Chinese officials have ordered state-owned companies to resume purchase of rice from farmers in northeastern provinces as they juggle the priorities of coronavirus prevention and forestalling a rice-marketing disaster.
Sinograin, the Chinese government's grain reserve corporation, says purchase of rice is about 20 days behind schedule in the northeastern provinces due to the coronavirus epidemic. Sinograin promises to place no limit on buying rice that meets quality standards. Sinograin's Heilongjiang branch says it has opened 12 purchasing points, and others have been directed to reopen soon. The risk of unsold rice molding and sprouting rises as the weather warms, and farmers need cash to plant new crops in the spring.
China's National Administration of Grain and Commodity Reserves issued a notice yesterday extending the season for purchasing rice at minimum prices in northeastern provinces to March 31, 2020 to ensure farmers are able to sell the crop they harvested last fall. The circular directs Sinograin to play its leading role as the main buyer of rice at minimum prices, improve services to farmers, and ensure there are plenty of purchasing points for rice. The document is also addressed to other state-owned companies who are instructed to act as models in buying rice: COFCO; Supply and Marketing Cooperatives; Dabeihuang and the Heilongjiang State Farm Bureau; and Sinochem, the state-owned chemical and seed giant.
The circular orders provincial and local government officials to take their provincial food security responsibility seriously while also carrying out their coronavirus prevention duties. They are commanded to launch purchases of grain for provincial and local reserves and to stick to the bottom line of ensuring that "farmers who plant grain can sell it." Local authorities are instructed to "support and guide" enterprises to buy grain. Grain must be added to the list of necessities tagged by the State Council for resuming business and production during the coronavirus crisis.
Sinograin says it has launched services to help farmers sell their grain more conveniently and to avoid waiting in long lines of trucks at warehouses. These include sales arrangements between villages and warehouses, a cellphone app farmers can use to make an appointment at the warehouse, and T.V. announcements and text messages that publicize locations of warehouses. A Wechat promo distributes standards for rice color, smell, and brokens to farmers to help them avoid wasted trips hauling rice that fails to meet quality standards. Grain depots have waiting rooms, cafeterias, and offices. Facilities check the temperature of visitors and workers, require masks, and are disinfected (probably to ease farmers' fears of infection from visiting the grain depot).
Neither the notice nor the Sinograin publicity mention that parts of Heilongjiang had an unusually poor-quality rice crop this year, and the region's rice market seized up as local mills purchased cheaper rice from southern provinces.
Wednesday, February 26, 2020
Sunday, February 23, 2020
Rebound in Pork Supply Interrupted by Coronavirus
China's swine industry is rebuilding after losing a large chunk of its herd to an African swine fever (ASF) during 2018-19, according to a Chinese Agriculture Ministry official's report last week. However, supplies are tight and prices are record-high as many villagers cannot market their hogs and only a few slaughterhouses are in operation.
The communist party's "Number one document" made swine industry recovery a major rural policy task for 2020 by issuing a directive to "accelerate recovery of hog production, ensure hog production capacity is basically restored to the previous normal level by the end of 2020." In last week's briefing on the topic, Yang Zhenhai, director of the livestock industry and veterinary bureau, reported that market incentives and policy aid have stimulated a steady recovery, and the industry is making progress in meeting the document's objective.
Yang said the inventory of productive sows in 400 counties rose 1.2 percent in January 2020, the fourth monthly increase in a row. Yang said sow numbers have increased 8 percent since October. You'll have to take his word for it, because the Ministry has not issued any monthly reports on sow and hog inventories since October 2019, the first gap in these reports since they were first issued in 2009.
In September-October 2019, the Ministry's reports said sow numbers had shrunk about 40 percent from the same period in 2018. Yang did not provide a year-on-year comparison of sow numbers for January 2020, but he said 7 provinces now have more sows than a year ago. Four of those were provinces in the northeast (Liaoning, Heilongjiang, Jilin, Inner Mongolia) where the African swine fever virus made its first appearance in China and decimated herds in the fall of 2018. The other 3 were minor pork-producing provinces Shaanxi, Gansu and Ningxia. Yang said sow numbers had increased for 8 months in Liaoning (where the first cases were reported 17 months ago), 6 months in Hebei, Shanxi and Heilongjiang, and 5 months in Henan.
Yang emphasized that the sow inventory held by "above scale" farms slaughtering 500 head or more increased 2.2 percent in January. These farms have seen five months of increasing sow numbers, and their growth exceeds the national average. He said 500-head and larger farms account for half of slaughtered hogs and are the main force in the recovery of pork supply.
