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China Agricultural Newsletter - June 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

The five-year food safety plan released

China released a five-year plan, upgrading its food safety regulations, Food Safety News reports. The new plan, developed by the country's Ministry of Health, sets out to update existing standards, write new ones, and in general close loopholes and abolish ambiguities. The framework was announced on the heels of China's Food Safety Week.

Stricter scrutiny on farm cost

China has ordered local authorities to tighten price monitoring of farm produces as the government is determined to ensure consumer prices remain stable amid a flood season. Its strong stance on prices comes even as the rise in the nation's Consumer Price Index, the main gauge of inflation, slowed to three percent in May, which was below expectations and the lowest in two years.

RMB 38 billion to be invested in water-efficient farming

Chinese authorities will create a fund worth RMB 38 billion yuan (US$1.27 billion) by 2015 to develop water-efficient farms in northeast grain-producing areas. The fund will be used to develop 38 million mu (2.53 million hectares) of water-efficient farmland in four northeastern regions, according to a work conference jointly held by the Ministry of Finance, the Ministry of Water Resources and the Ministry of Agriculture on June 26.

Anti-dumping probe over US DDGS ended

China's Ministry of Commerce (MOC) called an end to an anti-dumping investigation over a certain kind of animal fodder imported from the United States on June 21. The MOC canceled the investigation over U.S.-produced dried distiller's grains with or without solubles at the request of the Chinese domestic industry, which originally filed for the investigation but now considers it unnecessary.
Industry and Business Watch

Summer grain output to hit record high

China's output of summer grain crops, mainly winter wheat and early-season rice, is likely to hit a record high this year, an agriculture official said on June 21.As of June 20, China had harvested 318 million mu (21.2 million hectares) of winter wheat, according to Chen Mengshan, a spokesman from the Ministry of Agriculture.

Soybean imports from US to decline

The American Soybean Association said it expects China to import less soybeans from the United States this year, thanks to Chinese government measures last year to contain the country's inflation rate by releasing a large amount of State reserves. The country's large imports of Brazilian beans last fall will further dent its imports from the US, Paul Burke, ASA North Asia region director, said on June 6. But he did not disclose the exact amount of the reduction.

Argentina corn may be bought as demand increases

China may begin purchasing corn from Argentina as the demand increases and Argentina's genetically modified varieties gain approval, according to Norberto Yauhar, Argentina's agriculture minister.Argentina has already been listed as an approved supplier, but must demonstrate to China that its genetically modified corn is sourced from approved varieties. A second challenge may involve Argentina's supplies, as the country's output has been reduced by drought.

Pig prices rebound after government increases reserves

The central government's move to boost pork reserves has taken effect, and prices of live pigs have risen recently after continuous declines over the past four months, China's top economic planner said on June 25. The country's average farm-gate price for pigs rose to RMB 14.08 (US$2.21) per kilogram on June 13, up 1.01 percent from a week ago, after experiencing a continuous drop in the previous four months, the National Development and Reform Commission (NDRC) said in a statement.

Tianli Agritech plans broader retail strategy

Tianli Agritech, a leading producer of breeder and market hogs, and retailer of pork products, headquartered in Wuhan City, announced that it is refocusing its retail expansion strategy. In conjunction with the revised strategy, Tianli terminated its exclusive agreement with An Puluo Food on March 29, 2011.

Listed firms taking up swine herding

With pork prices rising and the harsh market climate running individual farmers out, many of China’s market listed companies are becoming interested in the pig breeding business, the China Daily reports. According to an incomplete survey, thirty or so companies are getting involved in pig breeding, some even with no prior experience in farming. Live pig stocks and sow herds have declined, while feeding costs have increased, leading to substantially increasing pig prices, are what prompted the companies to invest in pigs

Arla to invest in Mengniu Dairy

China is the fastest growing dairy market in the world and has over 1.3 billion consumers. Now Arla Foods, a European co-operative, is looking to strengthen its presence in the Chinese market by signing agreements with China’s leading dairy company, China Mengniu Dairy Company Ltd. and with the leading food and beverage company in China, COFCO Corporation.

Yili exposed over mercury in baby formula

China's consumer quality regulator on June 14 said it has found an "unusual amount" of mercury in baby formula produced by Inner Mongolia Yili Industrial Group Co., one of China's biggest dairy companies.The General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) said in a statement that the mercury, a metallic element that is toxic in high doses, was detected in several batches of Yili products during a check of baby formula products.

