 per lb). That was higher than any historical pork price excluding the once-in-a-lifetime prices during Sept 2019 to January 2021 when African swine fever cratered pork supplies.  Data from China Ministry of Agriculture and Rural Affairs market mo...