A new vision for agriculture
momagri, movement for a world agricultural organization, is a think tank chaired by Christian Pèes.
It brings together, managers from the agricultural world and important people from external perspectives,
such as health, development, strategy and defense. Its objective is to promote regulation
of agricultural markets by creating new evaluation tools, such as economic models and indicators,
and by drawing up proposals for an agricultural and international food policy.
A look at the news

Chinese financial crisis: what impact on global agricultural markets?

September 14, 2015

China only has to sneeze and the world catches a cold... the continuous fall of the Chinese stock market, the devaluation of the Yuan and the slowdown in Chinese growth, make major Western financial centers tremble. So what are the consequences for global agricultural markets?

As we know, China is the main buyer of raw materials in the world and the prices of certain agricultural commodities are intrinsically linked to China’s economic turmoil. In 2012 China became the biggest importer of dairy produce and since, buys about 10% of world production.

The current turmoil felt by dairy markets from New Zealand to Europe are in part linked to the decline in Chinese demand which began well before “Black Monday”. Over the first five months of this year, says Jean-Marc Chaumet of the Livestock Institute (Idele), milk powder purchases (high and low fat) fell to 314,000 tonnes, less than half than the same period in 2014.

Yet, though the Chinese financial crisis has had an impact on world agricultural prices, it has only amplified a movement that has been in process for several months, which is more related to the overproduction found in several markets.

Finally, the link between Chinese growth and commodity prices is not based on the reality of Chinese demand but on a combination of endogenous and exogenous risks. Stakeholder psychology on financialized agricultural markets plays a role increasingly more important in price formation and evolution, helping to exacerbate the structural volatility of agricultural prices.

Agricultural markets have become complex, anticipatory financial markets for which adequate control mechanisms must be put in place, particularly to increase market transparency and to better regulate the activities of financial players.

Because if tomorrow China's financial crisis impacts the real economy, the liberalization of markets and the lack of control will once again have the side effect of contributing significantly to the crisis’s rapid spread around the world. So how then will we maintain our food security and agricultural equilibrium?

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Paris, 16 June 2019