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China Agricultural Newsletter - March 2012

The China Agricultural Update is provided by the Iowa Economic Development Authoritys (IEDA) office in China, which is operated by Phoenix Consulting LLC. Ms. Wendy Zhang, IEDAs trade specialist in the China office, can provide customized market research information for your company. For more information on how to utilize the services offered by IEDAs Beijing Office, please contact Ms. Victoria Nwasike at victoria.nwasike@iowa.gov.

Laws, Regulations and Policies

Import duties set to cut

China, the world's second-biggest importer, will cut import duties on selected energy products and raw materials as well as consumer goods to boost purchases, the State Council said in a statement on March 30.

Government set to establish food safety program

When customers throughout China buy food in the near future, they will be able to know immediately where it comes from, what company made it and even how it was produced. That's according to Sun Pishu, CEO of the Chinese informationtechnology company Inspur Group Co. Ltd. and a member of the Chinese People's Political Consultative Conference National Committee.

Campaigns started to ensure grain harvest

China's Ministry of Agriculture (MOA) has initiated three campaigns to ensure a successful grain harvest for the ninth consecutive year. The Ministry said on March 28 in a statement posted on its website that the first campaign aims at guaranteeing the harvest of summer crops. Farming areas around the country are urged to make special efforts in disease and pest control and natural disaster alleviation.

US$192b boost to agriculture production

China will continue its efforts to boost agricultural production by developing technology and investing in rural infrastructure, said Chinese Premier Wen Jiabao at the fifth session of the 11th National People's Congress on March 5.

New subsidies allocated to support spring farming

The Ministry of Finance (MOF) said on March 21 that it has earmarked RMB 24.3 billion yuan (US$3.86 billion) as subsidies for farmers to support the upcoming spring farming work.

Higher pork production aimed by 2015

The Chinese government has put together a five-year plan to increase meat production and also to modernize the meat industry. The country is aiming to produce 85 million tons of meat by 2015, which is 7 percent up from 2010. It also plans to restructure the industry and invest more in food safety, quality and meat processing plants.

Animal feed regulation mulled

China's Ministry of Agriculture on March 27 began to solicit public opinion on the draft management regulation on the quality and security of feed and feed additives.

More support to be given to leading agri-enterprises

China will improve its policies to foster and support leading enterprises in the agriculture sector in a bid to spur industrialization in the area, according to a document recently released by the State Council, China's Cabinet.

"Strictest control" over water resources to be imposed

China will impose the strictest control over water resources, according to a government work report released to the media ahead of the parliament's annual session.

Industry and Business Watch

Farm produce prices rise on reduced supplies

Prices of major farm produce monitored by the government rose for the week from March 12 to 18 as snowfall interrupted supplies, the Ministry of Commerce said on March 20.

Crop sees spike in price

The prices of agriculture produce in China have skyrocketed since the end of the Spring Festival, Economic Information reported on March 20.

 
The spot price of maize has quickened its rising pace since March, hitting a record high in central Liaoning where the procurement price of dried maize struck around RMB 2,330 yuan (US$368.5) per ton on March 19, up 10 to 30 units over its peak in 2011, according to figures published by Bric Global Agricultural Consultants, an information provider committed to conducting research and in-depth analysis in the Chinese agricultural sector.

Imports of US soybeans set for expansion

China, the world's largest consumer and importer of soybeans, is expected to step up purchases of the grain from the US to supply the domestic livestock industry as it expands to feed the growing urban population.China replaced Canada as the largest importer of US agricultural products in 2011. In 2010, 60 percent of all US soybean exports were destined for China, amounting to 25 percent of the US soybean crop.

Pig herd grows due to successful disease fighting

China’s pig herd is estimated not to drop at all as a result of a successful battle against diseases. Piglet production is said to hit record levels. While data on the animal diseases are tightly suppressed in China, sources have told the US Department of Agriculture (USDA) in Beijing that outbreaks were “about 60 percent” lower in the October-to-December quarter than a year before, the website Agrimoney.com reported recently.

COFCO steps up investment in pig breeding

China’s grain trading giant COFCO Group has stepped up its investment in pig-breeding, after Wuhan Iron & Steel announced its plan to invest heavily in pig farming too. COFCO said it plans to spend RMB 3.5 billion yuan (US$555.3 million) in a pig-breeding base in Sichuan's Guangyuan, which could hold more than 2 million pigs. COFCO has already set up four major livestock and poultry breeding bases in Shandong, Tianjin, Jiangsu and Hubei.

Shuanghui Group plans major increase in pork production

Chairman Wan Long of Shuanghui Group, the largest hog processor in China, will increase pork production volume by 50percent this year, Bloomberg reports. The firm has said that it will invest RMB 6 billion yuan this year to build new projects in cities which include Harbin, Changchun, Shenyang, Nanning and Kunmin.

