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China Agricultural Newsletter - June 2018

The China Agricultural Update is provided by the Iowa Economic Development Authority's (IEDA) office in China, which is operated by Phoenix Consulting LLC. Ms. Wendy Zhang, IEDA's trade specialist in the China office, can provide customized market research information for your company. For more information on how to utilize the services offered by IEDA's Beijing Office, please contact Mr. Joseph Rude at joseph.rude@iowaeda.com.

Laws, Regulations and Policies

USDA: China Responds to U.S. 301 Announcement with Revised Product List

 On June 16, 2018, MOF published a list of U.S. exports that will be subject to a 25-percent tariff increase. MOF stated that these tariffs were in accordance with the "People's Republic of China Foreign Trade Law," "The People's Republic of China Import and Export Tariff Regulations," other PRC laws and regulations, as well as the basic principles of international law. 

China vows to boost imports for balanced trade and consumption upgrading

 China will take a slew of incentives to further boost imports so as to drive domestic industrial upgrading and better meet the increasingly diversified consumption demands of people, the State Council decided at an executive meeting chaired by Premier Li Keqiang on Wednesday.

China announces anti-dumping measures on Brazilian broilers

 BEIJING - China's Ministry of Commerce (MOC) on Friday announced provisional anti-dumping measures on white-feather broilers imported from Brazil.

Dairy products to get boost

 China will improve the quality of dairy products to boost the confidence of consumers, according to a guideline unveiled by the State Council on June 11.

China to cut tariffs on some goods from Asia-Pacific nations

 China will cut import tariffs on goods from certain Asia-Pacific countries, starting from July 1, according to the State Council.

China unveils more measures to draw foreign investment

 BEIJING - The State Council, China's cabinet, on Friday unveiled more foreign investor-friendly measures to further open up and promote high-quality economic development.

Industry and Business

China's farm produce prices continue to fall

 BEIJING - China's farm produce prices continued to head downwards in the week ending June 24 due to sharp drops in vegetable prices, according to the Ministry of Commerce Tuesday.

Industrial consumption of grain and corn

 Comprehensive considering the consumption of corn for manufacturing starch and starch sugar, liquors, and alcohol, the industrial consumption of corn in April amounted to 5.25 million tons. According to the statistics of the National Association of Grain Sector, the output of deep processed corn starch was 2.21 million tons, an increase of 7.28% over the previous year, consuming 3.6 million tons of corn, and the total production of starch was 2.41 million tons.

Hybrid rice seedlings planted on seaside fish ponds

 Seedlings of a new rice strain developed by China's "father of hybrid rice" Yuan Longping have just been planted in fields reclaimed from deserted fish ponds on China's eastern seashore, where high salinity had made the soil infertile.

The prohibition of hog farming for environmental protection accelerates the withdrawal of small farmers

 In China, the prohibition of hog farming for environmental protection accelerates the withdrawal of small farmers. At the same time, large-scale enterprises continuously expand their production capacity, and their new added capacity is much higher than the capacity of exited small farmers. In general, the market price of hogs will remain in a downturn in the coming two years, and hog raising industry or will suffer heavy losses in 2019.

Beef prices were 56.53 yuan/kg, and the breeding profit decreases 0.67 yuan/head

 On June 1, 2018, in the beef wholesale markets of the 36 medium-and-large sized cities, the average price of fresh boning-out leg meat was 56.53 RMB /kg, down by 0.02%% than last week. The retail prices of beef were 63.83 RMB/ kg, down by 0.09% from the previous week.

Multiple factors will affect China's chicken import pattern in 2018

 In 2017, China imported 450,000 tons of chicken products with a value of 1.029 billion US dollars. Judging from the source of imports, China’s imported chicken mainly comes from Brazil.

Summer consumption will enter the off-season and the price of eggs will continue to be low

 Since June, the price of eggs has basically remained at around 6.5 yuan/kg, and the factory price of eggs in the main producing areas was 6.74 yuan/kg this week, down by 5.06% from the same period of last month.

A long-term loss of hog farming dragged down feed consumption

 In early June, feed companies started to cut down the prices for the third time this year in order to promote sales, with the decline of around RMB 50/MT. On the one hand, due to a long-term loss of hog farming and a reduction in stocks, the demand for hog feed went down obviously, and May saw a month-on-month decline of nearly 20%; on the other hand, owing to a great drop in prices of feed materials such as corn and soybean meal, feed prices dropped.

New technology of fertilizer in China

 China has developed into the world's largest manufacturer and consumer of fertilisers. After all, the Middle Kingdom uses more than a third of the world's fertilisers available, which is equivalent to the combined consumption of the USA and India. China is in heavy need of fertilisers to satisfy its growing demand for crops and other agricultural products. 

