Ag Ministry: Don't Worry, Soymeal Prices Will Come Down

Today, China's agriculture ministry told market participants not to worry about 20-to-30-percent increases in soybean meal prices discussed on this blog last week. A lengthy article on the ministry's market information website cited similar increases in soybean meal prices during April, but assured readers that prices will ease after the May 1 Labor Day holiday. The ag ministry did not mention lengthy inspections delaying customs clearance of soybeans that was the focus of feed industry articles cited by this blog last week. 

The ministry's article attributed the soybean meal price spike and widespread idling of processing plants to weather problems in Brazil that delayed arrivals of Brazilian soybeans. Lack of Brazilian soybeans disrupted the Chinese market's seasonal switchover from North American to South American supplies that normally happens in April. According to the ministry, soybean crushers' capacity utilization was only 30 percent in the first 2 weeks of April and 37 percent in the 3rd week. Soybean meal stocks were just 150,000 metric tons on April 18, just a third of stocks at this time last year.

The ag ministry says Chinese crushers have been preparing for uncertainty after Trump's election since last fall by stocking up on U.S. soybeans and locking in South American supplies. 

The ministry reported that China's grain reserve company, Sinograin, released 1.33 million metric tons of its stockpiled soybeans since April 16. The ministry expects 12 million metric tons of imported soybeans to arrive in May and 11 million metric tons to arrive in June, allowing crushers to resume operations and alleviate the short supply of soybean meal. 

China's Tax Revenue Drops as GDP Grows

China's tax revenue and GDP have been going in opposite directions. China's Finance Ministry reported a 3.5-percent decline in tax revenue in the first quarter of 2025 from the same period a year earlier, contrasting with the 5.4-percent growth in GDP reported for the same period. 

Sources: China's Ministry of Finance and National Bureau of Statistics.

The divergence between tax revenue and GDP follows very similar figures posted for 2024 when tax revenue fell 3.4 percent and GDP reportedly grew 5 percent. Tax revenue once grew more than 20 percent annually when GDP growth was 10 percent or more in 2010 and 2011, but growth has become choppy since 2019. Tax revenue declined in 3 of the last 4 years and grew only 1 percent in 2019. Either GDP statistics do not actually reflect economic activity or China's economy has fallen into a habit of building and making things that fail to generate revenue. 

China's total tax revenue grew less than 200 billion yuan between 2018 and 2024, and revenue was up and down every year. In comparison, revenue had grown about 550 billion yuan during the 6 years between 2012 and 2018.

Data from China National Bureau of Statistics database.

The largest component of China's tax revenue is the domestic value-added tax (VAT)--which should be roughly proportional to GDP. According to the Q1 2025 Ministry of Finance report, domestic VAT revenue increased by 2.1 percent year-over-year in Q1 2025, less than half the rate of reported GDP growth. Consumption tax revenue increased 2.2 percent. The tax on car purchases fell 27.6 percent from a year earlier.

Company taxes--the second-largest component of revenue--fell by 6.8 percent in Q1 2025. 

Foreign trade is not a money-maker for the Chinese government. The government gives refunds of VAT paid on products that are exported and assesses VAT on the full landed value of imports. Refunds of VAT on exported products increased by 14 percent in Q1 2025. Revenue from VAT on imports fell by 8.7 percent and tariff revenue fell by 14.8 percent in Q1 2025.

China Soybean Meal Price Spike Due to Lengthy Border Inspections

Chinese soybean meal prices are spiraling upward as customs inspectors closely scrutinize every shipment of imported soybeans. Soaring prices for the important source of protein crimp the operations of animal feed manufacturers and livestock producers in China.

China's Feed Industry Information Net reports that the inspection time for soybean cargo ships has grown from the customary 5 days to more than 20 days. Inspections are taking 30 days or more at major ports Tianjin, Qingdao, and Rizhao where ships are lined up waiting to unload cargos. Delays in unloading ships has shrunk the available supply of soybeans for Chinese crushers, in turn reducing the volume of soybean meal available to meet demands from feed mills and livestock producers. 

According to the report, tighter inspections were initially spurred by customs inspectors' discoveries of chemical contaminants and pests in shipments of soybeans arriving from Brazil last June. Last year China suspended shipments from 5 companies for 2 months. 