Low-lactose dairy calf bred

Scientists at a north China university say they have bred the world's first genetically-modified calf that will produce low-lactose milk in two years. The calf, named "Lakes," was born on April 24 at a lab of Inner Mongolia Agricultural University. She is healthy and strong, lab professor Zhang Li said.

Nestl building its dairy training institute in Heilongjiang province

Nestlé is marking the beginning of the construction of its new dairy farming institute in Shuangcheng reaffirming its role in the development of the Chinese milk industry. The company announced that the institute in Heilongjiang province aims to be China’s leading dairy training centre, offering teaching courses from national and international experts.

Imported milk powder to see higher prices

Foreign milk powder brands have started a new round of price hikes in recent months in China. The price of a particular brand of imported powdered milk is four times higher than that found on its official online store based abroad. The listed price of the organic infant powdered milk on the official website of German Te Fufen milk is only 9.95 euros, about RMB 80.05, or only a quarter of its retail price in China.

Nuscience plans two new factories in China

Steady business growth has led the feed mix company Nuscience to invest in extra capacity, by building two new facilities in the cities of Suzhou and Tianjin. When finished, Nuscience hopes to produce significantly more premixes, concentrates and piglet feed for the Chinese mainland market.

Vegetable prices fall for 7th week

Vegetable prices have fallen for seven consecutive weeks due to abundant supplies, dropping 1.7 percent for the week of June 11 to 17, Shen Danyang, spokesman for the Ministry of Commerce, said on June 19.Pork prices rebounded recently, up 0.7 percent from June 11 to 17, after falling for several months, as the country's pork stockpiling policy helped boost market demand, Shen said at a regular briefing.

Statistics

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

Item
Specification/Unit
Current price (RMB)
Percentage changes as compared to last period
(%, June 1-10, 2012)
Rice
Japonica rice / kg
5.45
0.0
Flour
Strong flour / kg
5.07
0.0
Flour
Standard wheat / kg
4.02
0.0
Soy products
Bean curd / kg
4.05
0.3
Peanut oil
5 Lin barrel bulk / litre
27.02
0.5
Soyabean oil
5 Lin barrel bulk / litre
12.20
-0.3
Rape seed oil
Grade 1 in bulk / kg
13.12
-0.1
Pork
Rump / kg
24.68
0.5
Pork
Belly meat / kg
24.50
0.3
Beef
Leg / kg
48.96
0.7
Mutton
Leg / kg
54.52
0.7
Chicken
Frozen fresh chicken / kg
18.40
0.4
Chicken
Breast / kg
20.87
-0.1
Ducks
Frozen fresh duck / kg
16.78
0.4
Eggs
Fresh eggs in bulk / kg
9.53
-1.9
Source: China National Bureau of Statistics

Major meat retail price June 2012

 

Pork (Lean):
                                                                      RMB1.00 yuan/kg
Average Sales Price (Street markets & Supermarkets)
Var. Percent
A.       6/01/12-6/10/12
B.       5/21/12-5/31/12
C.       5/01/12-5/10/12
D.       6/01/11-6/10/11
(A-B)/B
(A-C)/C
(A-D)/D
28.66
28.72
29.04
29.80
-0.20%
-1.31%
-3.83%
 
Egg:
                                                                      RMB1.00 yuan/kg
Average Sales Price (Street markets & Supermarkets)
Var. Percent
E.        6/01/12-6/10/12
F.        5/21/12-5/31/12
G.       5/01/12-5/10/12
H.       6/01/11-6/10/11
(E-F)/F
(E-G)/G
(E-H)/H
9.36
7.84
7.90
10.00
19.39%
18.48%
-6.4%
 
Chicken:       
                                                                              RMB1.00 yuan/kg
Average Sales Price (Street markets & Supermarkets)
Var. Percent
I.         6/01/12-6/10/12
J.         5/21/12-5/31/12
K.       5/01/12-5/10/12
L.        6/01/11-6/10/11
(I-J)/J
(I-K)/K
(I-L)/L
17.68
17.70
17.92
17.22
-0.11%
-1.34%
2.67%
 
Source: China Animal Agriculture Association

                                                                                                                                                                                    

 
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