High temperatures continue to impact crops
According to China’s meteorological center, most of the country saw high temperatures which exceeded 35C (95F) for more than 7 days during the recent heat wave.
Additionally, most areas of central and southern China saw precipitation anomaly’s which were 80-100% lower than typically years over the past week.
The grain belt in northeastern China remains relatively unaffected by the extreme weather. According to the forecaster “the precipitation and heat conditions in most of the northeastern region are basically normal, which is favorable for the normal growth and development of crops” although they did caution some low-lying areas in Jilin province had excessive soil moisture.
In the next 10 days, precipitation is expected to be higher, but temperatures are forecasted to remain high. In its weekly outlook, the weather bureau said “continued high temperatures will be detrimental to the growth and development of crops”.
Shandong flour mills raise bids by up to 5% to source wheat
Flour mills in Shandong hiked their bids for wheat on Tuesday despite summer being a period of seasonally lower wheat demand. Some millers in the region hiked prices by up to 5%. This comes as the market in other parts of the country has been “sluggish” amid weaker demand.
Despite this year’s harvest being described as a bumper crop, wheat prices have been unusually volatile. Prices have pulled back from their recent peak, however occasionally flour mills are needing to push their bids higher in order to bring in supplies.
Some smaller state-owned warehouses are continuing to source grain from farmers after the recent harvest. A COFCO facility in Henan purchased common wheat at 3,040 yuan per ton ($451 USD/ton) but paid up to 3,240 yuan/ton ($481 USD/ton) for high quality wheat.
Subsidies proposed to help farmers scrap old equipment
China’s Ministry of Agriculture proposed a new system to accelerate the upgrading of corn harvest equipment and promote mechanization in the country’s harvest. The proposal also called for demonstration and promotion of combines in different corn-growing regions.
Along with the Ministry of Finance, the ag ministry said it had implemented new subsidies for scrapping outdated equipment and was working to help farmers finance purchases new combines.
During the recent wheat harvest, 250,000 combines were used in cross-province wheat harvesting. To assist in the harvest, fuel discounts were given, and expressway tolls were waived. Discounted fuel subsidies totaled 140 million yuan ($21 million USD) while waived expressway tolls totaled 109 million yuan ($16 million USD). Compared to other major grain producers such as Brazil or the US, farms in China are relatively small and this has impacted efficiency. Grain losses due to inefficient harvesting methods have drawn more attention from the government in recent years as the country works to improve its level of self-sufficiency.