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China Agricultural Newsletter - May 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

Ten measures to promote transformation of traditional agriculture

Mr. Zhang Laiwu, China’s Vice Minister of Science and Technology (S&T), announced at a news conference held by the State Council Information Office that China will take 10 measures to promote the transformation from traditional agriculture to modern agriculture. The 10 measures are shown as follows:

1.       Implement agricultural science and technology key special programs;
  1. Start the action for seed industry science and technology innovation;
  2. Extensively promote the S&T commissioners' rural technology entrepreneurial process;
  3. Actively promote the construction of the new rural S&T service system;
  4. Accelerate the construction of national agricultural S&T park;
  5. Speed up the rural information service;
  6. Deepen the reform of rural science and technology plan management;
  7. Continue to increase investment in agricultural S&T;
  8. Strengthen agricultural S&T innovation platform;
  9. Vigorously cultivate agricultural S&T personnel.

Product quality supervision to be intensified

China will intensify efforts in supervising the quality and safety of significant products this year, according to an action plan released by the State Council on May 3. According to the plan, government authorities are urged to launch a campaign against poor quality in key products.

Campaign to check health food producers

China will launch a campaign to check health food producers over food safety concerns, the State Food and Drug Administration (SFDA) said on May 23 on its website. The SFDA said in the statement that the campaign, which will run from the end of May to the end of September, will check whether health foods meet the country's food safety criteria, especially those criteria on some heavy metals.

Sale of soybean reserves planned

China plans to sell aboutthree million metric tons of the soybean from reserves to reduce its stockpiles, according to two people with knowledge of the matter.

Government may act to stabilize cost of pork

China's pork prices continued to decrease during the week from May 14 to 18, leading to widespread losses for the industry and prompting the government to take measures to prevent the prices from fluctuating greatly during the next few months.

Cotton stockpile to cushion price hike impact

Officials say China has built up its largest ever cotton stockpile over the past two decades as a precaution against a likely large reduction in cotton acreage this year and ensuing price fluctuations. As much as 3.13 million metric tons of domestic cotton have been accumulated over the seven-month period that ended on March 31, according to the China Cotton Association.

Industry and Business Watch

VP Hui urges better agricultural technology

Chinese Vice-Premier Hui Liangyu has called for innovation in agricultural science and technology while addressing a farming conference in Central China's Anhui province. In this age of urbanization and industrialization, science and technology are vital means to maintain stable development of agriculture as well as increase in farmers' income, Hui said on May 31 at a national conference on the agricultural science and technology education work, held from May 30 to June 1 in Hefei, Anhui’s provincial capital.

Report on agricultural modernization

Chinese Modernization Research Center of the Chinese Academy of Sciences (CAS) released the China Modernization Report 2012 - Agricultural Modernization Research. The report predicts that China will likely complete its transition from traditional agriculture to modern agriculture by 2030. This period will be characterized by an improved market system, mechanization, improved seed varieties, and adequate irrigation, among others.

 
In 2050, China will achieve further growth from a state of industrialization of its agriculture to knowledge-based agriculture. The report points out the following opportunities and challenges in the 21st century of Chinese agricultural modernization: population, land, water resources, agricultural labor, and agricultural productivity.
 

Key strategies for Chinese agricultural modernization include: improving agricultural efficiency, enhancing reforms for agricultural science and technology, improving investment proportion of agricultural science and technology; implementing farmers training programs, and raising farmers' level of education and per capita income.

Bumper summer grain harvest expected

China will reap a bumper harvest of summer grain crops this year, mainly wheat and early-season rice, forecasted Minister of Agriculture Han Changfu on May 31 in Hefei. The haul of summer grain is crucial to boost the entire year's grain production, Han said while addressing a wheat harvest launching ceremony in Anhui province.

Soybean industry in crisis

The difficulty in sourcing local soybean supplies is seriously jeopardizing the soybean oil processing industry in Heilongjiang Province. Industry insiders said yesterday that State subsidies are urgently needed to support the soybean industry.

UN: China to import additional corn

China, the second-largest consumer of corn after the United States, may import as much as 35 percent more of the crop as a rapid increase in the demand for meat leading to more grain being used to feed chickens and pigs, the United Nations said.

Ukraine grain producer looks to export corn to China

Ukraine grain producer UkrLandFarming Plc is looking to export corn to China as China looks to diversify its corn imports away from the U.S. to strengthen food security, according to UkrLandFarming chairman and owner Oleg Bakhmatyuk.

British pork to be exported to China

British pork will soon be on menus in China following a £50 million deal reached by British Agriculture Minister Jim Paice. He announced the landmark agreement with the Chinese Government while on a mission to China to boost trade for British food and farming businesses.