Mr. Yang acknowledged that land and credit are still problems blocking pig farm expansion in some localities. He noted that pork supplies have been constrained by coronavirus quarantines and lockdowns that have disrupted transportation of feed and breeding pigs and prevented farms from supplying hogs to slaughterhouses.
According to another set of reports, the number of hogs slaughtered rebounded in December and was up 3.9 percent in January. The number of hogs slaughtered during the Chinese new year holiday was more than 40 percent less than last year's number.
The number of carcasses arriving at the Xinfadi wholesale market in Beijing increased to over 2000 per day during the weeks leading up to the holiday, but the number plunged to under 1000 per day over the past week, an unusually low number.
Xinfadi's latest report says pork supplies are tight and prices are high because many slaughterhouses are still not operating due to lack of workers. Some employees have not returned from the holiday and those that have returned are under quarantine. The Beijing market gets most of its hog carcasses from northeastern provinces where only 11 slaughterhouses are operating. Only 7 facilities are operating in Liaoning, and just 2 each in Heilongjiang and Inner Mongolia. These facilities supply the northeastern market, Beijing, and some cities in central and eastern China, Xinfadi said.
According to Xinfadi, only large-scale farms are able to deliver finished hogs. Family farms cannot market hogs because trucks cannot enter villages still under lockdown to prevent spread of the coronavirus. Purchase of hogs has been further constrained by snowfall across much of northern China last week. Xinfadi says demand for pork has also been curbed by high prices. Its early February report noted that restaurants were closed due to virus fears, further reducing demand.
With tight supplies, prices of pork, hogs, and feeder pigs continued to rise in February, according to wholesale prices reported by the agriculture ministry. The increases were counter to the usual pattern of declining prices after the Chinese new year holiday.
The communist party's "Number one document" made swine industry recovery a major rural policy task for 2020 by issuing a directive to "accelerate recovery of hog production, ensure hog production capacity is basically restored to the previous normal level by the end of 2020." In last week's briefing on the topic, Yang Zhenhai, director of the livestock industry and veterinary bureau, reported that market incentives and policy aid have stimulated a steady recovery, and the industry is making progress in meeting the document's objective.
Yang said the inventory of productive sows in 400 counties rose 1.2 percent in January 2020, the fourth monthly increase in a row. Yang said sow numbers have increased 8 percent since October. You'll have to take his word for it, because the Ministry has not issued any monthly reports on sow and hog inventories since October 2019, the first gap in these reports since they were first issued in 2009.
 |
China's ag ministry claims the sow inventory is rebounding following more than a year of steep declines,
but the Ministry has stopped issuing statistical reports since October 2019.
|
In September-October 2019, the Ministry's reports said sow numbers had shrunk about 40 percent from the same period in 2018. Yang did not provide a year-on-year comparison of sow numbers for January 2020, but he said 7 provinces now have more sows than a year ago. Four of those were provinces in the northeast (Liaoning, Heilongjiang, Jilin, Inner Mongolia) where the African swine fever virus made its first appearance in China and decimated herds in the fall of 2018. The other 3 were minor pork-producing provinces Shaanxi, Gansu and Ningxia. Yang said sow numbers had increased for 8 months in Liaoning (where the first cases were reported 17 months ago), 6 months in Hebei, Shanxi and Heilongjiang, and 5 months in Henan.
Yang emphasized that the sow inventory held by "above scale" farms slaughtering 500 head or more increased 2.2 percent in January. These farms have seen five months of increasing sow numbers, and their growth exceeds the national average. He said 500-head and larger farms account for half of slaughtered hogs and are the main force in the recovery of pork supply.
Mr. Yang acknowledged that land and credit are still problems blocking pig farm expansion in some localities. He noted that pork supplies have been constrained by coronavirus quarantines and lockdowns that have disrupted transportation of feed and breeding pigs and prevented farms from supplying hogs to slaughterhouses.
According to another set of reports, the number of hogs slaughtered rebounded in December and was up 3.9 percent in January. The number of hogs slaughtered during the Chinese new year holiday was more than 40 percent less than last year's number.
The number of carcasses arriving at the Xinfadi wholesale market in Beijing increased to over 2000 per day during the weeks leading up to the holiday, but the number plunged to under 1000 per day over the past week, an unusually low number.
Xinfadi's latest report says pork supplies are tight and prices are high because many slaughterhouses are still not operating due to lack of workers. Some employees have not returned from the holiday and those that have returned are under quarantine. The Beijing market gets most of its hog carcasses from northeastern provinces where only 11 slaughterhouses are operating. Only 7 facilities are operating in Liaoning, and just 2 each in Heilongjiang and Inner Mongolia. These facilities supply the northeastern market, Beijing, and some cities in central and eastern China, Xinfadi said.