Internet Plus Agriculture model to promote integrated rural development

 China will improve internet services and information technology (IT) infrastructure under the "Internet Plus Agriculture" model, as decided during a State Council executive meeting chaired by Premier Li Keqiang on Wednesday.

China's Longping sees Brazil corn expansion, targets seeds market

 Longping High-Tech Agriculture Co, an agricultural firm controlled by China conglomerate CITIC Group Corp, sees Brazil expanding corn output up to 5 percent per year in coming years and is investing heavily to grab a third of the country’s corn seed market.

Yili climbs up the rankings of food brands

 Chinese dairy brand Yili has jumped five places to third in a new report that ranks the world’s top 50 food brands.

Google to invest $550m in JD

Chinese e-commerce giant JD and US tech giant Google Inc announced on Monday that Google will invest $550 million in cash in JD, as part of a strategic partnership.

Coca-Cola opens new LEED-certified facility in Yunnan

 The Coca-Cola Company and Swire Group jointly celebrated the opening of a new plant in Yunnan on Friday.

Nestle, yaofang.com to jointly promote special dietary foods

 Nestle Health Science (NHSc) and yaofang.com signed partnership framework to further tap the Global Food for Special Medical Purpose (FSMP) industry in China.

Walmart China, Tencent build strategic partnership to boost digital retail

 Walmart China and Tencent jointly announced on Thursday an in-depth strategic partnership on digital retail. The two giants will enhance retail cooperation featuring digitalization and intelligence. They will focus on shopping experience optimization, targeted marketing, comprehensive payment services and stronger membership.

Chinese enterprises favor greenfield investment in U.S.: survey

 Greenfield investment is the most common initial structure for Chinese investors in the United States, according to a business report released Wednesday.

Investment negative lists on the way

 China is expected to release and implement two updated foreign investment negative lists by July 1, as foreign direct investment in the Chinese mainland continued a strong run, according to the Ministry of Commerce.

Statistics

Market Price of Major Agricultural Products in Circulation, June 11-20, 2018

 

Products

Units

Current Price

(CNY)

Price Change over Previous Period

(June 1-10, 2018, CNY)

± Rate (%)

Rice (Japonica Rice)

ton

4325.0

0.0

0.0

Wheat (Third-Class of National Standard)

ton

2382.4

16.1

0.7

Corn (Second-Class of Yellow Corn,)

ton

1768.9

-10.7

-0.6

Cotton (Ginned Cotton, Third-Class of White Cotton,)

ton

16070.9

 4.8

 

0.0

Live Pig (External Triple Crossbreed)

kg

11.6

0.2

1.8

Soybean

ton

3730.2

-16.2

-0.4

Soybean Meal (Crude Protein Content≥43%)

ton

2886.4

-51.1

-1.7

Peanut (Oil Peanut)

ton

5709.0

-65.4

-1.1

Urea (Small Granule)

ton

2086.7

12.8

0.6

Compound Fertilizer (Compound Fertilizer of Potassium Sulfate)

ton

2590.0

25.0

1.0

Pesticide (Glyphosate, 95% Technical Material)

ton

28098.2

1285.7

4.0

Source: China National Bureau of Statistics

Major meat retail price June 2018

 Pork (Lean):

                                                                           RMB1.00 yuan/kg

Average Sales Price (Street markets & Supermarkets)

Var. Percent

A.       06/11/18-
06/20/18

B.       06/01/18-
06/10/18

C.       05/11/18-
05/20/18

D.       06/11/17-
06/20/17

(A-B)/B

(A-C)/C

(A-D)/D

27.74

27.68

27.68

31.24

0.22%

0.22%

-11.20%

 

Chicken:       

                                                                          RMB1.00 yuan/kg

Average Sales Price (Street markets & Supermarkets)

Var. Percent

E.        06/11/18-
06/20/18

F.        06/01/18-
06/10/18

G.       05/11/18-
05/20/18

H.       06/11/17-
06/20/17

(I-J)/J

(I-K)/K

(I-L)/L

20.34

20.34

20.42

19.14

0.00%

-0.39%

6.27%

 

Egg:

                                                         RMB1.00 yuan/kg

Average Sales Price (Street markets & Supermarkets)

Var. Percent

I.         06/11/18-
06/20/18

J.         06/01/18-
06/10/18

K.       05/11/18-
05/20/18

L.        06/11/17-
06/20/17

(E-F)/F

(E-G)/G

(E-H)/H

9.60

9.56

9.54

7.24

0.42%

0.63%

32.60%

 

Source: China Animal Agriculture Association 

 
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