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China Agricultural Newsletter - April 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 Mr. Joseph Rude at joseph.rude@iowa.gov.

Laws, Regulations and Policies

Yuan's trading band against USD widened

The People's Bank of China, the country's central bank, announced on April 14 it will widen the yuan's daily trading limit against the US dollar to one percent from Monday.In the foreign exchange spot market, Chinese banks can exchange the yuan one percent above or below the central parity against the US dollar announced by the China Foreign Exchange Trading System each trading day. Previously, the daily trading limit was set at 0.5 percent.

Amendment to agri-technology promotion law mulled

Chinese lawmakers on April 24 read for the first time a draft amendment to the agricultural technology promotion law, which will stipulate more efforts to promote technology use in the country's agricultural industry.

HK, Macao grain traders encouraged on mainland

China's Ministry of Commerce said on April 26 it has allowed trial operation of wholly Hong Kong-owned and Macao-owned grain traders in south China's Guangdong province.The move is aimed at boosting economic ties between Hong Kong, Macao and the mainland, and encouraging businesses from the two regions to set up merchandizing enterprises on the mainland, according to a statement issued by the Ministry.

More frozen pork purchases on the horizon

China has stated that it will buy more frozen pork in order to hike up prices. Currently live hogs are selling too cheaply and pig farmers are not raking in the profits. Ministry of Commerce confirmed that retail prices of pork plummeted for 11 weeks in a row as of the end of April 15.

RMB 600 billion invested in farmland improvement

China's government will invest around RMB 600 billion (US$95 billion) between 2011 and 2015 in turning the nation's scattered and dilapidated rural lands into efficient farming areas, under Ministry of Land and Resources plans unveiled on April 24.

RMB 4 trillion in water resources to be invested by 2020

Minister of Water Resources Chen Lei said on April 25 that the country's investment in water resources will reach RMB 4 trillion (US$634.8 billion) by 2020.Chen made the remark while delivering a report on the construction of irrigation and water conservation infrastructure at the bimonthly session of the Standing Committee of the National People's Congress on behalf of the State Council.

Industry and Business Watch

Rising food prices cause March inflation rebound

The rate of inflation rebounded more than expected in March due to higher food costs, making it harder for the government to adopt any stimulus measures needed to forestall a hard landing in the world's second-largest economy.

Slowing farm produce price growth expected

China's farm produce prices are likely to fall back to 10-percent growth this year as supplies of most agricultural products are becoming more plentiful, a think tank forecast on April 18.

Grain output likely to grow for ninth year

The Chinese Academy of Social Sciences (CASS), a prominent Chinese think tank, on April 18 issued a forecast saying China's grain output is likely to grow for the ninth consecutive year in 2012. CASS made the prediction based on continued increases in grain prices in recent years and the government's enhanced efforts to offer farmers subsidies for raising grain crops.

Soybean imports to maintain an upward trend

Soybean imports by China are expected to maintain an uptrend in the next 10 to 15 years with growth being driven primarily by the demand from urban residents, reports China Daily.

High-yield corn breed prospers

A domestically developed breed of corn has been utilized on an increasing number of Chinese farms, allowing farmers to reap social and economic benefits, the corn's developer said.

Biological breeding capacity building and industrialization project being implemented

The China National Development and Reform Commission, Ministry of Finance and Ministry of Agriculture have been jointly implementing the Biological Breeding Capacity Building and Industrialization Project since 2012. This is part of the 12th Five-Year Plan for National Economic and Social Development, Decisions of the State Council Concerning Speeding up Modern Crop Seed Industry Development.

 

Pork imports to increase on strong demand

Pork imports have already hit the nadir and there seems to be no letup in demand, considering that domestic supplies are likely to remain constrained for some time.

Mexican pork let in

China’s government on April 6 gave five Mexican companies permission to export pork to China, releasing the initial list on the occasion of Mexican Foreign Secretary Patricia Espinosa’s visit to Beijing.

Anpario acquires Meriden to expand into Chinas pig markets

Anpario, the agriculture additives business, formerly known as Kiotech International, has acquired Meriden Animal Health, suppliers of natural animal feed additives, for €4.94 million. The acquisition increases Anpario’s presence in the Chinese market, the world’s biggest producer of pig and poultry meat.

Brazilian meatpacker Marfrig announces investments in China

Brazilian meatpacker Marfrig announced it will invest heavily in distribution centers in China. The announcements were made in Beijing where a delegation headed by Brazilian President Dilma Rousseff was on an official visit to China.

Australias CRC CARE helps China solve pig problem

Working with Chinese scientists and technology firm HLM Asia Ltd., Australia’s CRC for Contamination Assessment and Remediation of the Environment (CRC CARE) has helped develop novel digester technology to help deal with the estimated 1.4 million tons of manure and 7 million tons of urine produced by the burgeoning Chinese pork industry annually.

