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Prices fall, costs rise: how can farmers survive in the squeeze?
This year's autumn harvest is as busy as ever, but what is different is the emptiness in farmers' hearts. The reason is that the temporary state reserve price for corn, which had risen steadily for 7 years, suddenly dropped by ten percentage points this year, causing corn growers nationwide to lose more than a million. Heilongjiang, a major grain-producing province
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Does agricultural product wholesale drive up distribution costs? An analysis of the necessary links in distribution
Agricultural product wholesale markets must charge fees, but this does not mean that the profits of agricultural product wholesale markets are higher than the average social profit; on the contrary, agricultural product markets are, to a large extent, livelihood projects operated on thin margins. In October 2013, the Beijing consumer price index
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116 cost-saving and efficiency-enhancing application models for agricultural IoT
To accelerate the promotion and application of mature agricultural IoT application models, on September 8, the Ministry of Agriculture released the "Compilation of Recommended Cost-Saving and Efficiency-Enhancing Agricultural IoT Application Models 2015," centrally releasing a total of 5 major categories - field crop farming, protected horticulture, livestock and poultry breeding, aquaculture, and comprehensive - comprising
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Why is low-cost urbanisation unsustainable?
In 2013 China's urbanisation rate reached 53.7%, with 730 million people included in the urbanisation process; since the start of the new century, an average of more than 20 million people have entered cities each year. This should be the largest-scale and fastest population urbanisation process within a single country in the world. Looking domestically, the urbanisation rate of the eastern region has already reached 62%, the central region 48%, and the western region 44.5%, leaving an 18-percentage-point gap between the western and eastern regions.
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Soybean Imports Under Pressure: Cost Rises by 3 Million Yuan per Vessel
On August 11, news that Russia would lower tariffs on related agricultural products roiled the commodities market. Coincidentally, the People's Bank of China's sharp downward revision of the RMB central parity rate during the same period also gave some agricultural products a different performance. Zhuochuang Information told a Securities Daily reporter that, affected by the RMB depreciation, Chicago soybean futures surged 3.5% on Monday before plunging 2.6% on Tuesday. Apart from the impact on the futures market, soybean imports are also expected to be "badly hurt" later on. As the world's largest buyer of soybeans, China has had an import dependence rate for soybeans above 50% over the past 15 years; especially in the past six years, China's foreign dependence on soybeans has exceeded 80%, and in 2014 the foreign dependence rate was around 86%. Without considering foreign exchange arbitrage, if domestic soybean traders import soybeans at the latest exchange rate, the cost per vessel increases by about 3 million yuan. Although importing enterprises can use foreign exchange arbitrage tools to reduce exchange losses, if the RMB continues to depreciate, enterprises' import costs will face the risk of a sharp rise. <p> </p> <p> On August 11, news that Russia would lower tariffs on related agricultural products roiled the commodities market.</p> <p> Coincidentally, the People's Bank of China's sharp downward revision of the RMB central parity rate during the same period also gave some agricultural products a different performance. Zhuochuang Information told a Securities Daily reporter that, affected by the RMB depreciation, Chicago soybean futures surged 3.5% on Monday before plunging 2.6% on Tuesday. Apart from the impact on the futures market, soybean imports are also expected to be “badly hurt” later on. As the world's largest buyer of soybeans, China has had an import dependence rate for soybeans above 50% over the past 15 years; especially in the past six years, China's foreign dependence on soybeans has exceeded 80%, and in 2014 the foreign dependence rate was around 86%. Without considering foreign exchange arbitrage, if domestic soybean traders import soybeans at the latest exchange rate, the cost per vessel increases by about 3 million yuan. Although importing enterprises can use foreign exchange arbitrage tools to reduce exchange losses, if the RMB continues to depreciate, enterprises' import costs will face the risk of a sharp rise.</p> <p> Soybean imports remain at a high level</p> <p> A Securities Daily reporter learned from Zhuochuang Information that Russia has stated that, in order to honor its commitments to the World Trade Organization (WTO), it will continue to gradually lower export tariffs on major oilseeds, starting from September 1, 2015. The soybean export tariff will drop to zero, and the rapeseed export tariff will drop to 6.5%, but no lower than 11.4 euros per ton. The sunflower seed export tariff will drop to 9.88%, but no lower than 14.81 euros per ton.</p> <p> In this regard, Zhuochuang Information believes this may change the pattern of China's sources for imported soybeans.</p> <p> A Securities Daily reporter checked data from the General Administration of Customs. Looking at import volume data, soybean imports showed a surge in July. The data shows that 9.5 million tons of soybeans were imported in July, while from January to July cumulative imports reached 44.66 million tons, with import volume up 7.1% year on year and value down 19.7% year on year.</p> <p> Checking data from other months so far this year shows that although soybean import data fluctuated repeatedly in the first half of this year, with differing degrees of year-on-year increases and decreases, the July import volume increased noticeably when the data are ranked.</p> <p> Separately, media reports said the surge in soybean imports was mainly because South American soybeans were cheap, stimulating increased purchasing demand from Chinese buyers. The China National Grain and Oils Information Center forecasts that soybean imports in August and September will total 13 million tons, higher than 11.06 million tons in the same period last year.