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China Agricultural Newsletter - January 2012

The China Agricultural Update is provided by the Iowa Economic Development Authority's (IEDA) office in China, which is operated by Phoenix Consulting LLC. Ms. Wendy Zhang, IEDA's 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 IEDA's Beijing Office, please contact Kathy Hill at 515.725.3141 or kathy.hill@iowa.gov.

Laws, Regulations and Policies

MOA issues 12th Five-Year Plan (2011- 2015) on agricultural science and technology

The Chinese Ministry of Agriculture issued the 12th Five-year Plan (2011-2015) on agricultural science and technology. The plan serves as the guideline for the country\'s agricultural development in the next five years based on new demands and opportunities. Development targets and financial and legal commitments are also identified.

 
The key targets of the plan include the following: transformation of scientific research into high capacity; innovation of agricultural science and technology management system; and improvement in the contribution of agricultural science and technology progress.
 
The key tasks will be to emphasize science and technology innovation, strengthen the modern agriculture technology system (e.g. GMO New Variety Development Mega Project); and promote innovation of science and technology in the seed industry. In terms of breeding, China plans to discover a series of genes to develop a batch of elite varieties with high yields, better quality, multi-resistance, and wide adaptability.
 

Central grain reserves turn into market stabilizer

In 2011, the China Grain Reserves Corporation actively complied with the orientation of China\'s macroeconomic control to purchase and sell grains in batches.

Trans-provincial grain passageway to be built within 5 years

China is to establish a major trans-provincial infrastructure within five years to transport grain products from the country\'s north to the southaccording to a newly released plan for the country\'s grain sector.

Crackdown on fake goods launched in rural areas

Chinese authorities said on January 20th that the country will intensify its efforts to crack down on fake and shoddy goods in rural markets during the first quarter of this year.

Food safety campaign slashes dairy numbers

The "tough battle" to clean up the food sector saw the closure of more than 40 percent of the mainland\'s dairies, Zhi Shuping, head of the country\'s top quality watchdog, said on January 6th.

Meat safety boosted for Spring Festival

The government will redouble its efforts to weed out illegal meat processing in the coming months, especially during the Spring Festival, in the interest of food safety, officials said on January 13th.

Industry and Business Watch

Agricultural sector faces low profit margins

The main risks of investing in China\'s agricultural sector include low profit margins, high dependence on natural factors, and unclear policies involving factors of production, according to a report.

Farm produce prices rise for 8th straight week

Farm produce prices rose for an eighth consecutive week in January, while the prices of producer goods remained unchanged, the Ministry of Commerce said on January 17th.

Corn imports, consumption to drop in 2012

China may curb its imports of corn for industrial use as consumption is expected to grow at the slowest pace in at least five years, according to reports.

Food safety suffers feeble foundation

Despite achievements made in 2011, China will continue to have a hard time ensuring food safety for a quite long time, said Zhang Yong, director of the executive office of the food safety commission under the State Council, the Cabinet.

Hog Markets in January 2012

Looking at the size of the breakdown of the inventory for November 2011-breeding stock was around 49.05 million and total on farm inventory was around 476.25 million, writes Ron Lane, senior consultant for Genesus China.

Wens aims for 13.6 million pigs by 2014

China pig producer Wens Group has set a target pig output of 13.6 million head by 2014, according to Lan Tian, general manager, who spoke at a summit meeting on December 23, 2011.

German pork giant Tönnies planning to enter Chinese market

German pork and meat giant Tönnies is planning to enter the Chinese market and thus grow substantially. This was revealed by Clemens Tönnies, CEO in the German newspaper Wirtschaftswoche.

Mainland suspends supplies of live poultry to Hong Kong

On December 22nd, China\'s quality watchdog said that it had decided to suspend supplies of live poultry to Hong Kong after a dead chicken there tested positive for the highly pathogenic H5N1 virus.

Dairy makers to hike milk price

China\'s three biggest dairy companies including Sanyuan, Yili and Mengniu brands will raise the prices of some dairy products, the Beijing News reports.

Nestle develops its largest milk district in China

Nestle is to invest in developing its largest milk district in China. This will help the country deliver high quality and fresh milk. Mr. Mao Chen, Mayor of Shuangcheng, and Mr Zhan Yudong, Director of Production Technology of Nestle in Greater China Region, signed a Memorandum of Understanding on behalf of the two sides.

Fertilizer supplies boosted in preparation for springtime farming

Chinese authorities on January 18th ordered an "abundant supply of fertilizer" to meet demand during the upcoming spring farming season.

President Enterprises to build a new factory in Jiangsu Province

Taiwan\'s leading food manufacturing company, the President Enterprises Corporation, will spend 100 million U.S. dollars to build a new factory in east China\'s Jiangsu province, local authorities said.

Shareholders in Little Sheep approve Yum! takeover proposal

Shareholders of China\'s leading domestic hot pot chain, Little Sheep Group Ltd. (Little Sheep), have approved a takeover proposal by Yum! Brands Inc. (Yum!), Yum! said in a press release on Friday.

Statistics

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

Item
Specification/Unit
Current price (RMB)
Percentage changes as compared to last period
(%, January 1-10, 2012)
Rice
Japonica rice / kg
5.43
-0.2
 
Flour
Strong flour / kg
5.37
0.0
 
Flour
Standard wheat / kg
4.09
0.3
 
Soy products
Bean curd / kg
3.93
0.3
 
Peanut oil
5 Lin barrel bulk / litre
24.68
-0.2
 
Soyabean oil
5 Lin barrel bulk / litre
12.15
-0.1
 
Rape seed oil
Grade 1 in bulk / kg
12.62
0.2
 
Pork
Rump / kg
29.77
2.8
 
Pork
Belly meat / kg
29.32
3.0
 
Beef
Leg / kg
46.08
3.6
 
Mutton
Leg / kg
54.14
2.0
 
Chicken
Frozen fresh chicken / kg
19.02
1.4
 
Chicken
Breast / kg
21.54
0.8
 
Ducks
Frozen fresh duck / kg
17.20
0.9
 
Eggs
Fresh eggs in bulk / kg
9.31
-1.7
 
Source: China National Bureau of Statistics
 
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