Sinowei News and Events
This year, the coronavirus pandemic will continue to affect all areas of the economy. Several factors will have a significant impact on the agricultural sector, and grain in particular.
Due to the market’s saturation with money, the increased demand for goods and commodities and rather high prices for grain and oilseeds will remain. Further population growth will support this trend, particularly in Southeast Asia.
There is a sharp increase in rates for different directions by two to five, or even ten times on the market of sea container transportation in communication with China. A number of operators stopped accepting orders for shipments. This new factor is superimposed on the pre-New Year’s demand increase and the pandemic.
At the 3rd CIIE held in Shanghai on November 5-10, COFCO Group, China’s largest food producer and grain trader signed more than $ 10 billion worth purchase contracts.
According to USDA estimates, in 2020/21 MY, China could import 100 million tons of soybeans which is 1.5% more than in the previous season and is a record import. Traditionally, the key suppliers of soybeans to China are Brazil, the USA and Argentina.
According to USDA, China’s corn imports in the 2020/21 marketing year are estimated at 22 million tons, well above the USDA official forecast of 7 million tons. The rise in corn imports is related to depleted stocks and high domestic prices.
The US presidential election is coming this week. If Biden wins, the more active international trade and fewer trade wars are expected which could lead to a more efficient distribution of produced goods and resources and, possibly, a softer confrontation between Washington and Beijing.
Unlike the financial crisis of 2008/2009, when a deep decline in demand (and, accordingly, prices) was observed for all commodities, the impact of the COVID-19 pandemic on the commodity market was different.
Countries began to massively purchase food for the second wave of COVID. Several countries have started purchasing food products. According to Bloomberg, this is being done on fears that the second wave of the coronavirus pandemic could cause global damage to world trade.
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