According to Xinfadi, only large-scale farms are able to deliver finished hogs. Family farms cannot market hogs because trucks cannot enter villages still under lockdown to prevent spread of the coronavirus. Purchase of hogs has been further constrained by snowfall across much of northern China last week. Xinfadi says demand for pork has also been curbed by high prices. Its early February report noted that restaurants were closed due to virus fears, further reducing demand.
With tight supplies, prices of pork, hogs, and feeder pigs continued to rise in February, according to wholesale prices reported by the agriculture ministry. The increases were counter to the usual pattern of declining prices after the Chinese new year holiday.
 |
| Average wholesale prices reported by China's Ministry of Agriculture and Rural Affairs. |
Tuesday, February 18, 2020
Tough Year for China's Rice Farmers
China's rice market is in for a very tough year, a "Three Rurals Filling Station" (or "Go Rural") reporter warned this week. The journalist was alarmed to learn from chats and phone calls with rice growers in Heilongjiang Province that sales of the northeastern province's rice has stalled due to a perfect storm of a poor quality crop, a delayed government purchase program, the coronavirus quarantine, and unusual weather.
The reporter learned that the virus has spread quickly in Heilongjiang, villages are prohibiting movement of people, and some are using drones to monitor comings and goings. Rice marketing is nearly halted with the absence of traders and trucks. The reporter worried that rice still held by farmers may deteriorate, lose its flavor, and become moldy if held too long. This could result in unsold crops and plunging income, the reporter warned.
Heilongjiang Province issued an emergency notice on rice procurement in December 2019 when sales were proceeding at a little more than half the pace of the previous year. The provincial grain bureau said the action plan was needed due to lower-than-usual rice quality in some parts of the province and concern that large-scale farmers would be unable to sell their rice. Officials were ordered to fan out into villages, assess provincial grain output, arrange for farmers to sell grade-3 or higher rice to processors or government reserves, and help farmers improve the quality of grade-4 rice. The program also ordered detailed statistical reporting but no public reports on Heilongjiang grain marketing appear to have been issued since the program started. National figures indicate that japonica rice procurement stagnated in mid-January. The emergency program was due to end in February but a recent announcement indicates it will be extended.
A report in early January said the initial results of the action plan were disappointing. The report said new rice had "no price advantage," government reserves had little room for more rice, many processors in Heilongjiang had stopped buying local rice, and some were buying significant volumes of japonica rice from southern provinces like Jiangsu. Similarly, the "Three Rurals Filling Station" reporter heard that very little rice was being sold outside the province. This is unusual because Heilongjiang is the largest producer of japonica rice and normally ships its surplus rice to the rest of the country.
The explanation for the perverse flows of japonica rice from south to northeast is likely China's price support program. Heilongjiang and other northeastern provinces have a support price for japonica rice, but southern provinces like Jiangsu and Anhui do not. The chart below illustrates that rice prices largely follow the support price. Officials cut the support price in 2017 and 2018 to deal with massive surpluses. In 2019 the market price in Anhui province dropped about 7 percent below the support price in Heilongjiang. Prices were similarly low in Jiangsu Province and Shanghai, making it impossible for rice mills to sell their products at a competitive price and resulting in the freeze-up of rice markets in Heilongjiang. Similar perverse effects have happened to soybeans, corn, cotton, and rapeseed when those commodities were marketed with support prices in select regions in past years.
Officials usually announce the coming year's minimum price for rice in February. Officials have announced that the program will continue this year, and a terse report attributed to China Central TV indicates that the minimum price will be kept stable in 2020 or possibly raised. The announcement also reversed recent years' policy by suggesting that farmers return to growing two crops of indica (long grain) rice annually in regions where appropriate--chiefly southern provinces like Hunan and Jiangxi. This is puzzling since prices are falling, supply exceeds demand, and there is little demand for the early rice crop. The minimum price clearly props up the price of early rice, as shown in the chart below.
The "Three Rural Filling Station" reporter noted that supply and demand estimates indicate that China produces a surplus of 10 million metric tons of rice annually. The reporter estimated that the reserve of rice purchased at minimum prices has already swelled to 150 mmt and clearing out inventories is the "main theme." With such a large surplus, the reporter warns readers to expect weak rice prices.
Finally, the reporter admonished farmers to jettison "traditional thinking." The reporter suggested that farmers stop relying on government warehouses to buy rice, stop waiting for traders to knock on their door, and stop forming price expectations by comparing with neighbors. Instead, farmers should be more proactive and pay attention to analyses in news media and other outlets.
Unlike propaganda trumpeting recovery of production and abundant food, the "Three Rurals Filling Station" report is not widely posted. It only appears to be posted on two news aggregator sites.
