Dim Sums: Agricultural Markets in China

A feed mill in China's Guangdong Province has been fined by authorities for using unapproved genetically modified corn as raw material. Could this be a signal that Chinese officials are ready to crack down on corn imports? The announcement was featured in news media as one of 10 "representative cases" of the Ministry of Agriculture and Rural Affairs' campaign to "stabilize grain production, protect supply." Authorities say traces of imported GMO corn were found in the company's processing equipment in a sample inspection for GMOs. The feed company had not obtained a license to process agricultural GMOs. The batch of illegally processed corn totaled 31.02 metric tons. The corn had already been processed, but final products had not been sold, according to the description of the case. The company was fined 101,000 yuan (less than $14,000) and products were destroyed. Chinese agricultural authorities announce "representative cases" in GMO crackdow...

"' Borax pork' appears in the market again, serious investigation! " was the headline of a Guangzhou Daily article posted on many Chinese web sites earlier this month--including official Xinhua News. The article warned consumers that inspectors found that market vendors used borax to keep their pork moist and fresh-looking in a food market in south China. This appears to be a straightforward warning to consumers. But picking apart this "news" shows how authorities carefully control reporting of problems to manage public opinion and deflect blame for problems. According to the "borax pork" warning, borax was discovered during a "surprise inspection" of two food market vendors selling meatballs and pork in Panyu--a manufacturing hub and satellite city of Guangzhou in south China. Inspectors seized a box of borax used by a vendor to clean pig intestines, and chemical testing detected borax in some samples of meat. The inspection was carried...

The billions of RMB paid out to mitigate flooding and drought in China--including directives to replant crops in September within a month or two of harvest--suggest substantial damage to grain crops. Yet, Chinese authorities are sure to announce another huge harvest this year.  Funding of 732 million RMB was announced September 1, 2023 by the Ministry of Finance and Ministry of Agriculture and Rural Affairs for drought mitigation in Gansu and Shaanxi Province; recovery from typhoon damage to crops in Jilin and Heilongjiang Province; and control of rice pests and diseases in Jiangxi and Hunan Provinces.  On August 25, the Gansu Provincial finance and agricultural departments issued 50 million RMB for emergency drought relief that paid for seeds, fertilizer, agricultural plastics and equipment to replant crops, and water engineering in the province. On August 30, the Ministry of Agriculture and Rural Affairs held its videoconference to discuss use of agricultural machinery fo...

China's countryside is gradually turning into a warehouse for the country's aging population and the working-age population shrinks.  The "population pyramid" for China's countryside in 2020 has a hollowed-out base with relatively few people at peak working ages of 15-49. The largest cohort of rural people in 2020 were aged 50-54, with 24 million women and 25 million men in this age group. By contrast there were only 11 million males and 8 million females aged 15-19 in rural China during 2020.  Calculated from China's 2020 population census. Back in 2000, the rural population pyramid had a thicker base of working age people. Folks age 50-54 in 2020 (a baby boom born in the late '60s to make up for the starvation after Mao's "great leap forward") were aged 30-34--at peak working age. There were so many rural people at working age then that underemployment in the countryside was a major concern in the early 2000s. That cohort was also at peak c...

" There's no need to worry about the increase in imported agricultural products ," Chinese State media said earlier this month. The  Economic Daily  article assured readers that "the expansion of agricultural imports is not a bad thing in itself." It needs to be analyzed, authors said.  This endorsement of food imports by the Communist Party-run Economic Daily appears to be an Orwellian reversal of food security propaganda. It was posted on dozens of Chinese web sites, a sure sign that it is official Chinese communist party propaganda, not the product of a rogue commentator.  Economic Daily  authors said that "some people" have baseless worries that "China will be controlled by others if it imports food" and that "foreign low-priced agricultural products will impact the domestic industry." To prove their point, Economic Daily authors pointed out that "these situations have never occurred in over 20 years since entering the WT...

There's much chatter about China falling into deflation after its July 2023 CPI report showed a -0.3 percent year-on-year decline. The food and beverage component of CPI showed a -0.5 percent year-on-year decrease that reflected mainly a crash in meat prices--especially a 26 percent decrease in pork prices from a year ago. Meanwhile, China's Q2 2023 index of farm prices (most recent available) showed a tiny -0.4 percent decrease from last year. Looking at prices of individual commodities from China's grain bureau, ag ministry, and rural market prices shows a falling trend or plateau for many commodities that began early in 2023 as the post-COVID-lockdown recovery narrative began to vaporize. Signs of deflation are surprisingly evident in Chinese ag prices, despite farmers abandoning land, floods, and downward pressure from surging imports.  Chinese soybeans are a clear example. Xi Jinping ordered an increase in soybean production last year to reduce reliance on imported b...

China is pushing food production into its arid northwestern regions as arable land disappears and water tables are tapped out in eastern and central parts of the country. One new initiative aims to turn China's remote northwestern territory of Xinjiang into a new granary for the rest of China. Last year the State Administration of Grain announced that Xinjiang will take advantage of abundant land, water, and good climate to "excavate" the region's grain production potential to go beyond producing enough grain to meet its own needs to become a national granary that produces and stores a surplus for use of the State. The initiative calls for Xinjiang to maintain a minimum 79 million mu of agricultural land--including 63.2 million mu of "permanent basic farmland", to upgrade irrigation, build "high standard fields," develop grain and oilseed industry clusters, and reduce grain waste. The plan aims for grain storage capacity of 1.5 million metric tons...