Steelmaker invests in pig farm

Deng Qilin, a deputy at the National People's Congress and General Manager of Wuhan Iron & Steel (Group) Corp., a leading Chinese steelmaker, revealed that the company's latest goal is to build a farm that can hold 10,000 pigs.

Brasil Foods exports first shipment of pork to China

On March 1, Brasil Foods (BRF) is sending its first pork shipment to China. The meat will be sold through the partnership with Hong Kong group Dah Chong Hong Ltd. (DCH). The group will distribute products in China and will also process meat in local units.

Beef production forecast at 5.5M tons

China’s 2012 forecast for beef production is 5.5 million metric tons (MMT), carcass weight equivalent (CWE), an increase of 24,000 MT from the initial estimate.

http://news.xinhuanet.com/english/business/2012-03/22/c_131482299.htm

Chinese major dairy producers have reported large profit increases for 2011, thanks to strengthened regulation last year by authorities, even though a series of food safety scandals marred the reputation of the industry during the year.

Problems in corn seed industry

Statistics from the Ministry of Agriculture show that China has more than 8,700 seed companies. Only about 200 have registered capital of more than RMB 30 million yuan, and just 100 have the capability to undertake research.

National agri-tech service network formed

China has formed a nationwide web to provide agricultural science and technology services in rural areas, according to a meeting of the China Rural Special Technique Association (CRSTA), which opened on March 25.

Largest sugar base under construction

South China's Guangxi Zhuang Autonomous Region is working with a Thai company to build China's largest sugar manufacturing and food processing base, according to local authorities.

Imported wine market grows rapidly in China

China imported a record US$1.27 billion of bottled wine in 2011, up 94 percent year-on-year, according to figures released on March 27 at the first China Worldwide Wine Summit Forum.

McDonald's launches food safety checks at all outlets

A McDonald's restaurant in Beijing was closed for business on March 16 and its other outlets across the country put under strict scrutiny for food safety loopholes as ordered by China's food watchdog after state TV exposed dirty tricks at the Beijing outlet.

Nod for PepsiCo's stake deal

PepsiCo Inc. has received regulatory approval on March 29 from China's Ministry of Commerce for its plan to swap its bottling operations in China for a stake in Tingyi (Cayman Islands) Holding Corp.'s beverage business.

Coca-Cola opens largest production facility in China

An opening ceremony was held in Liaoning Province on March 29 to inaugurate global beverage leader Coca-Cola's new bottling plant, its 42nd and largest production facility in China.

Statistics

Average food prices in 50 cities March 11-20, 2012

Item
Specification/Unit
Current price (RMB)
Percentage changes as compared to last period
(%, March 1-10, 2012)
Rice
Japonica rice / kg
5.38
0.2
Flour
Strong flour / kg
5.07
0.0
Flour
Standard wheat / kg
4.01
0.3
Soy products
Bean curd / kg
3.95
0.5
Peanut oil
5 Lin barrel bulk / litre
24.79
-0.1
Soyabean oil
5 Lin barrel bulk / litre
12.22
0.2
Rape seed oil
Grade 1 in bulk / kg
12.70
0.2
Pork
Rump / kg
27.22
-1.8
Pork
Belly meat / kg
26.94
-1.7
Beef
Leg / kg
46.22
0.3
Mutton
Leg / kg
53.42
0.3
Chicken
Frozen fresh chicken / kg
18.86
0.5
Chicken
Breast / kg
21.22
0.0
Ducks
Frozen fresh duck / kg
16.92
0.2
Eggs
Fresh eggs in bulk / kg
8.24
2.0
Source: China National Bureau of Statistics

Major meat retail price March 2012

Pork (Lean):

                                                                                                  RMB1.00 yuan/kg

Average Sales Price (Street markets & Supermarkets)
Var. Percent
A.       3/11/12-3/20/12
B.       3/01/12-3/10/12
C.       2/11/12-2/20/12
D.       3/11/11-3/20/11
(A-B)/B
(A-C)/C
(A-D)/D
31.14
31.58
32.42
26.94
-1.39%
-3.95%
15.59%

 
Egg:
                                                                      RMB1.00 yuan/kg

Average Sales Price (Street markets & Supermarkets)
Var. Percent
E.        3/11/12-3/20/12
F.        3/01/12-3/10/12
G.       2/11/12-2/20/12
H.       3/11/11-3/20/11
(E-F)/F
(E-G)/G
(E-H)/H
8.20
8.08
8.56
9.06
1.49%
-4.21%
-9.49%

 
Chicken:       
                                                                                                   RMB1.00 yuan/kg

Average Sales Price (Street markets & Supermarkets)
Var. Percent
I.         3/11/12-3/20/12
J.         3/01/12-3/10/12
K.       2/11/12-2/20/12
L.        3/11/11-3/20/11
(I-J)/J
(I-K)/K
(I-L)/L
17.92
17.88
18.08
17.12
0.22%
-0.88%
4.67%

 
Source: China Animal Agriculture Association
 
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