Restaurant demand continues to gradually recover
Restaurant demand is recovering in many cities following the easing of zero covid restrictions, but the recovery is frequently described as “gradual” in many places.
In Beijing’s fashionable Sanlitun district, restaurant volumes are gradually increasing. Many shopping malls and restaurants were mostly empty following the immediate lifting of restrictions, but volumes have started to increase.
Restaurant owners note that the customers returning to in-person dining are younger customers and traffic from older customers and families seems to be lagging.
Delivery volumes continue to be strong as many consumers opt to stay at home. News media outlet Economic Times reports that many cities are seeing a large rise in delivery orders. They note a restaurant in Sichuan where delivery orders now account for over 60% of the restaurant’s daily revenue. While this is important revenue for the restaurants, meal size and takeaway revenue tend to be lower than in-person dining and this will continue to weigh on food demand.
Grains and fertilizer prices update
Futures retreat due to weaker CBOT, crude
Futures for the soybean complex in China faced heavy selloffs on Wednesday as the bearishness from lower CBOT soybean futures and the weaker crude oil market overnight rippled into the domestic market.
The main soybean meal futures contract on Dalian Commodity Exchange (DCE) slid nearly 2% on the day as traders took profits amid a weaker market sentiment.
Futures for soybeans and soybean oil were down roughly 1% by market close.
CBOT soybean futures slumped 2% overnight as traders trimmed their positions after recent rallies.
“It was mainly that the weather in South America is not yet at its most critical moment, and the drought condition factor has been priced in,” according to one trader.
The macro condition was also weak during the first official trading day of 2023 with the global crude oil benchmark Brent down 4% intraday, while the US dollar rose 1%.
Edible oil futures traded slightly lower across the board due to concerns about a slow demand recovery.
Live hog futures rebounded thanks to short-covering activities.