China learns dairy food safety from US

The International Dairy Food Association (IDFA) recently hosted a delegation from China’s Ministry of Industry and Information Technology, a federal government organization responsible for several domestic regulations. This Ministry, along with other Chinese agencies, is helping to develop and enhance food safety regulations in China. More than 25 delegates came to learn about US food safety programs, regulatory systems and best practices to help guide their regulatory efforts.

The development ofsecond generation GM cotton

Researchers from the Cotton Research Institute, Chinese Academy of Agricultural Sciences (CAAS) announced in a news conference on March 18 that they have successfully developed GM cotton which has high quality fiber and develops big bolls. Dr. Li Jiayang, Vice Minister of Agriculture and President of CAAS lauded the research achievement. Li pointed out that insect pests and low quality fiber have been blocking the development of the Chinese cotton industry for a long time. These new germplasm materials mark a breakthrough in the second generation GM cotton research in China.

Opportunities provided for animal health sector

In recent years, multinational pharmaceutical enterprises have begun to realize that China provides great opportunities in the animal health sector, where the emergence of new diseases in the pig industry, new government policies to improve food safety and the overall development of the pig industry point towards future growth.

Shanghai Pengxin to purchase New Zealand farms

Chinese property developer Shanghai Pengxin Group Co. has won approval to buy 16 dairy farms in New Zealand.The approval comes on condition Pengxin invests NZ$16 million (US$13 million) in the farms, protects and enhances heritage sites and establishes an on-farm training facility, according to the New Zealand regulator's decision.

China becomes biggest grocery market

China has overtaken the United States as the world’s biggest food and grocery retail market, according to the latest research published on April 4 by IGD. According to the findings, the Chinese grocery sector was worth £607 billion at the end of 2011, while the US market came in at £572 billion over the same period – the second largest in the world.

China, US to resume investment talks

China and the US will kick off the seventh round of talks on the bilateral investment treaty (BIT) very soon, Vice Minister of Finance Zhu Guangyao told a press briefing on April 28. “The two countries will announce the resumption of the negotiations of BIT at the technical-level in the upcoming fourth round of China-US Strategic and Economic Dialogue (SED),” Zhu said, adding the two countries attach great importance to the resumption of the negotiations.

Statistics

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

Item
Specification/Unit
Current price (RMB)
Percentage changes as compared to last period
(%, April 1-10, 2012)
Rice
Japonica rice / kg
5.41
0.0
Flour
Strong flour / kg
5.07
0.2
Flour
Standard wheat / kg
4.00
0.0
Soy products
Bean curd / kg
4.00
0.0
Peanut oil
5 Lin barrel bulk / litre
25.25
1.6
Soyabean oil
5 Lin barrel bulk / litre
12.29
0.6
Rape seed oil
Grade 1 in bulk / kg
12.88
0.9
Pork
Rump / kg
25.51
-2.0
Pork
Belly meat / kg
25.34
-2.1
Beef
Leg / kg
46.73
0.5
Mutton
Leg / kg
53.15
0.0
Chicken
Frozen fresh chicken / kg
18.80
-0.3
Chicken
Breast / kg
21.10
-0.4
Ducks
Frozen fresh duck / kg
17.03
0.1
Eggs
Fresh eggs in bulk / kg
8.07
-1.7
Source: China National Bureau of Statistics

Major meat retail price April 2012

           Pork (Lean):

                                                                                                                                RMB1.00 yuan/kg

Average Sales Price (Street markets & Supermarkets)
Var. Percent
A.       4/11/12-4/20/12
B.       4/01/12-4/10/12
C.       3/11/12-3/20/12
D.       4/11/11-4/20/11
(A-B)/B
(A-C)/C
(A-D)/D
29.52
30.06
31.14
26.86
-1.80%
-5.20%
9.90%

 
Egg:
                                                                                                                             RMB1.00 yuan/kg

Average Sales Price (Street markets & Supermarkets)
Var. Percent
E.        4/11/12-4/20/12
F.        4/01/12-4/10/12
G.       3/11/12-3/20/12
H.       4/11/11-4/20/11
(E-F)/F
(E-G)/G
(E-H)/H
8.14
8.24
8.20
8.88
-1.21%
-0.73%
-8.33%

 
Chicken:       
                                                                                                                              RMB1.00 yuan/kg

Average Sales Price (Street markets & Supermarkets)
Var. Percent
I.         4/11/12-4/20/12
J.         4/01/12-4/10/12
K.       3/11/12-3/20/12
L.        4/11/11-4/20/11
(I-J)/J
(I-K)/K
(I-L)/L
17.96
17.94
17.92
17.26
0.11%
0.22%
4.06%

 
Source: China Animal Agriculture Association
 
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