Then, on March 4 of this year Chinese authorities announced suspension of U.S. soybean shipments from 3 companies due to claims that customs agents discovered mycotoxins and seed coatings in shipments. The announcement was made in conjunction with retaliatory tariff announcements. The Feed Information Net report said the rigorous inspections are linked to tariffs and an across-the-board tightening of policies.

China's customs officials are screening soybeans for seed coating agent residues, ergot, weed seeds and other items. Importers are required to submit additional documentation showing fumigation reports, certificates of origin, port loading and unloading records, and in-transit temperature monitoring data. This month sampling has been switched from one out of five ships to batch-by-batch inspection of entire vessels, the report said. 

A second Feed Industry Information Net article reported that commercial inventories of soybean meal have been shrinking for the last four weeks. The article listed 16 soybean crushing plants that have suspended operations and are not expected to resume processing soybeans until after the week-long May 1 holiday. The idle plants are at ports from Panjin in northeast China to Shanghai and Zhejiang Province in the south and include Chinese private and state-owned companies as well as multinationals.

Feed Industry Information Net reported an average cash price of 3500 yuan per metric ton for 43% protein soybean meal, up 330 yuan from the previous low point. The price is highest in northeastern region at 4200-to-4270 yuan and lowest in Guangdong at 3450-to-3620 yuan. 

MySteel, a second agricultural market information site, reported steep increases in average soybean meal prices from April 2 to April 23 of 940 yuan in Tianjin (up 30%), 680 yuan in Shandong (up 22%), 760 yuan in Jiangsu (up25%), and 790 yuan in Guangdong (up 27%). 

Price quotes shown on mysteel agricultural commodities web site.

Chinese buyers have slacked off on purchases of U.S. soybeans and the peak season for U.S. bean shipments is winding down. Last week USDA inspections of soybeans bound for China were less than 70,000 metric tons, down from 135,000 metric tons the previous week. Chinese buyers have been purchasing from Brazil since January, but large quantities will not arrive until next month.

China's imports of U.S. farm products dropped in March

China's cutback on imports of U.S. products began in March as prospects of a trade war heated up and China and the United States began assessing tariffs that month. China's customs data for March indicate that China's imports of several U.S. agricultural products were down from year-earlier amounts. China's modest overall appetite for imported farm commodities made it easier for China to cut back. 

China's imports of U.S. agricultural products totaled $1.88 billion in March 2025, down $801 million from a year earlier. China's imports of all other U.S. products totaled $10.6 billion, down $502 million year-over-year.

In this chart, "agricultural" includes HS chapters 1-24, 41, 52, and 53.
Calculated from China customs administration data.

A few specific commodities accounted for nearly all of the year-on-year decline in China's imports of U.S. agricultural products. Cotton imports were down $292 million, sorghum imports were down $147 million, and soybean imports were down $133 million from a year ago. 

Calculated from China customs administration data.

In terms of volume, China's imports of soybeans increased from 2.28 million metric tons in March last year to 2.44 million metric tons in March 2025. The value declined due to lower prices this year. Import volume dropped dramatically for sorghum, corn, wheat, and cotton.

The United States was still the top supplier of China's soybean imports in March, according to the customs data. Brazil--not yet at its peak shipping season--supplied 951,006 metric tons. 

Brazil was the top supplier of China's cotton imports, but the value was only $79.3 million. Turkey, Australia, Mexico and 9 other countries supplied smaller amounts of cotton than did the United States.

 

China's imports of wheat and corn were low. Canada was the top supplier of wheat, with 161,552 metric tons valued at $48.1 million, and Brazil was the top corn supplier with 74,732 metric tons valued at $20.8 million. Australia was the only sorghum competitor for the U.S., supplying only 23,515 metric tons in March. 

Imports of some U.S. food and feed products increased year-over-year in March. Imports of processed fish and meat products were up $26.5 million, miscellaneous foods were up $25 million, food processing by-products and feeds were up $5.4 million, and whey imports were up $8 million.

China's Q1 GDP report: tepid demand, prices falling

China's agricultural GDP grew 3.5 percent from a year earlier in the first quarter of 2025, slower than the 5.4 percent growth in overall GDP according to the latest figures from China's National Bureau of Statistics. Income earned by rural businesses (predominantly farms) grew 4.7 percent. These numbers seem inflated since physical output of farm goods grew at less than the GDP growth rate and farm prices were down. Livestock output was up moderately from a year ago while prices crashed, indicating weak demand. 

