The National Development and Reform Commission (NDRC) said in an announcement on its website that the minimum purchase prices for white wheat and red wheat will be increased by 3 yuan (US$0.44) from the 2009 level to 90 yuan and 86 yuan for every 50 kg, respectively.

The move aimed to protect farmers’ interests and promote grain production, according to the NDRC.

(Xinhua News)

Concern spread earlier this month that US tariffs imposed on tires from China would spark a retaliatory slowdown in purchases of US crops and farm products.

The US placed tariffs of 35 percent on tires from China early this month, acting on a union complaint that imports were pushing workers out of jobs.

Following the US actions, China announced a probe into the alleged dumping of American automotive and chicken products.

China is the biggest buyer of US soybeans and the second-largest importer of poultry and pork.

Soybean growers in the United States, the world’s biggest supplier, want to increase livestock feed sales to small landowners in rural China to help boost exports, the United Soybean Board reported.

China’s feed industry consumes about 100 million tons of protein meal annually, with half of that used by small land-holders who often feed table scraps to their chickens, hogs and dairy cows, said Thomas Wray, a director of the board that helps market US soybeans internationally.

Only about 30 percent of China’s protein meal needs are met with soybean meal, Wray said.

China’s untapped rural feed industry “is the largest meal market in the world,” Wray, a Kansas soybean grower, said during a recent interview in Cebu in the Philippines.

“It’s a huge opportunity. What we’ve got to do is to continue to educate the rural part of China on how to feed their animals,” he said.

US growers are counting on expansion of the world’s third-largest economy to boost demand for meat and to encourage China’s farmers to switch to feed-meals to lift productivity. Soybean futures have dropped 21 percent since the end of May on a forecast for record US output in the 2009-10 marketing year.

China’s economy expanded 7.9 percent in the second quarter from a year earlier, fueled in part by 4 trillion yuan in stimulus spending.

In 2008, bilateral trade amounted to $333.74 billion, making China and the United States each other’s second-largest trading partners.

In the past five years, American exports to China grew by 20 percent annually. Last year, China accounted for 49 percent and 34 percent of American soybean and cotton exports, respectively.

COFCO, the country’s largest oil and food producer, plans to build a soybean processing plant in southwestern China’s Guangxi Zhuang autonomous region with a capacity of 1.2 million tons a year, according to a Xinhua News Agency report.

The report, citing sources familiar with the project valued at 1.85 billion yuan, stated that construction would likely be in Qinzhou in the Beibu Gulf economic zone.

In April, COFCO opened a 4 billion yuan oil-pressing project in Tianjin.

China’s major edible oil producers, including Sino Grain Oils & Fats Industrial Co and Jilin Grain Group, also plan to open new factories to boost capacity.

Per capita edible oil consumption is 14.5 kilograms a year in China.

In 2007, only 44 percent of capacity was in operation, and many of the closures were plants with a daily capacity below 1,000 tons, according to the report.

The Chinese government encouraged a restructuring of the industry to form some big companies that would have better logistics and port facilities, Liu Xiaonan, a commission official, said at a soy conference last month.

Liu said the government was encouraging soy plants to sign long-term contracts to ensure supplies because China relies heavily on imports.

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.

“We’ve already taken active measures to rectify the situation, including emergency irrigation,” he told Reuters on the sidelines of a conference in Beijing. “There is still time. The situation is serious, but if there is rain and if the harvest is later, I believe there won’t be a crop failure.”

“We’re adopting techological measures – artificial rain, irrigation – and are also considering replanting and adjusting the mix (of crops).”

Reuters

Xinjiang is China’s largest cotton production base, the unfavorable factors like warm winter, less snow, low cotton price have led to speculation that Xinjiang will reduce large area of cotton cultivation.

The cotton industry occupies its important position in economic development in Xinjiang, due to several factors including advantages of natural resources. The cotton industry has become the “trump card” industry in Xinjiang’s economy development. In 2003, Xinjiang’s cotton production accounted for 30% of China’s total cotton production. From 1994 to 2004, the cotton yield, total output, and quality measurement all ranked No.1 in China.

Cotton has become a major crop and source of income in Xinjiang. Cotton production helps to increase farmer’s income, and the standard of living in the rural areas. This led to improved economic development and social stability in Xinjiang. Revenue from cotton and related industries accounts for 1/6 of the GDP in Xinjiang.

At the present time, cotton is Xinjiang’s most important cash crop.Environmental conditions in Xinjiang are ideal for cotton cultivation.