Exporting industrial products and exchanging agricultural products has become the core model of foreign trade transactions between China and many countries.
As the world's most powerful manufacturing country, China has all the industrial categories in the United Nations industrial classification. Looking at the world, there is only China. The comprehensiveness, diversity, completeness of the industrial chain, manufacturing efficiency and other aspects of China's manufacturing industry are unique in the world. Shipbuilding, automobiles, home appliances, communication equipment and other fields are ranked first in the world all year round.
Although the Chinese market is large, it cannot meet the unlimited huge production capacity. Going to overseas markets is an inevitable path for China's manufacturing industry to further strengthen and upgrade. Therefore, in recent years, China's industrial production capacity has been going overseas.
The emphasis of commercial circulation is to have both return and return, and both outflow and inflow. Long-term unequal trade relations are not healthy, and will cause countermeasures from deficit countries, and even drain the wealth of deficit countries. Therefore, while exporting industrial products to the world, China also needs to import more goods from overseas countries.
Therefore, in addition to the minerals and crude oil needed by various industries, many countries mainly export agricultural products when trading with China, such as durian in Southeast Asian countries, cherries in Chile, beef in Brazil, king crabs in Russia, dates in Arab countries, etc.
Especially for those countries that have neither minerals nor oil, and lack manufacturing capabilities, agricultural products are almost their only bargaining chip in international trade.
Benefiting from the import of a large number of agricultural products, consumers have more choices, and the prices of products such as durian, beef, cherries, avocados, and blueberries are getting lower and lower, but the other side of the coin is that domestic peers are facing fierce competition, and business operations are affected. A typical example is that since this year, domestic beef has been affected by imported beef, and prices have continued to decline. The beef and dairy farming industries have suffered large-scale losses, and industrial development is facing severe challenges.
Import surge
More global agricultural products are entering China.
In recent years, the import volume of many agricultural products in China has shown a surge. Previously, the "high and mighty" cherries, durian, beef, king crabs, etc. have gradually become more accessible to the people.
Compared with pork and chicken, beef and mutton are high-priced products, not high-frequency consumer goods. Many families only buy them during festivals. However, since this year, the price of beef and mutton has been falling. The recent price of beef has fallen to 68.43 yuan/kg, while it was close to 90 yuan per kilogram two years ago. The wholesale price of Beijing Xinfadi can be as low as 48 yuan/kg.
This is closely related to the continuous increase in the import volume of beef. In 2013, China imported only 290,000 tons of beef, but last year it rose to 2.737 million tons, an increase of more than eight times in ten years. Moreover, even with the addition of freight and taxes, the price of imported beef is basically 1/3 to 1/2 of the domestic market, and the average import price in 2023 is still lower than the previous year.
On the other hand, China's beef production also reached a historical peak last year. Coupled with the impact of imports and consumption downgrades, beef cattle farmers suffered large-scale losses under the triple blow. Listed companies including Australia Asia Group and Pengdu Agriculture and Animal Husbandry have fallen into a quagmire of losses because they cannot sell beef at a high price.
The same logic is repeated in cherries, sugar and other commodities. Since the beginning of this year, the price reduction of high-end fruits has become a hot topic. The Spring Festival is the peak season for cherry sales, but due to the large-scale import of cherries from Chile and other countries, this high-priced fruit has become much cheaper.
At the beginning of the year, a cargo ship carrying 2,500 tons of cherries departed from the Port of San Antonio, Chile, and arrived at the Tianjin Dongjiang Comprehensive Bonded Zone in just 23 days. After arriving at the port, it took only 45 minutes to complete the unloading and loading. The trucks that had been waiting for a long time were transported to northern regions such as Beijing, Tianjin and Hebei overnight.
Compared with the previous shipment to Guangdong and Shanghai and then transferred to the north, the transportation time was shortened by more than three days. With various green channels, the freight from Tianjin Port to Beijing Xinfadi has saved 80%. Xinfadi is stationed with more than 1,000 express delivery, which can basically deliver to the entire city in one hour.
The large supply of Chilean cherries, coupled with the reduction of logistics costs by changing from air to sea transportation, has caused its price to continue to fall. Last year, Chilean cherries could be sold for up to 200 yuan per pound, but this year during the Spring Festival, they were only sold for more than 40 yuan per pound, a drop of 80%. This type of imported fruit, which was previously out of reach, can actually fly into the homes of ordinary people.
White sugar is no exception. Although Chinese residents do not eat as much sugar as European and American residents, as a strategic material, China has always needed to import a large amount of sugar. China produces about 10 million tons of white sugar annually, but because white sugar plays an important role in food, beverages, industry, pharmaceuticals, chemicals and other fields, the consumption is as high as 15 million tons. The demand gap is huge, and imported white sugar is popular.
Brazil ranks first in the world in white sugar production, with few impurities, high sweetness and good quality, dominating the world's white sugar price trend. Brazil is China's largest importer of sugar. In 2023, China imported a total of 3.97 million tons of sugar, of which 3.27 million tons came from Brazil, accounting for 82.37%, with a value of about 13.7 billion yuan.
In the first half of 2023, the price of Brazilian white sugar was in the range of 4,000-5,000 yuan per ton, but by the end of the year, with the sharp increase in white sugar production, the international white sugar price once fell below 4,000 yuan/ton. However, in Guangxi, China's core white sugar production base, the cost of sugarcane alone for sugar mills is close to 5,000 yuan/ton, plus the costs of labor, water and electricity, a total of about 5,800-6,000 yuan/ton.
The large-scale import of white sugar has had a significant impact on domestic sugar mills. Guangnong Sugar has been losing money after deducting non-operating expenses for 12 consecutive years. It admitted in its interim report that imported sugar in the second half of the year will further put pressure on sugar prices.
It can be seen that the huge import of low-priced agricultural products will inevitably have an impact on related domestic industries.
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