Recent Ag Shock Waves in China
This week’s WASDE wasn’t the only thing that sent shock waves throughout China. For the past two weeks, Chinese leaders have been holding their annual Chinese People’s Political Consultative Conference (CPPCC), as well as the National People’s Congress. Contrary to popular belief, there actually are other political parties in China, and the CPPCC is the forum for those parties to express their vision for China’s future. Of course, the CPC is the dominant player, and many other parties are at least, in some fashion, aligned with the CPC.
During this year’s conference, in a side interview with Reuters, Agriculture Vice Minister Niu Dun spoke about the Syngenta’s MIR 162 variety that has ultimately ceased all shipments of corn from both the U.S. and South America. Despite its approval in virtually every country that imports corn, China has yet to announce its intentions. The National Biosafety Committee, the body that recommends whether or not a specific trait be approved or not, meets three times a year; March is slated for one of those meetings.
Should the trait be approved, it would then go to Minister Han for approval. Minister Han later publically proclaimed that he in fact ate GM food (in the form of soybean oil) and that GM technology will take time for the public to approve. In the interview, Vice Minister Niu said that it is “possible” for the trait to be approved in the first half of 2014, although some different translations have him quoted as saying “it is likely” to be approved in first half 2014.
Following the interview, the MOA released this English version interview with Minister Niu regarding China’s long-term vision of GMOs and rumors that certain farmers are already illegally cultivating GM varieties. Currently, China allows the cultivation of GM cotton and GM papaya. In the release, Huang Dafang, research fellow of Biotechnology Research Institute under CAAS, had this to say about a broader outreach of GM cultivation:
“Conventional technology might not solve all the bottlenecks in agricultural development in China, while GM technology might increase food supply and farmers’ income as well.”
Chinese crush margins continue to be below breakeven and as inventories pile up, many are using vessels as floating storage, creating bottlenecks at Chinese ports. Meanwhile, in Brazil, average wait times of 53 days (and some extending up into the 70s) in Paranagua are enough to scare many buyers in cancelling or rolling sales.
As U.S. hog prices continue their upward run on PEDv concerns, hog prices in China continue to plummet as the national average pig price is around 11.6 RMB/kilo. Hog producers are losing, on average, 200 to 300 RMB per head, making for some hard times. Additionally troubling, TSC — a state-owned company in Taiwan — reported the loss of 16,000 pigs this past year due to the disease. PEDv has reportedly afflicted 3% of the Taiwanese swine population.