The reporter learned that the virus has spread quickly in Heilongjiang, villages are prohibiting movement of people, and some are using drones to monitor comings and goings. Rice marketing is nearly halted with the absence of traders and trucks. The reporter worried that rice still held by farmers may deteriorate, lose its flavor, and become moldy if held too long. This could result in unsold crops and plunging income, the reporter warned.
Heilongjiang Province issued an emergency notice on rice procurement in December 2019 when sales were proceeding at a little more than half the pace of the previous year. The provincial grain bureau said the action plan was needed due to lower-than-usual rice quality in some parts of the province and concern that large-scale farmers would be unable to sell their rice. Officials were ordered to fan out into villages, assess provincial grain output, arrange for farmers to sell grade-3 or higher rice to processors or government reserves, and help farmers improve the quality of grade-4 rice. The program also ordered detailed statistical reporting but no public reports on Heilongjiang grain marketing appear to have been issued since the program started. National figures indicate that japonica rice procurement stagnated in mid-January. The emergency program was due to end in February but a recent announcement indicates it will be extended.
A report in early January said the initial results of the action plan were disappointing. The report said new rice had "no price advantage," government reserves had little room for more rice, many processors in Heilongjiang had stopped buying local rice, and some were buying significant volumes of japonica rice from southern provinces like Jiangsu. Similarly, the "Three Rurals Filling Station" reporter heard that very little rice was being sold outside the province. This is unusual because Heilongjiang is the largest producer of japonica rice and normally ships its surplus rice to the rest of the country.
The explanation for the perverse flows of japonica rice from south to northeast is likely China's price support program. Heilongjiang and other northeastern provinces have a support price for japonica rice, but southern provinces like Jiangsu and Anhui do not. The chart below illustrates that rice prices largely follow the support price. Officials cut the support price in 2017 and 2018 to deal with massive surpluses. In 2019 the market price in Anhui province dropped about 7 percent below the support price in Heilongjiang. Prices were similarly low in Jiangsu Province and Shanghai, making it impossible for rice mills to sell their products at a competitive price and resulting in the freeze-up of rice markets in Heilongjiang. Similar perverse effects have happened to soybeans, corn, cotton, and rapeseed when those commodities were marketed with support prices in select regions in past years.
 |
| Prices from China National Grain and Oils Information Center. |
 |
| Prices from China National Grain and Oils Information Center. |
The "Three Rural Filling Station" reporter noted that supply and demand estimates indicate that China produces a surplus of 10 million metric tons of rice annually. The reporter estimated that the reserve of rice purchased at minimum prices has already swelled to 150 mmt and clearing out inventories is the "main theme." With such a large surplus, the reporter warns readers to expect weak rice prices.
Finally, the reporter admonished farmers to jettison "traditional thinking." The reporter suggested that farmers stop relying on government warehouses to buy rice, stop waiting for traders to knock on their door, and stop forming price expectations by comparing with neighbors. Instead, farmers should be more proactive and pay attention to analyses in news media and other outlets.
Unlike propaganda trumpeting recovery of production and abundant food, the "Three Rurals Filling Station" report is not widely posted. It only appears to be posted on two news aggregator sites.
Wednesday, February 12, 2020
China's Rural Employment Dropped 9.4 Million in 2019
China's rural employment dropped by 9.43 million and urban employment grew by 8.28 million in 2019 as the country continued its transformation from rural to urban according to data reported by the National Bureau of Statistics last week. The number of Chinese people employed in the countryside has fallen 158 million over twenty years, according to data reported by the Bureau. The proportion of workers in the countryside fell from 70 percent in 1999 to 43 percent in 2019. The report noted that overall employment has been declining the last two years along with shrinkage of the working-age population ages 16-64 years old.
China's unemployment rate fluctuated between 5.0 and 5.3 percent during 2019, the Bureau said. Unemployment was lowest in Q2 2019, peaked at 5.3% in February and July, fell to 5.1% in October-November and edged up to 5.2 percent in December 2019. The report said job opportunities are plentiful.
A report on population by the same National Bureau of Statistics analyst said China's population surpassed 1.4 billion at the end of 2019 and the urban share of the population reached 60.6 percent. The rural population fell by 12.39 million and the urban population rose by 17.06 million during 2019. Chinese officials are fond of proclaiming their concern for "1 billion peasants," but the rural population was only 551 million at the end of 2019. The rural population has fallen by nearly 269 million over the last 20 years. The rural share of the population has fallen from 65 percent in 1999 to 39.4 percent in 2019.