</p> <p> Corresponding to the surge in imports is the continuous shrinking of the domestic soybean market. The China National Grain and Oils Information Center expects China's soybean output next year to fall to 11 million tons, below this year's 12.15 million tons.</p> <p> While news of Russia's tariff cut is still echoing, the RMB depreciation has added another layer of meaning to soybean import and export business. “The RMB has depreciated continuously for two days by a relatively large margin, which is a major positive for foreign trade enterprises. In recent years, the RMB has kept appreciating, while international market demand has been sluggish, dealing a relatively large blow to China's exports. In July this year, exports fell 8.3% year on year. After the RMB depreciation, the price advantage of China's exported goods will be somewhat strengthened, which is conducive to improving the performance of foreign trade enterprises. In fact, the main purpose of this central bank-led RMB depreciation is to promote exports.” Guo Fanli, research director at China Venture Consulting, explained to Securities Daily. Specifically for agricultural enterprises, Guo Fanli believes enterprises should actively raise the added value of their products and develop mid- to high-end business. This RMB depreciation is a good opportunity for China's agricultural processing import and export enterprises to rebuild their brand image. Agricultural processing import and export enterprises can export some mid- to high-end products, and because of the RMB depreciation, these mid- to high-end products are expected to be welcomed by the market for their relatively high cost-performance ratio. Once foreign markets have relatively high recognition of China's exported mid- to high-end products, even if the RMB appreciates in the future, it will not have a relatively large impact on agricultural processing import and export business.</p> <p> Some agricultural analysts also explained in interviews with Securities Daily that the current agricultural production model determines that domestic soybeans regaining market share will not happen overnight.</p> <p> The phenomenon of “concentrated arrival at ports” will continue</p> <p> Changes in the soybean market structure have also given the current market clear characteristics. A research report from Guotai Junan shows that China's soybean imports continue to show the phenomenon of “concentrated arrival at ports”; therefore, China's soybean imports are expected to fall month on month in August, but in absolute terms they are still expected to remain in a high range.</p> <p> Because China's soybean imports surged in July, setting the highest monthly import volume ever recorded. Guotai Junan believes that in the first seven months of 2015, there were some keywords to follow in global soybean trade: China's soybean imports will fall month on month in August, with import volume estimated at around 8 million to 8.5 million tons; China's soybean import volume once again set a record high for the same period in history, and China's soybean imports are expected to gradually decline in August.</p> <p> Now, with changes in Russia's soybean export tariff policy, the market structure may also change. Zhuochuang Information believes that China's main soybean importing countries are currently the United States, Brazil and Argentina. Looking at import data from the first half of the year, the three countries accounted for 97% of import volume, while Russia accounted for only 0.72%. However, affected by Russia's soybean exports soon facing zero tariffs, “plus the fact that in recent years farmers in Northeast China have tended to go to Russia to grow soybeans, it is expected that China's soybean imports from Russia will increase somewhat later on.”</p> <p> </p>
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The soaring cost of traditional Chinese medicinal materials is about to make them a noble medicine
On July 14, 2015, the official website of the Ministry of Commerce published the "Public Bidding Announcement of the Market Order Department of the Ministry of Commerce for the 2015 Annual Project for Business Management and Maintenance of the Online Information System for the Circulation of Medicines and Traditional Chinese Medicinal Materials." Traditional Chinese medicine is the quintessence of China, and to promote and safeguard people's health, for the
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Soybean imports slow down as yuan depreciation pushes up import costs
In recent weeks, demand from China, the number one soybean importer, has slowed, and so far orders for November shipment soybeans are only half of the same period last year, because the recent depreciation of the yuan has made overseas imports expensive. Traders say that soybean meal prices denominated in yuan
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Inverted grain prices at home and abroad: continue advancing reform to lower grain costs
The 2015 Boao Forum was held on the 26th. At the forum on "Exploring New Models of Rural Financial Reform," Chen Zhangliang, Vice Chairman and Secretary of the Secretariat of the China Association for Science and Technology, said that last year China imported more than 100 million tons of grain in one go, covering rice, millet, corn, soybeans, cotton, sugar,
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Rice purchase price left unchanged for the first time, production costs expected to fall
China's rice purchase price has been left unchanged for the first time since 2008. According to analysis, with agricultural product prices currently declining across the board, the comparative returns of grain will not deteriorate significantly, and production costs such as fertilizer and land are expected to fall, all of which
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Paying for soil remediation is difficult, and the cost of pollution control on farmland is even more considerable
High pollution exceedance rate, a trillion-yuan-scale market, a complex systemic project, an emerging industry in its early stage of development - China's soil pollution prevention and control is entering the United Nations' first International Year of Soils bearing these labels. According to the National Soil Pollution Survey Bulletin released last year, our
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