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China Agricultural Newsletter - July 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 Mr. Joseph Rude at

Laws, Regulations and Policies

Food safety becomes national priority

The State Council pledged on July 3 to solve food safety issues in three years, but effective supervision and punishment of those breaking the law is the key to accomplish the ambitious target, analysts said.

New strategic industries unveiled plan

China has released a plan for the development of its new strategic industries from now to the end of 2015, according to a latest statement released by the State Council.The seven new strategic industries include energy conservation and environment protection, new information technology, biology, high-end equipment manufacturing, new materials, new energy and new-energy cars, according to the plan.

China pledges to help private firms invest abroad

China pledged to help private companies invest abroad while guiding and regulating their investment activities. The country will strengthen macro guidance on private companies' overseas investment and help them invest in a step-by-step and focused manner, according to a statement jointly issued by 13 central government departments, including the Ministry of Commerce and the People's Bank of China.

VAT reform expansion to be launched first in Beijing

Beijing may take the lead in the expansion of China's value-added tax pilot program by launching its VAT reform on Sept 1, a person close to the policymaking process said on July 26. The State Council approved a plan to extend a pilot program to replace the business tax with a VAT on July 25. The program, currently only in Shanghai, will extend to eight other provincial-level regions - Beijing, Tianjin, Jiangsu, Zhejiang, Anhui, Fujian, Hubei and Guangdong - and the cities of Xiamen and Shenzhen.

Measures set to improve supply

China's State Council issued a document on July 11 to improve the domestic circulation of consumer goods and boost the development of supply chains. Economists said that the document aimed to expand domestic consumption amid a slowdown in the world's second-largest economy mainly resulting from slowing growth in the country's exports and curbs on the real estate industry.

China and U.S. establish interim procedures for health certificates for meat and poultry products

China’s requirement for electronic pre-notification of health certificates for meat and poultry products kicks in on June 30, 2012. In preparation for this deadline, USDA has been actively working to sign companies up in the electronic Trade Document (eTDE) system.

Industry and Business Watch

US drought spikes grain prices

China's grain prices are likely to rise, leading to a rebound in consumer inflation, after global grain prices soared because of a drought in the US, analyst warned on July 19.

Farm produce prices edge up

China's farm produce prices edged up during the week of July 16 to 21from a week earlier, with the wholesale prices of 18 types of vegetables up 2.5 percent, official data showed on July 23.

"Father of hybrid rice" predicts increasing yields

“Father of hybrid rice” Yuan Longping has said he believes yields from these special strains can be further upped to 1,000 kg per mu in the future.After agricultural scientists raised the yield of hybrid rice to 926.6 kg per mu (0.0667 hectares) last September, Yuan attended a high-end talent summit on July 5 in Changchun, capital of Jilin province, where he told Xinhua, "I believe that raising the yield of hybrid rice to 1,000 kg per mu must be realized. And scientifically, hybrid rice has the potential."

Improper storage leads to huge grain loss

An agriculture official said on July 3 that China loses about 25 million metric tons of grain every year due to improper storage. "Such losses are startling," Zhang Tianzuo, director of farm produce processing bureau with the Ministry of Agriculture, told an agricultural forum held in Beijing, citing a loss ratio between 8 and 12 percent.

NDRC consults on edible oil

China's top economic planner National Development and Reform Commission (NDRC) made inquiries with major cooking oil producers who announced earlier this month to raise the prices of some products, especially peanut oil, in a bid to stabilize the domestic edible oil market and curb inflation.

JSR Genetics delivers 885 breeding pigs

JSR Genetics has shipped 885 high genetic merit breeding pigs to China to create a new nucleus herd at Hubei Jinxu JSR Breeding Limited, the joint venture between JSR and Chinese pig producers Hubei COFCO.

Milk standard up to international level

The Ministry of Health denied an allegation on July 6 that the national standard on the maximum limit of melamine in baby milk formula is laxer than the level newly set by an international organization. The Codex Alimentarius Commission has set a maximum limit of 0.15 mg/kg for melamine in liquid infant milk, according to a news release on the website of the World Health Organization on July 4.

Dairy company halts production over tainted formula scandal

A Chinese dairy company has been ordered to suspend production after its infant formula products were found to contain the carcinogen aflatoxin, the nation's quality watchdog said on July 23.

Talk hopes for New Zealand farm deal

A New Zealand indigenous Maori trust said on July 2 it still hoped to resume talks with a Chinese firm that is bidding to buy 16 North Island dairy farms after launching another court hearing to stop the deal.

Cotton producers face grim prospects

The price gap between locally produced and imported cotton in China has been widening, weakening the international competitiveness of the country's textile and garment industry, industrial bodies and analysts said on July 3.

China Green Agriculture launched seven new fertilizer products

China Green Agriculture, Inc. mainly produces and distributes humic acid-based compound fertilizers, other varieties of compound fertilizers andagricultural products through its wholly-owned subsidiaries in China. The company announced on July 30 that it has launched seven new fertilizer products and added 49 new distributors in the fourth quarter which ended on June 30, 2012.

PepsiCo opens 6th food plant in China

PepsiCo Inc. has opened a new food production plant in China, its sixth facility in the country, in a move to strengthen its position in a growing market. The food and beverage company, whose brands include Lay's, Quaker Oats, Tropicana and its namesake cola, said on July 10 that the new facility will help it expand further into central and western China.

Chinese investment in US set for record year

Chinese investment in the United States is expected to hit a record high this year, thanks largely to big-ticket items, according to a report from the Rhodium Group, a New York-based organization that analyzes global trends.


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

Current price (RMB)
Percentage changes as compared to last period
(%, July 1-10, 2012)
Japonica rice / kg
Strong flour / kg
Standard wheat / kg
Soy products
Bean curd / kg
Peanut oil
5 Lin barrel bulk / litre
Soyabean oil
5 Lin barrel bulk / litre
Rape seed oil
Grade 1 in bulk / kg
Rump / kg
Belly meat / kg
Leg / kg
Leg / kg
Frozen fresh chicken / kg
Breast / kg
Frozen fresh duck / kg
Fresh eggs in bulk / kg
Source: China National Bureau of Statistics

Major meat retail price July 2012

            Pork (Lean):

                                                                      RMB1.00 yuan/kg
Average Sales Price (Street markets & Supermarkets)
Var. Percent
A.       7/11/12-7/20/12
B.       7/01/12-7/10/12
C.       6/11/12-6/20/12
D.       7/11/11-7/20/11
                                                                      RMB1.00 yuan/kg
Average Sales Price (Street markets & Supermarkets)
Var. Percent
E.        7/11/12-7/20/12
F.        7/01/12-7/10/12
G.       6/11/12-6/20/12
H.       7/11/11-7/20/11
                                                                              RMB1.00 yuan/kg
Average Sales Price (Street markets & Supermarkets)
Var. Percent
I.         7/11/12-7/20/12
J.         7/01/12-7/10/12
K.       6/11/12-6/20/12
L.        7/11/11-7/20/11
Source: China Animal Agriculture Association