UN report says Chinese demand will push up food prices to spur agricultural mergers and acquisitions

According to a report by the Financial Times on June 6, the United Nations Agricultural Organization recently released a report saying that China will rely more on imported grain, oilseeds and meat in the next decade, a trend that may raise prices and spawn more mergers and acquisitions in the global agricultural industry.

The Food and Agriculture Organization of the United Nations (FAO) and the Organization for Economic Cooperation and Development (OECD) jointly released the much-watched annual agricultural outlook report on the 6th. The report is more bullish on China's food needs and, for the first time, uses a full chapter to describe China.

It is expected that by 2022, China's imports of coarse grains (mainly used for livestock farming) will double, soybean imports will increase by 40%, meat imports will increase significantly, and beef imports will nearly double.

"The challenge is very clear: China's food supply is a difficult task under the constraints of rapid economic growth and limited resources. China's consumption growth will be slightly higher than its output growth," the report noted."

after entering the global agricultural market, China has begun to promote mergers and acquisitions in the agricultural industry. Last week, China's Shuanghui Group announced the acquisition of Smithfield (Smithfield), the largest U.S. pork manufacturer, for $7 billion. Meanwhile, commodity-trading houses such as Archer Daniels Midland (ArcherDanielsMidland) and Marubeni Commercial (Marubeni) spent $10 billion last year to acquire a number of grain traders in Australia and the United States serving the Chinese market.