The impact of consumer subsidies on the economy was narrowly focused on electronic gadgets. Production of electronic vehicles boomed, but industrial prices were down, consumer prices were mostly flat, China's exports were up and imports were down.

Farm prices in China were down 4.2 percent from a year earlier, according to the index of prices received by agricultural producers. A sharp drop in the price of corn--the largest component of animal feed--is consistent with tepid demand for meat, milk and eggs. Corn prices were down 9.8 percent, rice prices were down 5.4 percent, cattle prices were down 14 percent. Hogs and fruit were the only farm commodities with price increases.

The year-on-year increase in hog prices is misleading. Hog prices reported by the Ministry of Agriculture and Rural Affairs have fallen 28 percent from their peak level in August 2024. April 2025 hog prices are about the same as April of last year. Pork prices followed a similar path.

Wholesale prices reported by China's Ministry of Agriculture and Rural Affairs.

China's overall CPI was down 0.1 percent from a year ago, while the food, alcohol and tobacco component was down 0.7 percent. The price index for food manufacturers was down 1.5 percent year on year.

Not many crops are harvested in the first quarter, so livestock constituted the main component of agricultural output. The number of hogs slaughtered in Q1 was nearly the same as a year earlier, while pork output was up 1.2 percent, implying higher slaughter weights. Beef output (up 2.7 percent) also grew faster than the number of cattle slaughtered (up 1.3 percent). Milk output was up 1.7 percent.  Poultry meat output was up 5.1 percent, the only livestock item that exceeded the 3.5 percent growth in agricultural GDP. Production of eggs was down slightly, and mutton output fell 5.1 percent from a year earlier. The inventory of swine was up 2.2 percent from last year, the number of poultry was almost the same, and the number of cattle was down 3.5 percent. 

China continued its export-manufacturing driven pattern of growth. Manufacturing output by "above-scale" enterprises was up 7.1 percent year on year. Growth for high-tech manufacturing was 9.7 percent. Production of new energy vehicles and 3-D printing equipment were up 45% and industrial robots were up 26 percent.

Ex-factory producer prices, meanwhile, fell 2.3 percent, and raw material prices fell by the same amount.

China's property sector remained in free fall. Investment in real estate plummeted 9.9 percent from a year ago, and that followed a 9.5-percent year-over-year decline in Q1 last year. The square footage of completed commercial real estate was down 3 percent from a year ago, slower than the 19-percent year-over-year plunge reported in Q1 2024.

Per-capita consumer expenditures were up 5.3 percent. The Statistics Bureau said consumer subsidies for cell phones, tablets and smart watches helped boost consumer expenditure on the communications category by 11 percent from last year. 

China's Q1 2025 exports were up 6.9 percent and imports were down 6 percent from a year earlier. 

The Bureau claims that rural households' per capita disposable income grew 6.2 percent (6.5 percent after accounting for the slight decrease in consumer prices) in Q1. They reported that rural households' income from wages and salaries increased 6.7 percent. Rural business income went up 4.7 percent. 

The Bureau also reported that average monthly income of rural migrants had grown only 3.3 percent--half the growth rate of income from wages and salaries. The monthly earnings of rural migrants averaged RMB 5,012, which works out to about US$3.40 per hour at the current exchange rate with an average 48-hour work week.

The number of rural people with nonfarm employment was 187.95 million, up 1.1 percent from a year earlier. The Bureau reported that rural migrants had an unemployment rate of 5 percent, about the same as a year ago. The national average unemployment rate was 5.3 percent.

Tariffs impact Chinese feed and meat prices

Tariffs on U.S. imports are impacting prices for certain types of meat and animal feed.

Reports posted on China's Feed Industry Information net note that supplies of soybeans and soybean meal are tight. The latest customs data show soybean imports for March 2025 were only 3.5 million metric tons (down 7.9 percent from a year earlier), said to be the lowest monthly volume in years. Buyers have already cut back sharply on purchases of U.S. soybeans while deliveries of Brazilian soybeans have been delayed by slow Chinese customs inspections. Soybean crush volume fell to 980,000 metric tons last week.

The decline in soybeans processed constricts the supply of soybean meal available for use in animal feed. Soybean meal prices in northern China are reported on April 14 to be in the range of RMB 3,680-to-3,730 per metric ton, up RMB 200-to-230. The price in Guangdong previously quoted at RMB 3000-to-3040 per metric ton also rose RMB 200 as many northern buyers made purchases in Guangdong over the weekend.  

