Dim Sums: Agricultural Markets in China

China's liberal policy for soybean imports is conveying benefits to Chinese consumers. Falling global prices for soybeans are causing China's cooking oil prices to drop . Yihai Kerry--a Singapore-owned company that is the leader in China's cooking oil industry--announced that it plans to cut prices on its Arawana-brand vegetable oil products by 10%. This follows similar price cuts over the course of last year that will bring vegetable oil prices down more than 20% from early 2013. A company spokesman attributed the price cut to a decline in the cost of raw materials that is due to falling global prices for soybeans since last year. Competition ensures that low prices are transmitted to consumers. The second-biggest veg oil-supplier, COFCO, said it also plans to cut the price of its Fulinmen oils about 10%. Yihai Kerry has sent out a letter to sales agents notifying them of the price cut. It will take four to six weeks for the price cuts to reach retail products. A r...

Haiyan County in Zhejiang Province is offering subsidized  insurance against food safety incidents at rural banquets . The insurance covers victims of food safety incidents at group meals. It covers the personal injury, death, hospitalization, or burns of victims. It protects chefs against liability for negligence resulting in food poisoning, other food-borne illness, or foreign matter in food affecting five or more people. The insurance premium is 10 yuan per table, with half paid by the district government. According to the local food and drug monitoring bureau, there have been food safety incidents at rural banquets in recent years that threatened social stability. The local food safety monitoring officials say they came up with the pilot insurance system after conducting an assessment and gathered suggestions and arranging for an insurance company to participate. Food safety insurance pilots have already been underway in urban areas of the county for three months and are no...

China's Zhejiang Province is giving emergency aid to key players in its poultry industry to tide them over through a severe downturn resulting from the H7N9 crisis. Since December 2013, China's poultry sales volume and prices have fallen due to consumer fears that poultry could transmit H7N9 and many poultry markets have been closed. Poultry farms and processors have experienced serious losses and some face bankruptcy. On March 10, Zhejiang authorities issued a bulletin awarding emergency aid of 50 yuan per bird to core breeding farms that supply "grandparent" birds. The cost of the subsidy is split between provincial and local governments--70% provincial share in poor areas and 30% provincial share in other areas. The province is also giving subsidies of 80 yuan per metric ton to processors to keep their unsold inventories of chicken meat in cold storage during March through May. Graphic showing emergency aid for poultry farms in Zhejiang Province. The provi...

Chinese officials have announced plans to initiate "target price" subsidy trials for cotton and soybeans in 2014, but no details have been announced for these complicated programs. A Grain and Oils Market News article reports that the details for the cotton subsidy trial have been settled but discussions of the soybean policy are progressing slowly and no details will be announced until late in the year. Industry insiders say the "target price" subsidy for cotton will be 380 yuan per mu (about $380 per acre), and it will only be offered to farms in the Xinjiang Production Corps. The Production Corps is a network of farms and communities throughout the Xinjiang region which has a separate administration from that of the autonomous region. Rumors say farmers in Xinjiang outside the production corps will not be included in the subsidy trial, but the matter of which localities will get subsidies seems to be still under debate. A task force has been set up to dis...

The use of banned substances in feeding livestock is so pervasive in China that athletes at the country's elite sports training centers are forbidden from eating meat. The most common problem is use of beta agonists, commonly known in China as "lean meat powder." These substances promote formation of muscle instead of fat as the animal gains weight. Clenbuterol is the most common beta agonist, but ractopamine, salbutamol and others are also used to produce muscular "bodybuilder pigs." Beta agonists have been banned in China since 2000 and there was a prominent scandal in 2011 when their extensive use was revealed by a television report. Hormones and other substances are also a concern. During the 2008 Beijing Olympics athletes were not permitted to eat outside the Olympic village because of this concern. About 10 closely guarded secret farms were operated  to provide pork for the athletes. In 2010, a member of China's judo team was banned for two years...

Until last year, it appeared that China would increase meat consumption relentlessly, with knock-on impacts on the feed industry that would slurp up the world's grain supply. An analysis of China's feed industry for 2013 shows both feed manufacturers and livestock producers have made adaptations to cut costs during a sharp slowdown. Feed companies are consolidating and the strong ones are using the crisis to launch new business strategies. According to feed industry association statistics based on regular reporting by companies, China produced 191 million metric tons of manufactured animal feed during 2013. China's feed industry surpassed the United States a couple years ago to become the largest in the world. But after growing at rates of 7-to-12 percent during 2010-12, China's feed industry output fell 1.8 percent during 2013. The industry was affected by a number of factors that hit China's meat industry during 2013. Demand for meat was slowed by the general...