May 16, 2022

 

COVID-19 lockdowns in China keep agricultural analysts away from the fields

 

 

Grain traders, and brokers are finding it difficult to make projections for China's corn crop this year due to COVID-19 lockdowns preventing travel to key growing areas for assessment, Reuters reported.

 

After last year's price spikes due to severe weather and limited supply, China's corn harvest is one of the most widely watched in the world.

 

Corn imports increased in 2021 three times higher compared to the previous year, and purchasers stocked up on wheat and other grains from foreign countries to replace the more expensive local corn, driving up world prices.

 

Reuters spoke with a dozen merchants, brokers, and consultants who claimed they had not been able to undertake their normal crop inspection excursions to China's northeast grain region to check planting progress this year.

 

Week-long crop tours, which begin in China at the start of the growing season, give information for specialists to analyse the health of a crop and forecast the amount and quality of a harvest.

 

But as most of China is under lockdown as it seeks to stem the spread of COVID-19, travel is on hold, even for the dozens of experts located primarily in Beijing and the locked-down Shanghai.

 

An analyst at a consultancy that has cancelled this year's crop tours for corn planting and the wheat harvest, said there many things to consider such as COVID-19 tests every day, whether you will be permitted to exit the highway, what hotels you are allowed to stay in, and what routes you can travel. The analyst did not want to be identified because of the sensitivity around China's zero-COVID policy.

 

Though travel has been affected since the pandemic began in early 2020, the restrictions and lockdowns are now significantly more comprehensive and rigorous than they have been during the outbreak's early months.

 

A weeks-long lockdown in key grain-growing regions in the northeast delayed fertiliser deliveries in the spring, causing some farmers to miss planting deadlines.

 

According to China's state media, spring planting has been "smooth in general," with growers finishing 90% of spring corn and 50% of soybean planting this week, 1.8 percentage points quicker than last year.

 

Corn acreage is likely to shrink by 1.8% in the 2022/23 crop year as some farmers convert to soybeans, according to China's Ministry of Agriculture and Rural Affairs, however output will be higher than a year ago due to strong yields.

 

But government authorities have called for "huge efforts" to maintain consistent corn output even though the ministry assured the market that the season is off to a promising start.

 

City-bound traders and experts are frantically phoning farmers and feed manufacturers, as well as scanning through social media, to check on the status of planting.

 

A big trading firm source said the information is fragmented, and the data is erroneous.

 

In April, influential grains consultant Shanghai JC Intelligence Co predicted a 3% drop in corn acreage and a 1% drop in output.

 

Despite the fact that the company's tours have been cancelled, it has a vast pool of farmers it can call for information. Rosa Wang, an analyst with Shanghai JC Intelligence, said it is not perfect but it is close enough.

 

-      Reuters