Futures prices for Chinese soybean meal have been fluctuating in a range of RMB 2,800-to-3000 per metric tons since February while U.S. soybean meal prices have fallen. Chinese soymeal futures prices for May delivery climbed last week as the tariff war heated up, hitting their latest peak at RMB 2958 on April 14, before declining to RMB 2839 today. 

During spring months China normally imports soybeans predominantly from Brazil. The market anticipates tighter supplies in fall months when a shortfall in U.S. soybeans will have more impact on supplies of soybeans and soybean meal. Today's soybean meal futures price for delivery in December 2025 (when soybean imports from the U.S. typically peak) is RMB 3055 per metric tons, 7.6 percent higher than the price for soybean meal delivered in May when soybeans will be sourced mainly from South America.

Dalian Commodity Exchange closing prices.

Another Feed Industry Information Net article showed announcements of increases in prices for piglet feed and feed concentrate of RMB 100 per metric ton released by several companies. Price increases are driven by rising prices of soybean meal and concentrated milk powder (probably referring to whey which is imported from the U.S. in large volumes).

The article noted rebounds in prices for broiler meat as supplies are tight following peak sales during the Chinese New Year holiday which reduced the number of chickens being marketed now. The article showed that price increases have been largest for chicken feet and wings due to the escalation of tariffs. The price of cooked chicken feet imported from the U.S. reportedly increased RMB 200-to-500 per metric ton on Monday. 

China imports beef from a number of countries besides the U.S., but beef prices are also rising. The article reports that prices of imported South American beef have been skyrocketing. The price of Marfrig beef traded on a Chinese exchange rose RMB 1,500 per ton in a single day and JBS beef rose RMB 1,200.

Domestic Chinese beef prices are also on the rebound. According to the feed industry article ban unusual decline in beef prices during 2024 attributed to an influx of imported frozen beef has been reversed in 2025. The Ministry of Agriculture and Rural Affairs has reported a 15.8-percent increase in wholesale beef prices since March--coinciding with the heating up of the tariff war. The price is up 4.6 percent from a year earlier. Beef price increases are concentrated in northern regions of China. Traders have been buying up cattle from southwestern regions where prices have remained low and transporting them to the north. 

China claims to advocate free trade

China's leaders are probably furious that they are targets of U.S. tariffs because they view themselves as the proponents of a new improved version of globalization in the 21st century. The deep divide on China's role in global trade is one of the big challenges to resolving the current trade war.

At a meeting on agricultural trade policy in Beijing last November a Chinese agricultural official recited China's support for globalization, its practice of free trade, its adherence to WTO rules, and China's role as a driving force for global agricultural development and trade. The official went on to proclaim that China is ready to address "severe challenges" to global agriculture and food security by improving resilience of global supply chains on the basis of food security, constructing a more sustainable, resilient, fair and inclusive global agricultural trade system, and by strengthening dialogue and consultation to stimulate new momentum in agricultural trade growth and to promote future-oriented re-globalization.

China's "opening up" policy initiated in the 1970s was to engage with the global trading system to "modernize" its backward companies. The idea was that Chinese companies could become internationally competitive by bringing in foreign technology and capital, by teaching Chinese companies how to operate under international rules and standards and by encouraging Chinese companies to invest abroad. In short China took advantage of the global international trading system--the set of reliable rules, standards, and dispute settlement mechanisms set up mid-20th century--to rescue the economy from disastrous socialist policies pursued after 1949.

After 5 decades of "opening up," Chinese leaders feel their companies still need help competing on the world stage. A December 2024 Peoples Daily article highlighted institutional reforms that include streamlining approvals of shipments entering China, digitizing trade, setting new product standards, and opening up experimental free trade zones and ports. The strategy calls for China to actively participate in the WTO and international rule-making bodies, engage in regional free trade agreements with innovative provisions, and expand use of insurance, futures, options and other financial products. It also includes setting up Chinese industrial chains and exporting goods with greater value-added. 

You probably missed Chinese Premier Li Qiang's call for expanding "high-level opening up" (扩大高水平对外开放) in his government work report last month. This was a reference to a pledge to improve the "institutional mechanisms" for foreign trade and investment, to alter the regional network of international trade and investment, and to improve China's Belt and Roal mechanism issued as part of a resolution to "deepen reform" at last July's communist party congress.

While expanding its engagement with the global system China now finds fault with the trading system that modernized and enriched the country. Its pledges to create a more "fair" and "win-win" system imply that the current trading system is unfair and benefits only the United States. 

