Corn Led China's Commodity Price Growth in 2020

Chinese corn began the first 10 days of 2021 with a 5-percent price increase, according to raw material prices released by the National Bureau of Statistics. After relentless increases throughout last year the January 2021 average corn price was up 48 percent from a year earlier. China has been showing signs of growing price volatility since the final months of 2020.

Source: China National Bureau of Statistics raw material prices.

China's soybean meal prices were up and down during 2020. A 14-percent increase in the final month left the average soybean meal price up 26 percent from a year earlier in early January. Hog prices surged 10.5 percent over the most recent month. The price of hogs is at the same level as a year ago when China was suffering from a severe shortage of pigs. The Ministry of Agriculture and Rural Affairs told us swine numbers have been recovering since then, and the ministry reported that the volume of hogs slaughtered by above-scale slaughterhouses in December was up 41 percent from a year earlier. Yet hog prices rebounded to record levels at the end of the year.

Source: China National Bureau of Statistics raw material prices.

China's agricultural prices were relatively stable during the country's peak covid lockdown period in January-March 2020--except cotton which dropped nearly 20 percent. Corn's price accelerated as the economy reopened last spring. Big sales of reserve corn, wheat and rice and record imports of corn failed to choke off the price surge. In contrast, China's wheat and rice prices were relatively steady throughout 2020 and did not rise much during December-January. 

Index created from China National Bureau of Statistics raw material prices.

Prices of industrial commodities dropped about 20 percent during China's covid lockdown. Most industrial prices recovered strongly from April to July. Industrial commodities became more volatile in Q4 2020. Copper had a surge similar to that of ag prices, but others--like polyvinyl chloride and aluminum--rose and then fell at the end of the year. No industrial commodity matched corn's cumulative 40-percent increase during 2020. Wood pulp was up 23 percent year-on-year, copper was up 21 percent, and steel rebar was up 15 percent.

Index created from China National Bureau of Statistics raw material prices.