
During the last few weeks our team from our office in Hong Kong has been travelling to the growing Areas of pumpkin kernels in order to be able to submit a first-hand report to us.
This year in the Northeastern part, the main growing area for shine skin and snow white kernels, the pumpkin farming will have to heavily compete against soy and corn. The Chinese government very generously subsidies the farmers so they produce the typical US import products in their own country. The enormous backlog of pumpkin kernels from previous crops – they are talking about 2015 crop kernels to be still in the market – in combination with the lower demand has caused the massive price decline during the last few years. These two factors are influencing the size of the acreage by reducing the shine skin farming by about 50 %.
In the outermost west the growing regions for GWS look similar.
In these parts of the country agricultural land is being cultivated under the control of the military. The direct government influence leads to a direct execution of the subsidy policy and replaces the pumpkin cultivation even more. This is aggravated by the fact that in this area of China severe sandstorms which are unusual for this time of year presumably destroyed agricultural land at the end of May/ beginning of June. The estimation of decreased acreage of GWS is far beyond 50%.
Another influencing factor: The Chinese central bank recently reduced the minimum reserves in order to give the regional banks a larger financial scope for granting credits. This decision of the central bankers considerably enables particularly smaller companies to get credits easier once again. Together with the current bailout policy these are direct effects of Trumps world politics.
We assume that the crop yield will be reduced considerably and that the easing of monetary policy will heat up the speculations with agricultural products. This should consolidate or increase the price for pumpkin kernels of the new crop. As we do not have any exact data at the moment of the still existing crop backlog, it is very difficult to make a statement concerning the expected price level.
We advise you to take advantage of the present low price level of the current crop in order to be safe and stocked up by the end of the year.
In case of any questions please do not hesitate to contact us!
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