Reuters has reported that trading firms in China, all affiliated to the Central Government have been instructed to increase purchases of corn, soybeans, cotton, vegetable oils and meat. The justification relates to the possibility of a second wave of COVID-19 infection in China resulting in lockdowns and disruption of food imports. There is concern that the export potential of Brazil, a major supplier of meat and soybeans and Argentina that supplies both soybeans and corn will be impacted as the incidence rate of COVID-19 climbs alarmingly in Latin America. China may also be concerned over the disruption in pork and beef packing in the U.S. China should have a close insight into the packing of pork through ownership by the WH Group of Smithfield Foods.
The economy of China is slowing emerging from the COVID-19 restrictions imposed during the first quarter of 2020. The lockdown caused serious slowing of both imports and exports with many factories still operating at less than capacity. The recent meeting of the rubber-stamp National Assembly legislative body learned that the Central Committee is not declaring an economic growth target for 2020. This is a profound departure from tradition.