China’s Role in World Bean Trade
March 30, 2009
Randy Duckworth, U.S. Dry Bean Council’s Director of Worldwide Activities, spoke to growers at Bean Day about China’s role in world bean markets.
He said pinning down China’s role in the world bean market is like ‘herding cats.’ “China is changing all the time. Its government policies change, the crops it grows change and just as the crop mix and weather is always changing so are the roles of its buyers and sellers,” he says.
Duckworth discussed China’s role as a supplier and how all of our markets are interconnected. With the complex role that China and other countries play, it’s virtually impossible to examine one country’s role without also looking closely at the broader world of suppliers and buyers beyond China.
“While we live in a flatter world in terms of barriers between buyers and sellers, it is not to say that trade is simple,” says Duckworth. “On the contrary, it is incredibly complex.” Countries have free trade agreements that effectively allow some countries to trade with each other while effectively barring others (NAFTA).
Geographic location of products and the cost of shipping serve to limit participation. And as producers saw last year, government activities such as the U.S. Farm Bill have the ability to create wholesale changes in the worldwide agricultural landscape. “Additionally, we have seen that food safety and security issues can play a major role in international trade. For example, in the past couple years we’ve seen that each time there is a food safety issue in China, the level of Japanese imports of Chinese bean paste drop temporarily – this despite fact that the food safety issues had nothing to do with Chinese beans,” says Duckworth.
China is the world’s largest producer and consumer of agricultural products with 1.3 billion people. They produce approximately 1.5 mmt of beans, mostly for export. It produces Japanese white, black, light speckled, red, navy, GN type, lima, adzuki as well as a variety of other beans.
While agricultural imports account for only about one-fifth of total commodity imports, Chinese demand for most agricultural commodities has been rising rapidly in recent years on the back of higher per-capita income, as well as rising protein and meat demands of the population. In fact, agricultural imports into China have more than doubled since 2000. The need for China to import agricultural commodities is likely to rise further in the future. China tends to import land-intensive commodities like grains, soybeans and cotton and exports labor-intensive commodities like fruits or vegetables.
China’s agricultural sector is facing growing problems, such as rapid urbanization, soil erosion and impending water shortages. Water is a big issue in China. The areas that are affected the most are the bean producing areas where they have serious water issues. The area of Ho Had has now had three failed bean crops in a row because of water shortages.
“If you would have talked to me a few years ago, I would have told you that China is an incredible threat to our industry. After having visited China and viewed some of my colleague’s reports, I am not convinced that they are the threat that I once thought they were,” says Duckworth. “We are seeing their agricultural landscape change quite dramatically.”
Duckworth is currently the Council’s Director of Worldwide Activities and representative for Central America and Caribbean regions.