Asian Agribusiness Consulting

China approves two more GMO crops for import, DuPont disappointed

China has approved two more genetically modified (GMO) crops for import, the Ministry of Agriculture said, the second such move in the past month to expand access to biotech seeds as part of Beijing's 100-day trade talks with Washington. 

The two new crops, approved from July 16 for a period of three years, are Syngenta's 5307 insect-resistant corn sold under the Agrisure Duracade brand and Monsanto's 87427 glyphosate-resistant corn, sold under the Roundup Ready brand, the ministry said on its website on Monday. 

The move brings total approvals to four after the government last month gave the go-ahead to Dow Chemical Co's Enlist corn and Monsanto's Vistive Gold soybeans. 

But it leaves four other products owned by Monsanto, DuPont and Dow still on a waiting list pending approval from Beijing. 

DuPont was "disappointed" its Pioneer insect-resistant corn was not included, a spokeswoman said in an email. The other three are Dow's Enlist soybeans and two alfalfa products developed by Monsanto. 

Dow's Asia Pacific media relations representative Eileen Zeng could not be immediately reached nor could Monsanto's China corporate affairs manager Lian Meng for comment. 

Hopes that all six would get the go ahead in the second round mounted after the National Biosafety Committee (NBC), a group of experts who advise the government on GMO safety, met late last month to review the six remaining products, company executives and experts said. 

The first batch of approvals also followed an NBC meeting. The government has not confirmed the meeting took place or commented any further on the issue. 

The approvals come after China promised to speed up a review of pending import applications as part of the 100-day trade talks with the United States. China is the top export market for U.S. agricultural products. 

While the country does not permit planting of GMO food crops, it does allow GMO imports such as soybeans and corn for use in its animal feed industry. 

Getting new varieties approved for import takes years, forcing leading agrichemical players to restrict sales during China's review process. 

Earlier this year, DuPont Pioneer began a limited commercial introduction of its next-generation Qrome corn products under stewardship in the Western United States, allowing it to make the new technology available to some growers ahead of Chinese approval. 

DuPont continues to cooperate with Chinese regulators, the spokeswoman said, but added that "global markets should conduct predictable, transparent regulatory reviews based on sound science and be free from political influence". 

The U.S. industry has repeatedly complained about the lack of transparency in China's biotech review process. 

Beijing has in the past held back approvals of imported GMO products amid concerns about anti-GMO sentiment in the country.

Source: Reuters. Date: 2017-07-18

ADB: Climate Change Threatens Asia’s Development Gains

Asia’s hard-won development gains are at risk of being reversed by the effects of climate change, according to the Asian Development Bank (ADB). However, the news is not all bad for the region, with new energy investments expected to cement its leadership in the “clean industrial revolution.”

The warning on climate change follows U.S. President Donald Trump’s decision to withdraw the world’s second-biggest emitter from the Paris Agreement, even while the rest of the Group of 20, including the world’s largest emitter, China, have vowed to press ahead with emissions reductions.

Released Friday at the bank’s headquarters in Manila, the report produced by the ADB and the Potsdam Institute for Climate Impact Research (PIK) makes for grim reading, should the predictions eventuate. Under a “business as usual” scenario, a 6 degree Celsius temperature rise is projected over the Asian landmass by the end of the century, with an increase as high as 8 degrees C forecasted in Afghanistan, Pakistan, Tajikistan, and northwest China.

“These increases in temperature would lead to drastic changes in the region’s weather system, agriculture and fisheries sectors, land and marine biodiversity, domestic and regional security, trade, urban development, migration, and health. Such a scenario may even pose an existential threat to some countries in the region and crush any hope of achieving sustainable and inclusive development,” the report said.

Among the predicted effects are more intense tropical cyclones and typhoons, with coastal and low-lying areas at increased risk of flooding. Global flood losses are expected to reach $52 billion a year by 2050 compared to $6 billion in 2005.

Thirteen of the top 20 cities seen suffering the largest growth in flood losses are located in the Asia-Pacific, comprising Guangzhou, Shenzhen, Tianjin, Zhanjiang, and Xiamen in China; Chennai-Madras, Kolkata, Mumbai, and Surat in India; Jakarta, Indonesia; Nagoya, Japan; Bangkok, Thailand; and Ho Chi Minh City, Vietnam.

Yet while annual precipitation is expected to increase by up to 50 percent over most land areas in Asia, countries like Afghanistan and Pakistan could see a decline in rainfall by 20 to 50 percent, the ADB said.

Food production will suffer as a result, with production costs also rising. In some Southeast Asian nations, rice yields could decline by up to 50 percent by 2100 “if no adaptation efforts are made,” while almost all crops in Uzbekistan could see a 20 to 50 percent decline even under a 2 degree Celsius temperature rise.

