Dim Sums: Agricultural Markets in China

One of China's top 2 soybean crushers reported a rebound in profits during 2025 despite the trade war that choked off imports of U.S. soybeans for most of the year. However, the profit report belies a gloomy outlook for China's crushing industry as it awaits another deluge of Brazilian soybeans this Spring. Arawana Holdings Co. Ltd. (known in China as Yihai Kerry) reported a 26% increase in profits in a preliminary report of its 2025 financial performance . Arawana cited improved soybean crushing margins due to strong downstream demand for its soybean meal products and reduced soybean costs during the first 3 quarters of 2025. The report said strong demand for soybean meal was driven by its high cost-effectiveness in feed formulations (thus undermining agricultural officials' plans to eliminate soybean meal from feed formulations). Margins were also aided by ample South American supplies that drove down soybean prices and lowered raw material costs. The report said procurem...

The Chinese Communist Party relies on statistics-based rankings to demonstrate success and to promote officials, creating incentives to falsify statistics from bottom to top. The Party's head-scratching campaign to address "formalism" appears to offer no real solution and suggests the Party may be collapsing in on itself.  Last week China's Ministry of Agriculture and Rural Affairs held a meetin g to prod Party officials to correct performance evaluation incentives that generate endless meetings, phony statistics, and reams of documents that distract grassroots officials from achieving practical results in agricultural and rural development work. This is part of a years-long campaign to eliminate so-called "formalism" (形式主义) that undermines the effectiveness of local Party officials and therefore diminishes the citizens' support. This year's campaign against formalism is said to be linked to the 15th five-year plan, but it may also be motivated by th...

China's customs authorities reported rejecting 14 batches of rapeseed oil from Kazakhstan in December 2025 due to detection of genetically modified material in the shipments. The report said the rejected shipments totaling 811 metric tons had been purchased by Xiamen Agricultural Products Trading Company located on China's southeastern coast. The shipments were rejected by Chinese customs authorities in the Urumqi customs region that borders Kazakhstan.  According to news from Kazakhstan  this month, Chinese officials put 3 Kazakh plants on a blacklist, 2 had suspended operations, and 5 were on the brink of closure. One of the idled plants reportedly had Chinese ownership. A Kazakh industry official reported that the China market is vital to the industry's development strategy.  The Kazakh article suggests there are disputes over the detections of GMOs: "Chinese importers periodically detect GMs in rapeseed oil shipments and return the cargo, although Kazakh laborator...

Chinese inspectors upped their rejections of beef, chicken feet, and pork from the United States, Europe and Brazil during 2025. Meat was rejected for containing hormones not permitted in China, failing sensory inspections, and lack of documentation or plant registration. The spike in rejections coincided with China's imposition of tariffs over the last 2 years designed to reverse losses of Chinese meat producers or to punish trading partners. China's rejections of imported food during 2025 increased 55% from the previous year. The volume of shipments rejected increased 150%. These were the largest values since the customs administration took over inspections at the border from the now-defunct AQSIQ in 2018.  Compiled from lists posted on China Customs web site. China rejected food shipments from about 75 countries -- from Denmark and France to Pakistan and Belarus. The top 3 trading partners with the most rejections -- the United States, European Union, and Japan -- are not kn...

China's relentless growth in exports of the amino acid lysine was finally reversed in 2025. The value of exports fell more than the volume as AD actions by the EU, Brazil and the U.S. hit prices hard in the Chinese industry. Lower prices led to gains in dozens of other markets around the world, but the value of exports was down sharply. Source: China customs data HS code 29224190. Lysine is an essential amino acid that can be used in animal diets for protein synthesis to improve muscle growth and feed efficiency. China imported lysine and other amino acid feed supplements until the early 2000s, but China now produces an estimated 70% of the world's amino acids. In addition to lysine, China exports threonine, tryptophan, and methionine.  China has the world's largest livestock herd, and China's agriculture ministry has been promoting domestic use of amino acids as a means of reducing use of soybean meal in animal diets. Yet domestic demand for lysine has been less dynami...

China's consumption of corn has grown by leaps and bounds over the past decade, but China still has the same opaque corn import quota mechanism that was set up 25 years ago when farmers fed whatever was available to backyard pigs and chickens and the country was dotted with thousands of rudimentary feed mills. China has spawned dozens of feed and livestock companies--including most of the world's largest--spread across the country. China has also become the world leader in manufacturing corn-based starch, lysine, and citric acid. China adopted a "tariff rate quota" (TRQ) system for imports of corn, wheat, rice, cotton and sugar when it joined the WTO in 2001. Trading partners envisioned the TRQ creating a small market-driven trade for commodities previously controlled by nontransparent bureaucratic mechanisms. China's corn TRQ allows a quota of up to 7.2 mmt to be imported at a low tariff of 1% while additional imports are subject to China's prohibitively high...