• English
  • 简体中文
  • 繁體中文
  • Tiếng Việt
  • ไทย
  • Indonesia
Subscribe
Real-time News
Trump Media & Technology Group (DJT.O) fell 6% in premarket trading.Trump Media & Technology Group (DJT.O) has filed to issue an additional 134 million shares of common stock.Indian automakers have proposed reducing tariffs on electric vehicles from around 100% to 30% in phases after 2029, sources said on April 2. Automakers are concerned that any agreement with the United States will set a precedent for trade negotiations with the European Union and the United Kingdom. Cutting tariffs on electric vehicles will be part of the first phase of a trade deal with the United States.According to the European Mediterranean Seismological Center, a 4.7-magnitude earthquake occurred 118 kilometers south of Mandalay, Myanmar, at 17:15 local time on April 2, with a focal depth of 10 kilometers. The epicenter was located at 20.910 degrees north latitude and 96.076 degrees east longitude.On April 2, Royal Bank of Canada Global Asset Management Group expects that in addition to the measures already announced, US President Trump will announce a comprehensive increase in tariffs. Andrzej Skiba, head of the US fixed income department of asset management group BlueBay, said that other countries may follow with a wave of retaliatory measures. Even if individual steps can be reversed later through concessions, we believe that most steps will remain unchanged. The asset management companys baseline scenario envisions an average tariff rate of 10%, with some countries and industries bearing much higher burdens.

Unusual Decline in China's Soy Consumption May Herald The Beginning of Pork Downturn -Braun

Haiden Holmes

Apr 22, 2022 09:42

S2.png


This enabled China's pork production to reach its greatest level in over three years in the first quarter of 2022, filling a protein gap caused by African swine disease (ASF). A few years ago, ASF wiped out a sizable portion of the hog herd.


However, a correction may be imminent if feed prices continue high, especially given that Chinese hog breeders may be culling hogs after a prolonged period of financial loss. This might further depress soybean demand, which is already far below trend this year.


China will import 91 million tonnes of soybeans in 2021-22, down from over 100 million the previous year, according to the US Department of Agriculture. That would be the second period since 2003-04 that imports have decreased on a year-over-year basis, the other being 2018-19, when ASF and the US trade war dampened demand.


That forecast, however, contradicts China's official projection of record soybean imports of 102 million tonnes in 2021-22. This forecast has been constant since mid-2021, but the USDA's original objective for 2021-22 was 103 million tonnes about a year ago.


China produces more than 90% of the meat it eats, and the USDA projects that the population will consume a record amount of meat in 2022, after a three-year decline. Although production is near pre-ASF levels, the remaining supply will be met by far greater imports than in pre-ASF periods.


Reduced soybean imports often imply reduced hog production and a possible rise in meat imports, although import reductions in both raw materials and final goods may not be sustained in the absence of a broader demand change.


One notable trend is China's growing appetite for beef, the majority of which is imported from the United States. As of mid-April, China has acquired more beef from the United States than pork for shipping in 2022, despite the fact that beef costs almost three times as much.


Pork continues to be China's preferred protein, accounting for 69% of meat consumption this year, compared to 13% for beef. Chinese authorities stated this week that pork farmers will likely return to profit by the third quarter of this year, but only if feed prices are corrected by then.

DIP IN SOYBEAN

Expensive soybean meal and, maybe, government directives have prompted hog producers to reduce soybean amounts in feed.


Beijing claimed in February that it could slash soybean consumption by 30% by lowering the protein content of cattle diets, a probable effort to minimize dependency on imports, but this might jeopardize meat output.


Increased imports of maize, wheat, and sorghum from China may encourage some farmers to convert to alternate feed materials. However, Beijing said earlier this month that high corn costs and poor hog margins were also putting a damper on corn consumption.


Along with the low crush margins in China, there are less soybeans available for export this year, and prices have increased, reducing import quantities. Brazil's top supplier's crop declined by much to 20 million tonnes from initial projections, but China's lighter imports were well underway before Brazil's issues materialized.


Soybean imports fell roughly 9% in the first half of 2021-22 (October-March), driven by a 28% fall in US exports to China between September and February. That reduction in the first half is consistent with USDA's forecast for full-year declines.


One potentially favorable development for US and Brazilian soybean exporters is that China has begun releasing imported soybeans from state stockpiles in recent weeks to help alleviate prices. China's stockpile quantity is unknown, but a decline in stocks may need another period of reloading.


Additionally, China has already secured a record amount of the forthcoming harvest, considering the timing. This is not ensure that the increased purchasing will continue later in the year, when booking activity typically peaks.


Karen Braun is a Reuters market analyst, and the opinions stated above are her own.