Could China Really Save The World?
Could This Be The Start Of Something Big? Or just another false dawn? It's an interesting one to call, but could China really save the world? They certainly appear to be giving it their best shot.
Their government's 4 trillion yuan ($586 billion) stimulus package is sparking signs of the green (bamboo) shoots of recovery in the world's third largest economy. China’s retail sales rose a surprise 14.8 percent in April from a year earlier, data out today reveals.
As well as re-building the country's entire infrastructure including bridges, roads, railways, oil pipelines, irrigation networks etc, they also plan to build up domestic soybean and corn reserves reserves.
By buying 7.5 MMT of soybeans (which incidentally is almost half of their entire national production) off local farmers, they are pumping cash into the rural economy. That leaves a lot less soybeans to go round for the domestic crushers who are busy importing beans like there is no tomorrow.
China will import 37.5 MMT of soybeans in 2008/09 (up from the 36 MMT estimated in April), rising to 38.1 MMT in 2009/10 the USDA said yesterday. In April alone they imported 3.71 MMT, and May in imports could reach an all-time record 4.2-4.6 MMT according to one local analyst.
And much of that volume is coming from the US, sales since Sept 1st to China are up 41% the USDA said yesterday.
Meanwhile global production is falling, down to 212.8 MMT say the USDA, from the 218.8 MMT forecast a month ago and the 221.1 MMT harvested last year, largely due to reduced output from Brazil and Argentina.
Argentine will produce just 34 MMT this year according to the USDA, and even that estimate may prove optimistic when all of the crop is finally harvested with some private estimates in the region of 31-33 MMT. A far cry from early season hopes of a 50 MMT record crop.
And in addition of course there are political problems aplenty in Argentina, with farmer strikes and blockades an ever present threat. That leaves Brazil and the US as very much preferred suppliers.
Consequently the USDA yesterday dropped their US old crop ending stocks estimate to 130m bushels from 165m last month, the tightest ending stocks since 2003. More importantly than that stocks to usage is 4.3%, that is the tightest since 1968.
I'd like to buy some soybeans please Mr US Shopkeeper. Certainly Sir....
Their government's 4 trillion yuan ($586 billion) stimulus package is sparking signs of the green (bamboo) shoots of recovery in the world's third largest economy. China’s retail sales rose a surprise 14.8 percent in April from a year earlier, data out today reveals.
As well as re-building the country's entire infrastructure including bridges, roads, railways, oil pipelines, irrigation networks etc, they also plan to build up domestic soybean and corn reserves reserves.
By buying 7.5 MMT of soybeans (which incidentally is almost half of their entire national production) off local farmers, they are pumping cash into the rural economy. That leaves a lot less soybeans to go round for the domestic crushers who are busy importing beans like there is no tomorrow.
China will import 37.5 MMT of soybeans in 2008/09 (up from the 36 MMT estimated in April), rising to 38.1 MMT in 2009/10 the USDA said yesterday. In April alone they imported 3.71 MMT, and May in imports could reach an all-time record 4.2-4.6 MMT according to one local analyst.
And much of that volume is coming from the US, sales since Sept 1st to China are up 41% the USDA said yesterday.
Meanwhile global production is falling, down to 212.8 MMT say the USDA, from the 218.8 MMT forecast a month ago and the 221.1 MMT harvested last year, largely due to reduced output from Brazil and Argentina.
Argentine will produce just 34 MMT this year according to the USDA, and even that estimate may prove optimistic when all of the crop is finally harvested with some private estimates in the region of 31-33 MMT. A far cry from early season hopes of a 50 MMT record crop.
And in addition of course there are political problems aplenty in Argentina, with farmer strikes and blockades an ever present threat. That leaves Brazil and the US as very much preferred suppliers.
Consequently the USDA yesterday dropped their US old crop ending stocks estimate to 130m bushels from 165m last month, the tightest ending stocks since 2003. More importantly than that stocks to usage is 4.3%, that is the tightest since 1968.
I'd like to buy some soybeans please Mr US Shopkeeper. Certainly Sir....