Peoples Daily stressed that China's opening up constitutes "Chinese style" modernization. Behind this is the notion that all principles, standards, and policy measures must be adapted to China's unique features...which are never defined.

Part of China's strategy is to physically redraw trade routes with China as the hub using Belt and Road, by winning friends in the developing world through foreign aid, trade and international organizations, through regional initiatives with ASEAN, Eastern Europe, Central Asia and others, and by setting up overseas aid projects and industrial parks. China highlights its rail routes from western China to Europe and other experiments such as exporting wheat from Kazakhstan to southeast Asia via Chinese railroads, logistics parks and a seaport in China's Jiangsu Province.

China's credibility as a trade liberalizer is undermined by its leaders' obsessions with national security and stability. When imports threaten China's "food security" or "industry security," shipments are restricted through nontariff barriers, antidumping duties or other measures. Chinese officials turn imports on and off to manage domestic market supply and boost domestic producers. When there are gluts of domestic supplies, commodities are stored in secretive stockpiles or processed into value-added products and dumped abroad. Flows of capital, technology and labor can be rerouted or interrupted if they threaten China's extremely broad notion of national security. China wants these "food security" practices to be adopted as part of the global agricultural trading system.

Rules and standards must serve China's national interests. For example, China revamped standards for infant formula based on a pseudo-scientific finding that Chinese infants have differing nutritional needs than infants in other countries. This forced overseas suppliers to recalibrate formulations which they had to submit to Chinese authorities for approval. 

The high level opening initiative promises to expedite imports of products by simplifying the approval process and expediting inspections at the border. Yet there have been numerous reports of weeks-long delays of inspections for imported soybeans in China over the last two years. Despite improvements in the import clearance process there are still a blizzard of approvals and forms. The majority of rejections of food imports filed by customs officials continue to cite problems with documentation of shipments; only a small number of rejections are due to failure of actual inspections or testing.

China calls for exchanging data and digitizing trade information, yet the quality and reliability of China's customs data appears to have degraded. China's reported volumes of soybean and corn imports now deviate significantly from volumes of exports reported by trading partners, so no one has precise knowledge about the global supply and demand for soybeans now. 

Access to China's customs data is through a crude online data query that is difficult to use, hasn't been improved in the years since it was first introduced, and is frequently inaccessible. Analysts and traders have to rely on the UN Comtrade database or private companies to gain access to detailed Chinese customs data.

While China is eager to gather data from other countries, Chinese officials are careful to prevent Chinese data from escaping to other countries. For example, a foreign farm equipment manufacturer was forced to disable data transmission capabilities in equipment sold to China because it violated China's security law, but you can bet that China is selling its own farm equipment abroad with similar data collection and transmission capabilities. Foreigners who want to tour China's crop producing areas to gain insight about grain supplies are at risk of arrest for violating China's statistical law. 

Similarly, China is eager to obtain and stockpile germplasm and genetic resources from abroad, but sharing its own plant and animal material is a nonstarter. One of China's priorities is to build world-beating seed and animal breeding companies to compete with foreign suppliers of seeds and breeding stock, so that means keeping a tight grip on all genetic material that might be useful. 

All countries should be careful when signing on to follow China. While China has learned to use the jargon of seminar rooms and international conferences, beware the deep contradictions that can bring unexpected turbulence and unpleasant surprises. 

China's selective approach to banning foreign food suppliers

China's ban on 5 U.S. agricultural exporters contrasts with its lenient approach to domestic product safety and to suppliers in favored countries. This highlights China's cynical use of plant and animal quarantine and food safety inspections as a tool to control the flow of imports and to "diversify" import sources. 

On April 4 China's customs administration suspended 4 U.S. suppliers of sorghum and meat and bone meal and 2 suppliers of poultry products (one company appears to be on both lists):

• Chinese customs said they detected levels of zearalenone--a mycotoxin produced by certain types of mold--in the sorghum supplier's shipments. 
• Chinese customs said they detected salmonella in shipments by 3 companies of meat and bone meal to be used in animal feed. 
• Chinese customs said they detected furazolidinone, a drug banned in China, in three batches of chicken products supplied by 2 U.S. poultry producers.