Employment concerns were reflected in paragraph 18 of the "Number one document" issued last week which called for "stabilizing rural migrant employment." The document recommended subsidizing companies to keep workers on their payrolls; creating rural construction and other jobs through government investment; boosting rural service jobs in food service, nursing homes, hospitals, and e-commerce; and creating public-sector jobs in villages for plumbers, street cleaners, and guards for roads and forests. The document called for clearing up unpaid wages for migrants and recommended putting deadbeat employers on a black list. The paragraph on village conflict resolution exhorted officials to clear up disputes over unpaid migrant worker wages and to prevent disputes from being taken to higher levels of government. The document said laid-off rural migrants should be able to collect unemployment insurance benefits in their home village. The unemployment insurance burden on companies should be lightened to encourage them to take on more workers, the document said.
China's unemployment rate fluctuated between 5.0 and 5.3 percent during 2019, the Bureau said. Unemployment was lowest in Q2 2019, peaked at 5.3% in February and July, fell to 5.1% in October-November and edged up to 5.2 percent in December 2019. The report said job opportunities are plentiful.
| China: Urban Employment Growth and Rural Decline, 2019 | ||
Employment, 2019
|
Change
|
|
Million
|
||
| Total |
774.71
|
-1.15
|
| Urban |
442.47
|
8.28
|
| Rural |
332.24
|
-9.43
|
| Source: China National Bureau of Statistics. | ||
A report on population by the same National Bureau of Statistics analyst said China's population surpassed 1.4 billion at the end of 2019 and the urban share of the population reached 60.6 percent. The rural population fell by 12.39 million and the urban population rose by 17.06 million during 2019. Chinese officials are fond of proclaiming their concern for "1 billion peasants," but the rural population was only 551 million at the end of 2019. The rural population has fallen by nearly 269 million over the last 20 years. The rural share of the population has fallen from 65 percent in 1999 to 39.4 percent in 2019.
 |
| Source: China National Bureau of Statistics. |
Employment concerns were reflected in paragraph 18 of the "Number one document" issued last week which called for "stabilizing rural migrant employment." The document recommended subsidizing companies to keep workers on their payrolls; creating rural construction and other jobs through government investment; boosting rural service jobs in food service, nursing homes, hospitals, and e-commerce; and creating public-sector jobs in villages for plumbers, street cleaners, and guards for roads and forests. The document called for clearing up unpaid wages for migrants and recommended putting deadbeat employers on a black list. The paragraph on village conflict resolution exhorted officials to clear up disputes over unpaid migrant worker wages and to prevent disputes from being taken to higher levels of government. The document said laid-off rural migrants should be able to collect unemployment insurance benefits in their home village. The unemployment insurance burden on companies should be lightened to encourage them to take on more workers, the document said.
Monday, February 10, 2020
Don't Delay Spring Planting; Wear Masks
In a "letter to farmer friends" Chinese agricultural officials exhorted farmers to go into fields to prepare for spring planting while taking care to wear masks, wash hands, and avoiding congregating in groups. A circular issued by the Ministry today gave similar instructions, warning village officials not to demand unauthorized transport permits or to block roads without approval from county or higher governments in order to ensure that seeds and inputs needed for spring planting can reach villages.
While wary of the risk of coronavirus spreading through the countryside, officials are also worried that delayed preparations for spring cultivation could result in a lost harvest. The letter issued by the National Agricultural Technology Extension Service Center advised farmers, "We cannot let up on prevention," but "spring cultivation cannot be delayed." "Fields need attention--don't lose a moment, don't lose a year," the notice intoned.
Farmers were advised to prepare to fertilize and apply pesticides to winter wheat and rapeseed and to give attention to vegetable fields, fruit orchards, and tea plantations. The letter and notice warned to be on alert for fungal diseases affecting wheat and rapeseed and outbreaks of fall army worm this spring. Officials called for farmers to switch from chemical to organic fertilizers and utilize disease and pest-prevention teams to increase efficiency of pesticide applications and avoid large numbers of farmers going into fields to spray crops.
Officials urged farmers to buy seeds from legal shops in clearly-labeled packages and to obtain proof of purchase. The notice called for cracking down on fake seeds and inputs. Seed, fertilizer, and other agricultural enterprises are to be added to the list of companies that should restart normal business operations as soon as possible.
The circular also called for organizing ad hoc teams of villagers and returned migrants to do farm work. The circular advised family farms, cooperatives, and other businesses to cooperate and exchange labor to address the labor shortage facing vegetable farms.
The "letter to farmer friends" closed by reminding farmers to wear masks when leaving home, wash hands when returning, and to avoid congregating in groups while in fields. The circular ordered local officials to ensure that farms and workers go into the fields in an orderly manner at separate times and divide work.
