Between April 4 and 6 people in China (and neighbouring states) will be on holiday, celebrating the annual Qingming festival.
Known in English as ’Tomb Sweeping’ days, millions of people will go out, clean their ancestors’ graves, offer food dishes to the deceased, and so on.
It’s also seen as the start of spring
Why do we choose to highlight the start of tomb sweeping?
As we all scrabble to find promising glimmers, the tomb sweeping holiday is one of the best indicators there is. Hundreds of millions of Chinese will find it unbearable not to pay their respects to their ancestors - any idea of ’social containment’ of Covid-19 in China will fly out the window.
But also - perhaps coincidentally - officials of China’s National Development and Reform Commission (NDRC), which assembles some of the finest forecasting and planning minds in China, have now said that China’s economy will return to normal in the second quarter of 2020.
The NDRC says it has plenty of policy tools to deal with the macroeconomic consequences of the Covid-19 panic.
No doubt the decision today by the Shanghai Futures Exchange to suspend (until January 8 2021) transaction fees on commodity product deliveries is one such tool.
Dynamic situation moving at great speed
As China prepares to return to normal, key agri-products are left wondering what that ’normal’ might be.
Could it be the 2018 pre-trade war with the US ’normal’, when China imported (for example) soybeans valued at more than $38bn?
Soymeal futures on (China’s) Dalian Commodity Exchange rallied by as much as 3% on Monday.
Typically at this time of year China buys many more Brazilian than US soybeans, but Brazilian cargoes have been delayed by intense rainfall.
With low soybean stocks in its ports - put at less than 4m tonnes - China may well be tempted to buy higher priced US soybeans, especially given that it is pledged to stick to its side of the trade ’peace’ with the US, and not be diverted by Covid-19.
One thing seems clear - China is fast returning to a ’normal’, as the West seems intent on shutting down.