A Customs administrator cited Chinese laws and regulations violated by the shipments and claimed that they threatened the safety of food in China, thus giving the suspensions an appearance of conformity to WTO requirements that such actions should be based on science and published regulations. In practice, China's inspectors of agricultural and food items are selective about which products they reject and the suppliers they suspend. Despite the pretense of science and rule-based enforcement, food inspections in China are used as a policy tool that discriminates against enemies and favors allies.

Below are some examples of problematic products that China did not ban or suspend.

While the suspension of the U.S. sorghum supplier suggests China has great concern about the safety of its grain supplies, a report on testing of 654 corn samples from domestic Chinese corn and feed products revealed that zearalenone contamination exceeded standards in 17.1% of samples in western China, 12.1% in eastern China, and 9% in central China. According to the report, zearalenone contamination was more serious than contamination by other mycotoxins also detected in Chinese corn. China's grain reserves surely contain a significant percentage of moldy grain, but no public reports on test results are ever revealed to the public. 

China's customs administration website posts monthly lists of imported food shipments it has rejected (in Chinese only). None of the suspended U.S. companies appeared on these lists. On the other hand, monthly rejection lists reveal that shipments of some overseas suppliers are rejected over and over, apparently without prompting suspensions. 

The most prominent and puzzling example is shrimp imported from Ecuador. The Ecuadorian shrimp stand out from other rejections because of the large volume of shipments (hundreds of metric tons) and their consistency (rejections appear nearly every month for 5 years). Rejections of Ecuadorian shrimp began to show up regularly in 2019, attributed to detection of fish diseases. Ecuadorian shrimp briefly hit the news in July 2020 when Chinese authorities claimed to find covid-19 virus on containers and packaging, and three Ecuadorian exporters were temporarily suspended. During 2020 China was trying to promote its claim that covid-19 entered China on contaminated food shipments. Customs rejections still listed "animal disease" as the reason for rejection for nearly every shipment. 

Compiled from China Customs Administration reports.

Over the last 5 years customs reports have listed 55 companies supplying the rejected Ecuadorian shrimp. One company has had over 100 shipments rejected (it was suspended in July 2020 but began appearing on rejection lists again in 2021). Another company had over 50 rejections. There were no announcements of suspended companies except in July 2020. In recent months a couple of shrimp shipments were rejected for detection of a type of nitrofurans drug--related to the furazolidone drug blamed for rejection of U.S. poultry shipments. 

Rejections of Ecuadorian shrimp finally tailed off in 2023 and early 2024. Then, in early 2024 Chinese news media instigated a scandal over sulphur dioxide contamination of Ecuadorian shrimp served in the Hangzhou restaurant of a Chinese internet celebrity--the first time the shrimp had received publicity since 2020. A month later, an importer claimed that accusations were false because it had been inspected at the border, but an "anti-counterfeiter" had the shrimp tested and confirmed that sulfur dioxide levels were 7 times the national standard due to use of sodium metabisulfite to prevent decomposition and keep the shrimp white. Two months later customs rejections of Ecuadorian shrimp spiked to their highest-ever level, this time predominantly citing excessive levels of sodium metabisulfite as the problem. Customs officials apparently resumed their rejections when the shrimp came to the public's attention. Ecuadorian shrimp are still being rejected in 2025, but just a handful of shipments per month. 

China's tolerance for rotten post-Soviet chicken is another puzzling phenomenon. After China approved imports of Russian chicken in 2019 China's customs lists have consistently reported rejections of chicken shipments from Russia and Belarus during most months. There were brief gaps in early 2021 and early 2024, but most other months had rejections of Russian or Belarussian chicken. The rejections were predominantly based on visual inspections (which usually means the product is spoiled or filthy). Rejections came from dozens of suppliers with a confusing mix of post-Soviet-style company names. One Belarussian company had over 50 rejections and a Russian company had 19, but most had less than 10 rejections. With a 5-year history of problems, why didn't China suspend Russian or Belarussian exporters or place blanket ban(s) on chicken from these countries?

Compiled from China Customs Administration reports.

These examples contrast China's apparent tolerance for some problematic products that are rejected month after month against the suspensions of U.S. exporters last week after 1 or 2 problematic shipments (although they have not been included on the list of rejections). These comparisons call into question China's claim that its border inspectors use a consistent risk-based approach. While China claims to be an exemplar of a science- and rules-based trading system, its officials appear to use inspections and suspensions as a discretionary tool to reward or punish suppliers.

