Posted on September, 16, 2024 at 10:06 am
Warehouses across China are bulging with grain as a deepening economic crisis takes hold, leaving the world’s farmers to grapple with the prospect of a long-lasting slowdown gripping one of their largest customers.
“People are getting more pessimistic about the economy and demand,” said Ivy Li, a Shanghai-based commodity markets analyst at StoneX. “Importers will be very cautious, buying more slowly and doing more hand-to-mouth purchases. Impact from the collapse of confidence is all around.”
China’s slowdown and the pain in the country’s property market have battered consumer confidence, pushing money-conscious households to cut back on meat and forgo restaurants, curbing the amount of crops needed to feed a massive pig herd or to fry food.
Beijing has already taken steps to try to protect farmers, asking traders to limit overseas purchases of corn, barley and sorghum — an effort to ease oversupply exacerbated by a buying spree earlier in the year, when merchants snapped up cheap overseas cargoes. These eventually flowed to Chinese ports just as consumption softened. The nation has also moved to reduce the use of soymeal in animal feed.