While wary of the risk of coronavirus spreading through the countryside, officials are also worried that delayed preparations for spring cultivation could result in a lost harvest. The letter issued by the National Agricultural Technology Extension Service Center advised farmers, "We cannot let up on prevention," but "spring cultivation cannot be delayed." "Fields need attention--don't lose a moment, don't lose a year," the notice intoned.
Farmers were advised to prepare to fertilize and apply pesticides to winter wheat and rapeseed and to give attention to vegetable fields, fruit orchards, and tea plantations. The letter and notice warned to be on alert for fungal diseases affecting wheat and rapeseed and outbreaks of fall army worm this spring. Officials called for farmers to switch from chemical to organic fertilizers and utilize disease and pest-prevention teams to increase efficiency of pesticide applications and avoid large numbers of farmers going into fields to spray crops.
Officials urged farmers to buy seeds from legal shops in clearly-labeled packages and to obtain proof of purchase. The notice called for cracking down on fake seeds and inputs. Seed, fertilizer, and other agricultural enterprises are to be added to the list of companies that should restart normal business operations as soon as possible.
The circular also called for organizing ad hoc teams of villagers and returned migrants to do farm work. The circular advised family farms, cooperatives, and other businesses to cooperate and exchange labor to address the labor shortage facing vegetable farms.
The "letter to farmer friends" closed by reminding farmers to wear masks when leaving home, wash hands when returning, and to avoid congregating in groups while in fields. The circular ordered local officials to ensure that farms and workers go into the fields in an orderly manner at separate times and divide work.
Sunday, February 9, 2020
China Struggles to Keep Food System Running
China is struggling to keep its food system running while controlling movements of people and vehicles to check the spread of the novel coronavirus.
Egg producers in Hubei province have been the focus of news media attention. On February 1, Hubei's animal husbandry association told Caixin news that disruptions of feed supplies and transport of eggs had been eased after the province issued a circular that called for allowing trucks carrying agricultural products and daily necessities to travel highways freely when showing their "green channel" permit.
An emergency notice calling for maintaining normal production and supplies of livestock products was issued February 3 by the Ministry of Agriculture and Rural Affairs. In order to maintain operations of livestock farms and supply food to consumers, the circular ordered officials to allow passage of trucks carrying:
The Grain and Commodity Reserves Administration announced a dozen examples of companies supplying food and plentiful grain reserves to bolster public confidence in the food supply.
The general manager of an egg company in Hubei told a China Times reporter that his trucks still had difficulty delivering eggs to customers in Shanghai, Hangzhou, and Guangzhou last week. According to the egg boss, trucks with Hubei license plates are immediately viewed with suspicion by officials in other provinces, and some roads are closed. Officials in Hangzhou wouldn't let a delivery truck pass until the driver showed them the Ministry of Agriculture circular. After unloading, some trucks had trouble getting back to Hubei because they couldn't prove the empty trucks carried farm products. They tried unloading only half the truck's eggs so they could prove they were hauling "green channel" produce on their way back. Six of the egg-truck drivers have been quarantined for 14 days while delivering eggs, and drivers are now demanding double their usual payment to compensate for the risk of being quarantined. Consumers refuse to buy eggs that come from Hubei, and some trucks have been sent back. Officials at a market in Guangzhou ordered traders not to receive trucks or shipments from Hubei. Some farmers in Hubei, desperate to sell their eggs to generate cash to buy feed and chicks, have offered to sell their eggs at a discount but the egg company has purchased exclusively from farms that are long-term suppliers.
Corn prices in China are rising as transportation is disrupted. Some warehouses in northeastern provinces buying corn from farmers reportedly had all of it purchased immediately by livestock farmers. Auctions of corn reserves are being held to prevent companies from running out of raw materials. During February 7-11, authorities plan to auction 2.96 million metric tons of corn held in reserves since 2016 in 15 provinces. The Feb. 7 auctions sold 1.07 mmt to 308 feed companies.
As the spring planting season approaches, farmers may have difficulty buying inputs and large-scale farms are unable to get laborers to help prepare fields.
Egg producers in Hubei province have been the focus of news media attention. On February 1, Hubei's animal husbandry association told Caixin news that disruptions of feed supplies and transport of eggs had been eased after the province issued a circular that called for allowing trucks carrying agricultural products and daily necessities to travel highways freely when showing their "green channel" permit.
An emergency notice calling for maintaining normal production and supplies of livestock products was issued February 3 by the Ministry of Agriculture and Rural Affairs. In order to maintain operations of livestock farms and supply food to consumers, the circular ordered officials to allow passage of trucks carrying:
- chicks, piglets, and breeding animals
- animal feeds and raw materials
- livestock products such as meat, milk, and eggs
The Grain and Commodity Reserves Administration announced a dozen examples of companies supplying food and plentiful grain reserves to bolster public confidence in the food supply.
