China China China - DEMAND PROBLEMS

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China's Soybean Demand Decline: 🇨🇳🌱 China's soybean imports are expected to decline by 20% in the first quarter of this year, totaling about 18.5 million tons. This reduction in demand is primarily driven by a decrease in hog numbers due to factors such as poor prices, high input costs, and outbreaks of African swine fever. At least half of these imports are expected to come from the United States. China imported a record 99.4 million metric tons of soybeans in 2023, marking an 11% increase from the previous year. The decrease in soybean demand has been influenced by increased soybean inventories.

China's Population Decline: 🇨🇳👶 China's population is on a downward trend, with around 9 million births recorded last year, which is over half a million fewer than the previous year. The total population in China decreased by 2.08 million in 2023, more than double the decline seen in 2022. Various measures, including matchmaking and cash incentives, have been employed by local governments to encourage more births, but economic uncertainty has been a significant factor contributing to the declining birth rate. In 2023, China's GDP increased by 5.2%, slightly slower than the pre-pandemic levels of over 6%.

Challenges in China's Economy: 📉🇨🇳 China's economy faced challenges in the fourth quarter of 2023, with GDP growth at 5.2%, slightly below expectations of 5.3%. For the full year, GDP increased by 5.2%, a rise from 3% in 2022 but still relatively low. The property sector saw a significant decline in investment, down by 9.6% in 2023. China's unemployment rate among people aged 16 to 24 improved to 14.9% in December, compared to 21.3% in June, the last reported figures. To maintain economic stability and growth, China may need to consider implementing substantial stimulus measures, as GDP growth is forecasted to slow to 4.6% this year.

Challenges in Mato Grosso's Soybean Yields: 🌱🇧🇷 Mato Grosso, a key soybean-producing region in Brazil, is facing challenges in its soybean yields, which are projected to be 15% below the 15-year historical trend. This decline in yields is significant and has not been seen since 2016 when yields fell 13% below trend. As a result, EarthDaily Agro forecasts Brazil's soybean crop at 149.2 million tons, notably lower than projections from Conab (155 million tons) and the USDA (157 million tons).

Strong US Retail Sales: 🛍️📊 US retail sales showed strength in December, growing by 0.6%, surpassing economists' expectations of a 0.4% increase. This growth follows a 0.3% gain in November. Excluding auto and gas sales, retail sales increased by 4.9% over the course of 2023. The robust performance of retail sales reflects a healthy economy, and experts believe that the economy is strong enough that a reduction in interest rates is not necessary to sustain it.

These developments highlight various economic and agricultural dynamics, from shifts in demand for soybeans in China to demographic trends and economic challenges in both China and Brazil, as well as the resilience of the US retail sector. 🌍📈🌽