Meat sales gain new avenue through online marketing

With life getting faster and online shopping boosting in recent years, China's meat products have gained new opportunities for sales through non-traditional avenues like the Internet, according to reports. Many Chinese companies are taking advantage of this new marketing mode.

Bright Food to buy 60 percent of Weetabix

One of China's largest food groups, Shanghai-based Bright Food Group, said on May 3 it had agreed to buy 60 percent of Weetabix, a cereal maker in Britain. The deal will be the largest overseas acquisition by a Chinese company.

Nestle to build dairy farm in Inner Mongolia

Swiss food and beverage giant Nestle has signed an agreement with a county government in north China's Inner Mongolia autonomous region to build a new dairy farm in the area. The government of Old Barag Banner (county) confirmed on May 22 that it has signed a memorandum of understanding with Nestle to build a 2,000-cow dairy farm by the end of 2013.

Fonterra to develop China specific products

New Zealand-based Fonterra, the world's biggest dairy company, announced on May 21 it is to develop unique products for the booming Chinese market at a new innovation center in Shanghai. The development of innovative products designed to meet the needs of Chinese consumers was critical to the integrated milk business the company was building in China, Fonterra chief executive officer Theo Spierings said at the opening, according to a statement issued by Fonterra.

Food manufacturing to exceed RMB 9 trillion in 2012

An official from a national food industry association said on May 17 that the industry's output value is expected to exceed RMB 9 trillion (US$1.4 trillion) this year.

Feed output hits 181 million metric tons in 2011

China's industrial feed output reached 181 million metric tons in 2011, with a total value of RMB 634.8 billion (US$100.65 billion), making China the largest feed producer in the world, according to Gao Hongbing, Vice Minister of Ministry of Agriculture.

Toxic vegetables expose industry loopholes

Reports of formaldehyde-tainted Chinese cabbage in East China's Shandong province, the country's largest vegetable production base, have exposed some clandestine market practices and triggered a new wave of food safety concerns.

Agricultural trade deficit widens

China's agricultural trade deficit surged by 80 percent year-on-year during the first four months of 2012, signaling the country's growing reliance on food imports. During the first four months, the country's total agricultural trade volume jumped to US$54.7 billion, up 17.7 percent from the same period last year, according to data released by the Ministry of Agriculture on May 31.

Statistics

Average food prices in 50 cities May 21-30, 2012

 

Item
Specification/Unit
Current price (RMB)
Percentage changes as compared to last period
(%, May 11-20, 2012)
Rice
Japonica rice / kg
5.41
0.2
Flour
Strong flour / kg
5.06
0.0
Flour
Standard wheat / kg
4.01
-0.3
Soy products
Bean curd / kg
4.01
-0.5
Peanut oil
5 Lin barrel bulk / litre
26.69
0.8
Soyabean oil
5 Lin barrel bulk / litre
12.28
-0.1
Rape seed oil
Grade 1 in bulk / kg
13.09
0.0
Pork
Rump / kg
24.79
-0.6
Pork
Belly meat / kg
24.60
-0.6
Beef
Leg / kg
48.09
0.9
Mutton
Leg / kg
53.83
0.6
Chicken
Frozen fresh chicken / kg
18.48
0.0
Chicken
Breast / kg
20.88
-0.3
Ducks
Frozen fresh duck / kg
16.77
-0.4
Eggs
Fresh eggs in bulk / kg
8.42
6.2
Source: China National Bureau of Statistics

Major meat retail price May 2012

 

Pork (Lean):
                                                                      RMB1.00 yuan/kg
Average Sales Price (Street markets & Supermarkets)
Var. Percent
A.       5/11/12-5/20/12
B.       5/01/12-5/10/12
C.       4/11/12-4/20/12
D.       5/11/11-5/20/11
(A-B)/B
(A-C)/C
(A-D)/D
28.94
29.04
29.52
27.46
-0.34%
-1.96%
5.39%
 
Egg:
                                                                      RMB1.00 yuan/kg
Average Sales Price (Street markets & Supermarkets)
Var. Percent
E.        5/11/12-5/20/12
F.        5/01/12-5/10/12
G.       4/11/12-4/20/12
H.       5/11/11-5/20/11
(E-F)/F
(E-G)/G
(E-H)/H
7.80
7.90
8.14
9.40
-1.27%
-4.18%
-17.02%
 
Chicken:       
                                                                              RMB1.00 yuan/kg
Average Sales Price (Street markets & Supermarkets)
Var. Percent
I.         5/11/12-5/20/12
J.         5/01/12-5/10/12
K.       4/11/12-4/20/12
L.        5/11/11-5/20/11
(I-J)/J
(I-K)/K
(I-L)/L
17.78
17.92
17.96
17.24
-0.78%
-1.00%
3.13%
 
Source: China Animal Agriculture Association
 
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