Table – Feed production in June falls sharply on year
Feed production in June was down sharply, falling 9.4% compared to last year. Corn accounted for 34% of compound feed use, up 9.9% compared to last year. Soybean meal use accounted for 15.1%, up 1.8% compared to last year. The increase in corn feeding is primarily due to the shift away from wheat and back towards corn.
The average price for compound feed rose to 3,730 yuan/ton ($552/ton), up 0.6% m/m and up 8.7% y/y.
Agriculture-related lending grows rapidly
Growth in agriculture-related lending outpaced overall loan growth according to a new report issue by the 21 Century Financial Research Institute, a China-based economic research group.
The study found that at the end of March, agriculture-related loans totaled 45.6 trillion yuan ($6.7 trillion USD) which represented year-on-year growth on 12.2%. This is a faster rate of growth than the 10.9% seen at the same time last year.
Of this amount, 35.4% is held by just 6 major state-owned backs. Part of the reason for this higher loan growth is an increased focus on agriculture and ‘rural revitalization’. Economic development in the countryside has lagged development in the cities, and the past years have seen a major push towards this goal of ‘rural revitalization’ and increasing economic development in rural areas.
At the same time, many of the large state-owned banks and financial institutions are being called upon to help increase the development level of China’s relatively young agricultural insurance market.
This increase in loans also creates risks because China’s agriculture insurance market is relatively underdeveloped. Farmers may take on loans for seed or new equipment but may be in financial trouble if they have a bad crop year and no insurance.
Brazil beef exports to China spike in June
Beef exports from the Brazilian state of Mato Grosso to China jumped 7.5% last month to 45,560 tons, according to recent data from the Mato Grosso Institute of Agricultural Economics (IMEA).
China is a main buyer of Brazilian beef this year, accounting for over three quarters of total beef exports from Mato Grosso.
Chinese demand for Brazilian beef grew substantially this year so far, along with stronger appetite for Argentinian, Australian and Uruguayan beef, as protein demand in China is gradually shifting from pork to other premium meat types.
(2022 data: January-June)
