China F&A Monthly April 2021
In our latest China F&A Monthly: Nitrogen, phosphate, and potash prices remain high; Chinese hog prices dropped; high G&O and vegetable oil prices are rationing demand, calling for substitutes, and attracting high imports. Strong rebound for foodservice sales.
Download the full report
The main highlights for April include:
• Farm Inputs. Benefiting from tight domestic supplies, spring plowing, and rising overseas demand, the domestic fertilizer and agrochemical markets performed well in Q1 2021. The prices of nitrogen, phosphate, and potash have been steadily increasing and remain at high levels. Agrochemical players may see low profits resulting from high raw material costs and low demand in the coming off-season.
• Grains & Oilseeds. Chinese G&O and vegetable oil prices retreated in March. High prices are rationing demand, calling for substitutes, and attracting high imports. The government has taken measures to stabilize local prices, such as selling state reserves. The Ministry of Agriculture and Rural Affairs also outlined a plan encouraging feed mills to seek alternative feedstock to replace corn and soymeal.
• Animal Protein. Chinese hog prices dropped due to panic selling spurred by disease concerns, while piglet prices increased, revealing the breeding herd shortage resulting from ASF outbreaks. Pork imports in the first two months have increased 25% YOY. Poultry farming profits turned negative due to weak poultry meat prices worsened by rising input costs. Poultry imports increased 44% YOY in the first two months, with the US leading the supply.
• Dairy. Strong production growth and import growth during January and February 2021 point to a well-stocked market. For now, China seems unable to quench its thirst for safety stock. This could drive weaker import demand in 2H 2021.
• Beverages. Sparkling water drinks will become a new growth segment of soft drinks when more dairy and beverage companies tap into this area. Beer companies fully engaged in the high-end beer segment will promote industry restructuring.
• Consumer Foods. Foodservice sales recorded a strong rebound of 68.9% YOY growth in January and February 2021. Food-only retail sales saw 10.9% YOY growth, and online food-related sales were particularly strong, recording 41.6% YOY growth in January and February 2021.
Download previous editions
Unlock all content
Where to go from here
Ping ChewHead of RaboResearch Food & Agribusiness - Asia Read more
Sandy ChenSenior Analyst - Dairy
Chenjun PanSenior Analyst - Animal Protein Read more
Lief ChiangAnalyst - Grains & Oilseeds
Jingyan SunAnalyst - Farm Inputs
Stacie WanAnalyst – Supply Chains and Beverages
Michelle HuangAnalyst – Consumer Foods Read more