The general manager of an egg company in Hubei told a China Times reporter that his trucks still had difficulty delivering eggs to customers in Shanghai, Hangzhou, and Guangzhou last week. According to the egg boss, trucks with Hubei license plates are immediately viewed with suspicion by officials in other provinces, and some roads are closed. Officials in Hangzhou wouldn't let a delivery truck pass until the driver showed them the Ministry of Agriculture circular. After unloading, some trucks had trouble getting back to Hubei because they couldn't prove the empty trucks carried farm products. They tried unloading only half the truck's eggs so they could prove they were hauling "green channel" produce on their way back. Six of the egg-truck drivers have been quarantined for 14 days while delivering eggs, and drivers are now demanding double their usual payment to compensate for the risk of being quarantined. Consumers refuse to buy eggs that come from Hubei, and some trucks have been sent back. Officials at a market in Guangzhou ordered traders not to receive trucks or shipments from Hubei. Some farmers in Hubei, desperate to sell their eggs to generate cash to buy feed and chicks, have offered to sell their eggs at a discount but the egg company has purchased exclusively from farms that are long-term suppliers.
Corn prices in China are rising as transportation is disrupted. Some warehouses in northeastern provinces buying corn from farmers reportedly had all of it purchased immediately by livestock farmers. Auctions of corn reserves are being held to prevent companies from running out of raw materials. During February 7-11, authorities plan to auction 2.96 million metric tons of corn held in reserves since 2016 in 15 provinces. The Feb. 7 auctions sold 1.07 mmt to 308 feed companies.
As the spring planting season approaches, farmers may have difficulty buying inputs and large-scale farms are unable to get laborers to help prepare fields.
Saturday, February 1, 2020
Officials Wary of Food Supply Crisis Amid Epidemic
Chinese officials are working to avert a food supply crisis in the midst of the coronavirus epidemic that has closed down transportation, kept workers at home, and idled production plants. News media have been ordered to report plentiful food reserves and normal functioning of markets to head off panic-buying.
The country's Administration for Food and Commodity Reserves held a January 30 video conference emphasizing the urgency of food-supply and price-stabilization as "the most urgent political tasks." Leaders instructed provincial and city officials to:
The same day as the videoconference, official news outlet Xinhua issued an article assuring the public that China's grain reserves are plentiful, cities have reserves of rice, flour and cooking oil to alleviate any shortage, and there's no reason to panic. The food reserve bureau's deputy director assured readers that the country had capacity to process 1.5 million metric tons of rice, 800,000 metric tons of wheat, and 700,000 metric tons of edible oils daily, and the governor's grain responsibility system ensures adequate supplies to each locality.
According to Xinhua, State-owned COFCO is among 20 companies and units that can supply Wuhan--the coronavirus epicenter--with 200 metric tons of rice, about 50 tons or flour and 300 mt of cooking oils daily. A subsidiary, COFCO Biotech, is supplying 365 tons of alcohol for medical use to the cities of Shenzhen, Suihua, Zhaodong, and other cities. COFCO Biotech will also supply 922 tons of fuel ethanol to Wuhan, Xiaogan, and Huangshi cities in Hubei Province, Xinhua said.
Provincial and city news outlets dutifully issued stories about plentiful reserves, calm markets, and processing plants gearing up operations. A local news media outlet in Shaoxing--a city in eastern China's Zhejiang Province--reported that there had been incidents of panic-buying of rice and instant noodles at local supermarkets last week. Shaoxing Daily assured readers that there was no reason to panic since the local development and reform commission said reserves were adequate and had strengthened daily monitoring of food markets. The reporter's visits to supermarkets, wet markets and wholesale markets showed calm, orderly operations and stable prices. According to Shaoxing Daily, the local government has 4000 metric tons of rice reserves, 131 emergency sales outlets, and 19 processing plants with 1,760 metric tons of daily processing capacity.
The Xinhua outlet in Nanning, capital of Guangxi Province, showed videos of supermarket with shelves full of vegetables, fish, pork, and jugs of cooking oil. The camera lingered on sale price tags of RMB 4.99 per 500g for cucumbers and RMB 55 for a 5-liter jug of cooking oil but panned quickly across the meat counter where small tags indicated high prices of RMB 46-71 per kg. for various cuts of pork. A customer remarked prices were the same as usual. A supermarket worker said there was no reason to worry since the store receives multiple deliveries of vegetables and three pig carcasses daily, and never runs out of chicken, duck, or fish. A Wal-mart employee in Nanning told Xinhua the store hopes to fulfill its customers needs and showed bags of vegetables and a full shopping cart. Wal-mart's pork prices were RMB 35-45 per kg. The video also showed a poster in illustrating sanitation procedures, emphasized that the Wal-mart store is disinfected daily, and showed customers having their temperatures taken at the store's entrance. Customers and workers were wearing masks.
