China F&A Monthly October 2020

Amid the shadow of Covid-19, consumer spending during China’s ‘Golden Week’ holiday has been stronger than expected, with daily spending up 4.9% YOY. This suggests that consumers have regained confidence and the economy can make a quick recovery. The number of domestic trips in China over the eight days of holiday was around 80% of the that in same period of 2019, a big improvement on the Dragon Boat Festival in June, when total visitor number was only half of those in 2019. In the meantime, China is expected to continue agri-commodity imports from the US, particularly grains & oilseeds and animal protein products, despite the rising tension between the two nations.

The main highlights for October include:

- Domestic fertilizer prices remain stable, and this trend may continue in the next few months

- While international soybean prices have continued to surge in recent weeks, CNY appreciation could help offset part of the rising input costs for local crushers

- Hog prices declined in early October due to steadily improved production, and are expected to stay weak

- Poultry prices have been stable in recent weeks, but will be under downward pressure in the coming months

- Raw milk continued to trend higher

- Sugar control and health functionality are expected to be two key drivers pushing soft drinks into a seasonal lull

- Foodservice consumption is expected to undergo ongoing recovery for the rest of the year and F&B retail sales are likely to retain the healthy growth trend

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  • Ping Chew

    Head of RaboResearch Food & Agribusiness - Asia
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  • Sandy Chen

    Senior Analyst - Dairy
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  • Chenjun Pan

    Senior Analyst - Animal Protein
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  • Lief Chiang

    Analyst - Grains & Oilseeds
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  • Jingyan Sun

    Analyst - Farm Inputs
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  • Stacie Wan

    Analyst – Supply Chains and Beverages
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  • Michelle Huang

    Analyst – Consumer Foods
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