China claims resilience to tariffs on U.S. farm products

Chinese news media say the country is confident it can cope with reduced supplies of U.S. farm goods as China raises tariffs on U.S. agricultural products. China's trade war tariffs on U.S. products are approaching 100% after China announced an 84% tariff on U.S. goods today to counter President Trump's announcement of 125% tariffs on Chinese goods. 

China's "party line" is that U.S. farmers will be hurt more than China by the tariff war because China has diversified its import sources, increased domestic production, and reduced use of soybean meal in animal feed. Weak consumer demand in China and deflationary pressures also reduce China's vulnerability to tariffs on farm product imports...at the same time these factors pose the gravest threat to China's economy sliding over the edge if its exporters of consumer and industrial products lose U.S. markets in the trade war.

An April 9 article, "China strengthened self-sufficiency in agricultural products, reduced reliance on America," said that China's 34-percent tariffs were "aimed at cutting off Midwestern farm states' exports from more than 1 billion Chinese consumers." The article claimed that American farmers would be the losers from escalating tariffs because China has "increased its agricultural self-sufficiency" since the first round of the trade war in 2018. 

An April 5 analysis by Chinese news outlet Caijing reported that China's imports of agricultural goods from the U.S. last year were valued at $27.5 billion, about 12.8% of China's agricultural imports. However, only a few products rely heavily on imports for their supply. Caijing singled out soybeans and sorghum as the commodities most reliant on imports from the United States. 

China had already reduced its agricultural imports from the United States last year. Caijing reported that imports of U.S. soybeans were down 16.3% last year, imports of beef were down 3.4%, pork imports were down 14.7%; and chicken imports were down 50%. Caijing said China had shifted its focus to importing from South America; it estimated that China's imports from Brazil alone represented the equivalent of 44.9 million hectares of land.

Caijing also reported that the United States was the top export market for China's agricultural exports, with 22-percent growth last year. Caijing attributed the growth to improved competitiveness of its seafood, vegetable and fruit exports. 

Chinese articles stress the country's success in "diversifying" its import sources. In the case of soybeans that has meant soaring reliance on Brazil. In 2024 China sourced 71 percent of its imports from Brazil, but China still imported $12 billion worth of soybeans from the United States.

The April 9 article reveals that China has been stockpiling soybeans since President Trump's electoral victory. According to the article, China imported more than 16 million metric tons between November and February, nearly 50-percent more than the previous year. The article said that the low moisture content of U.S. soybeans makes them suitable for stockpiling. The article said the short-term impact on China's soybean market will be limited since Brazilian beans are soon to hit the market. The authors speculate that soybean import costs could eventually rise 5%-to-10%, but sales of reserves later in the year and expanded supplies from Brazil could avert a price increase. 

The article notes that U.S. corn and wheat exports to China have been significantly reduced. The article notes that corn and wheat prices in China are at a 5-year low, providing a "buffer against imports." The article's authors point out that a boost in Chinese prices from reduced imports would help revive Chinese farmers' profit margins, currently suffering from low prices.

National Bureau of Statistics, Raw materials prices paid by Chinese enterprises.

China's stumbling economy and struggling consumers are one of the chief factors reducing China's vulnerability to reduced food imports. An early March article in the communist party's Xin Jing Bao noted that weak demand due to the poor state of China's economy has reduced demand for livestock products. Weak demand has, in turn, driven down prices of milk and beef and reduced feed use of corn, wheat and sorghum. Pork prices are fluctuating at a relatively low level, and pork imports have been on a 5-year slide.

China's cotton market tends to be correlated with the state of China's macroeconomy. Moreover, there is a long-term trend of shifting from cotton to manmade fibers in textiles. Consequently, China's cotton prices are also in the doldrums and demand for cotton imports is tepid. 

Chinese articles cite declining use of soybean meal in animal feed following orders issued by China's State Council in a 2020 document to find substitutes and to adopt low-protein diets that utilize amino acids. This claim is probably exaggerated. Supplies of substitutes can only make a small dent in China's annual consumption of about 70 million tons of soybean meal. China has assessed 100-percent tariffs on one substitute--canola from Canada. Only one Chinese livestock company has shown any credible progress on adopting low-protein diets for pigs. 

China is vulnerable to loss of two less prominent feed ingredients imported from the United States: whey and alfalfa. Both of these products were quietly excluded from the list of tariff increases issued in early March, indicating their importance to China's livestock economy. 

