China Agriculture View » Agriculture Market

Why is China Still Buying Beans?

Bonnie — Sun, 30 Aug 2009 09:28:30 +0000

In recent weeks, China has set record for soybean imports, even eclipsing last year’s strong position.Chinese crushers have found it more profitable to import soybeans, rather than turn to government auctions, which have drawn scant interest. However, imports are expected to slow, if only because near-term demand is satiated.

But with generally favorable weather conditions in the northern hemisphere and firming US bean yield estimates what’s the rush? At the beginning of August 66% of the US’s soybean crop was rated as in good to excellent condition, although crop progress is currently slow with only 72% of pods setting compared to 85% for the five year average.

The USDA’s most recent report forecasts a lift in 09/10 oilseed end stocks, and even though this forecast is heavily reliant on South America’s production returning to normal, sharply higher production is expected based on large US bean plantings. Large South American production levels are possibly due to low wheat plantings, but production and availability of soybeans out of this region remains politically sensitive.

The Chinese government is holding another auction for 500,000 MT of soybeans today, and reports are that the Chinese government is considering a 200 yuan/t ($A35.42) subsidy to soybean crushers to encourage them to purchase government stocks. Possible answers to China’s current soybean purchases include high consumer demand, high crush margins on imported beans or a desire to control internal prices. But they could also be related to a genuine worry of future supply levels given solid demand, potential damage from a late nth hemisphere frost and unstable supplies out of Argentina.

Price of China’s Agricultural Products Up 0.5% From Last Week

Bonnie — Thu, 13 Aug 2009 01:47:16 +0000

Prices of agricultural products in 36 Chinese large and medium-sized cities rose 0.5 percent this week from Aug. 3, according to figures released by the Ministry of Commerce (MOC) Wednesday.

Thirty-one out of 57 kinds of farm produce saw week-on-week price increases while the prices of 18 types saw a drop, said a report on the MOC website.

Vegetable prices climbed 4.5 percent week on week due to a decrease in supplies caused by rainstorms, while egg prices rose 0.7 percent from a week earlier.

The wholesale prices of pork, beef and mutton edged up 1.9 percent, 0.5 percent and 0.1 percent, the MOC said.

Source:Xinhua

The Impact of China’s Agriculture Policies on Domestic and International Markets

Bonnie — Tue, 14 Jul 2009 01:28:59 +0000

China’s agricultural policie has been changing despite little change in policy objectives. This investigates potential implications of recent agriculture policies applied in China, and quantitatively analyzes their impacts on domestic and international commodity markets.

Results from a 42 country partial equilibrium dynamic agricultural simulation model indicate that the effects on international markets are likely to be small with world price impacts of less than one percent. The set of policies partially offset each other in the international market. Results indicate increased returns to farmers and lowering domestic prices to consumers.

China’s producers increase production slightly because of increased input subsidies. Exports are reduced because of applied export tax and decrease in value added tax rebate. Domestic consumer prices would likely decrease by 2 to 4.5 percent in real terms. The lower prices benefits lower income and rural households, and benefit expanding beef, pork, and poultry production in China.

Source: International Association of Agricultural Economists (2009 Conference)