In the wake of a moderate 5% annual growth target set by the Chinese government, commodity prices, from iron ore to copper, fell. The target, unveiled at the National People's Congress (NPC), was below what most economists expected, due to the fact that China missed the previous growth target by a rather wide margin.
The official documentation states that authorities aren't keen on any massive economic boost after the pandemic, and local government bond sales, which form the backbone of Chinese infrastructure development, were also modest.
The NPC stated that the government merely aims to stabilize the economy, and doesn't aim to issue a massive stimulus, which sent Iron ore prices dropping 3.2%, with shares of major iron ore mining firms falling by 1.1% (BHP Group), and 2.2% (Rio Tinto), and Copper fell 0.8%, with zinc, aluminum, Brent oil, and gold moving 1.4%, 0.3%, 0.6%, and 0.3% respectively, in the wake of overseas investors having a bullish outlook on commodities, due to a higher stimulus effort expected from the government. China has harvested 686.55 million tons of grain in 2022, with a grain harvest of greater than 650 million tons since 2015, according to Chinese state media.
The NPC did, however, deliver good news for the Chinese agricultural sector, with a proposed push to increase grain production capacity by 50 million tons annually, in an effort to ensure greater food security. This news comes in the wake of the 0.4% rise in soymeal prices, and a 0.1% decrease in corn prices.
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