Whey, a by-product of cheese production, is used in various kinds of animal feed in China. China's imports appear to correlate with fluctuations in the country's hog market. Whey products constitute most of the value of U.S. dairy exports to China. An April 7 update on the whey market posted on China Feed Information Net observed that tariff announcements had sent traders scrambling and led to substantial whey price increases since the United States is the main supplier of imported whey. 

Source: Data from USDA GATS database.

A dairy industry expert told Xin Jing Bao last month that China has high demand for imported alfalfa as feed for dairy cattle and 85 percent of imports came from the U.S. in 2024. Alfalfa was a concern before the 2018 trade war when 36 percent of China's alfalfa supply was imported. Last month the dairy expert told Xin Jing Bao there would be limited impact since alfalfa was not included in the early March tariff increases. However, the more recent across-the-board tariffs presumably will apply to alfalfa and whey. 

Source: Data from USDA GATS database.

China Warns of Threat to U.S. Farm Trade

 China's Peoples Daily warned that a trade war could destroy the foundation of China-U.S. agricultural cooperation. An April 2 opinion piece praised the mutual complementarities in agricultural trade between the two countries, pointing out that U.S. agricultural products fulfill demands in the China market while also driving industry development and farm income growth in the United States. 

The article blames the U.S. for impacts on U.S. farmers expected to result from China's imposition of tariffs that specifically target U.S. agricultural products in retaliation for U.S. tariffs on Chinese products.

On its face, the article seems to be aimed at the Trump administration, but it seems unlikely that Trump administration officials will read a Chinese language article in a publication whose readership is primarily communist party officials. Chinese officials have already decided to impose tariffs aimed at farm products, so who is this article trying to convince? 

The Peoples Daily author(s), writing under a name that means "bell sound", cited USDA statistics, the Washington Post, and the head of the U.S. soybean export council to make their case that U.S. farmers will be harmed. Many of the arguments used in this piece echo arguments made by American counterparts over the years to convince Chinese officials to open their market. 

The article claimed that the United States exported $29.1 billion of agricultural products to China in 2023 (I see $28.8 billion on the USDA Global Agricultural Trade System web site). They claimed China was the top destination and accounted for one-fifth of U.S. agricultural exports as they tried to establish the importance of trade with China to U.S. farmers. 

Peoples Daily failed to mention that the value of U.S. agricultural exports to China fell 35 percent between 2022 and 2024, and China's ranking fell to third behind Mexico and Canada in 2024. 

Data from USDA Global Agricultural Trade System.

Data from both countries indicate farm trade has already been disintegrating over the past two years. The share of China's agricultural imports coming from the United States declined from 17 percent to 13 percent between 2022 and 2024, and the share of U.S. agricultural exports going to China fell from 19 percent to 14 percent over those years.

China's State media, including Peoples Daily, typically views imports from the United States as a sinister threat. From time to time they accuse U.S. companies and officials of manipulating prices to cheat Chinese buyers or to drive Chinese companies out of business, attributing U.S. export competitiveness to subsidies or large farms, or spreading innuendos about health risks of American foods. 

The article promised that China would be a growing market for high-quality food products. It hailed a meeting in January 2024 to restart China-U.S. technical exchanges in agriculture. This presumably refers to a meeting with the Biden administration's secretary of agriculture who has now left office. The Minister of Agriculture who participated in that meeting was arrested for corruption last year.

Appearing on the same page of the Peoples Daily were articles about: meetings in Geneva discussing China's achievements on the UN's human rights council; the Chinese foreign minister's meeting with Putin where China and Russia pledged to strengthen their "strategic relationship" as a model for the rest of the world; and a former Finnish prime minister's praise of China's Bao'ao Forum for Asia as a platform for building international consensus.

It is instructive to look back at the U.S. and China agreement on agricultural cooperation signed in 1999 following a bilateral agreement that green-lighted China's accession to the WTO. China and the U.S. agreed on collaborative work on plant protection, conventional crop breeding, and to help Chinese officials understand the U.S. biotechnology regulatory system. The Peoples Daily praised results of cooperation in biotechnology and precision agriculture. But 25 years later China is prioritizing development of its own crop varieties with the same traits prioritized in the 1999 cooperation plan (such as salinity tolerance) to achieve independence from U.S. and other foreign seed suppliers. China has prioritized some of the 1999 topics for its own work--such as post-harvest storage and precision agriculture. Biotech crops were a regular flashpoint of conflict in agricultural trade ever since China introduced its first GMO labeling law in 2001.