Before the coronavirus epidemic struck, pork supplies were the priority concern for Chinese authorities after an African swine fever epidemic decimated pork supplies in the second half of the year. In August 2019, Vice Premier Hu Chunhua proclaimed stabilization of pork supplies as an important political task, prioritized ensuring pork supplies during this month's spring festival and upcoming political meetings in March, and called for "guidance of public opinion." Guangxi Province planned to sell 1900 metric tons of frozen pork from reserves during the January holiday at a price of about RMB 32 per kg.
The country's Administration for Food and Commodity Reserves held a January 30 video conference emphasizing the urgency of food-supply and price-stabilization as "the most urgent political tasks." Leaders instructed provincial and city officials to:
- release reserves of grain as needed and to inject rice, flour, and cooking oil into city markets to prevent shortages, panic-buying, or spikes in prices
- set up emergency food supply programs
- monitor and report supplies and prices on a daily basis
- resume food production at "backbone" rice, flour, and edible oil processing companies
- move food into cities to prevent shortages, panic-buying and price spikes.
- use news media propaganda to "stabilize market expectations"
The same day as the videoconference, official news outlet Xinhua issued an article assuring the public that China's grain reserves are plentiful, cities have reserves of rice, flour and cooking oil to alleviate any shortage, and there's no reason to panic. The food reserve bureau's deputy director assured readers that the country had capacity to process 1.5 million metric tons of rice, 800,000 metric tons of wheat, and 700,000 metric tons of edible oils daily, and the governor's grain responsibility system ensures adequate supplies to each locality.
According to Xinhua, State-owned COFCO is among 20 companies and units that can supply Wuhan--the coronavirus epicenter--with 200 metric tons of rice, about 50 tons or flour and 300 mt of cooking oils daily. A subsidiary, COFCO Biotech, is supplying 365 tons of alcohol for medical use to the cities of Shenzhen, Suihua, Zhaodong, and other cities. COFCO Biotech will also supply 922 tons of fuel ethanol to Wuhan, Xiaogan, and Huangshi cities in Hubei Province, Xinhua said.
Provincial and city news outlets dutifully issued stories about plentiful reserves, calm markets, and processing plants gearing up operations. A local news media outlet in Shaoxing--a city in eastern China's Zhejiang Province--reported that there had been incidents of panic-buying of rice and instant noodles at local supermarkets last week. Shaoxing Daily assured readers that there was no reason to panic since the local development and reform commission said reserves were adequate and had strengthened daily monitoring of food markets. The reporter's visits to supermarkets, wet markets and wholesale markets showed calm, orderly operations and stable prices. According to Shaoxing Daily, the local government has 4000 metric tons of rice reserves, 131 emergency sales outlets, and 19 processing plants with 1,760 metric tons of daily processing capacity.
The Xinhua outlet in Nanning, capital of Guangxi Province, showed videos of supermarket with shelves full of vegetables, fish, pork, and jugs of cooking oil. The camera lingered on sale price tags of RMB 4.99 per 500g for cucumbers and RMB 55 for a 5-liter jug of cooking oil but panned quickly across the meat counter where small tags indicated high prices of RMB 46-71 per kg. for various cuts of pork. A customer remarked prices were the same as usual. A supermarket worker said there was no reason to worry since the store receives multiple deliveries of vegetables and three pig carcasses daily, and never runs out of chicken, duck, or fish. A Wal-mart employee in Nanning told Xinhua the store hopes to fulfill its customers needs and showed bags of vegetables and a full shopping cart. Wal-mart's pork prices were RMB 35-45 per kg. The video also showed a poster in illustrating sanitation procedures, emphasized that the Wal-mart store is disinfected daily, and showed customers having their temperatures taken at the store's entrance. Customers and workers were wearing masks.
Before the coronavirus epidemic struck, pork supplies were the priority concern for Chinese authorities after an African swine fever epidemic decimated pork supplies in the second half of the year. In August 2019, Vice Premier Hu Chunhua proclaimed stabilization of pork supplies as an important political task, prioritized ensuring pork supplies during this month's spring festival and upcoming political meetings in March, and called for "guidance of public opinion." Guangxi Province planned to sell 1900 metric tons of frozen pork from reserves during the January holiday at a price of about RMB 32 per kg.