Food shortages could increase the number of malnourished children in South Asia by 7 million, as food import costs surge to $15 billion a year by 2050 compared to $2 billion.

Major disruptions to current farming communities could prompt mass migration to the cities, fueling overcrowding and overwhelming social services.

Energy security could also be threatened, due to the reduced capacities of thermal power plants from a scarcity of cooling water and the potentially intermittent performance of hydropower. This could fuel conflicts as countries compete for limited energy supply, the report warned.

Meanwhile, marine ecosystems such as coral reefs will be in serious danger. In the Western Pacific, all coral reef systems will suffer mass coral bleaching if global warming increases by 4 degree Celsius, yet even a 1.5 degree C temperature rise would cause serious bleaching to 89 percent of coral reefs, damaging reef-related fisheries and tourism.

These losses could amount to billions of dollars, judging by a recent estimate that Australia’s Great Barrier Reef is worth A$56 billion ($44 billion) in tourism and other economic benefits, or the equivalent of 12 Sydney Opera Houses.

Climate change would also cause damaging health effects, with heat-related deaths among the elderly expected to increase by 52,000 by 2050, according to World Health Organization data. Deaths related to diseases such as malaria and dengue could also rise, adding to the death toll from outdoor air pollution, which is already causing 3.3 million deaths each year globally, led by China, India, Pakistan, and Bangladesh.

Asia is already experiencing the effects of climate change, accounting for nearly 30 percent of total global economic losses caused by extreme weather between 2000 and 2008, according to the UN Intergovernmental Panel on Climate Change.

Ratings agency Standard & Poor's has also suggested that Cambodia, Vietnam, and Bangladesh are the world’s most vulnerable countries to climate change, based on factors including agricultural output and adaptive capacity.

Economic Opportunity

However, Asia’s response to climate change provides it with an economic opportunity too, as noted by PIK director Professor Hans Joachim Schellnhuber.

“On the one hand, Asian greenhouse-gas emissions have to be reduced in a way that the global community can limit planetary warming to well below 2 degrees Celsius, as agreed in Paris 2015. Yet even adapting to 1.5 degrees Celsius temperature rise is a major task,” he said.

“So, on the other hand, Asian countries have to find strategies for ensuring prosperity and security under unavoidable climate change within a healthy global development. But note that leading the clean industrial revolution will provide Asia with unprecedented economic opportunities. And exploring the best strategies to absorb the shocks of environmental change will make Asia a crucial actor in 21st-century multilateralism.”

Asia has already become a world leader in clean energy investment, led by China, which plans to spend 2.5 trillion yuan ($369 billion) on renewable power generation by 2020. Both China and India are seen attracting $4 trillion worth of clean energy investment by 2040, helping to decouple economic growth from emissions, according to Bloomberg New Energy Finance.

The ADB has backed such efforts with a record $3.7 billion in climate financing in 2016, which it has committed to reaching $6 billion by 2020. Rival Beijing-led lender, the Asian Infrastructure Investment Bank, has also pledged to support investments in renewable energy and energy efficiency as part of the Paris Agreement, noting that more than 1 billion people in Asia still lack access to secure and clean electricity.

The ADB considers the coming decade as crucial in implementing mitigation measures, since the “business as usual” scenario projected under the Paris accord would render any adaptation efforts ineffective.

Despite a 10-fold rise in per capita incomes over the past 25 years, Asia still remains home to two-thirds of the world’s poor, risking even deeper poverty and disaster should mitigation and adaptation efforts fail.

Fortunately for the world’s most economically dynamic region, Asia still has “both the capacity and weight of influence to move toward sustainable development pathways, curb global emissions, and promote adaptation,” the report concluded.

The message could not be any clearer for Asia’s policymakers, should they wish to sustain the region’s stunning economic success.

Source: The Diplomat. Date: 2017-07-18

Agricultural imports in 2017 rise rapidly

China's imports of major agricultural products continued to increase fast in the first five months of the year, driven by price gaps between domestically produced products and imported products, according to the Ministry of Agriculture.

Wheat imports between January and May reached 2.2 million metric tons, an increase of 67.3 percent year-on-year, while import of soybeans increased by nearly 20 percent to 37 million tons, and imports of beef rose by 14 percent during the period, compared with the same period last year, Wang Ping, deputy chief of the ministry's Department of Market and Economic Information, said at a news conference on Monday.

China imported 1.68 million tons of wheat and associated products between January and April, an increase of 94 percent over the same period last year, Wang said, citing figures from the General Administration of Customs.

Imports of some major agricultural products kept increasing quickly between 2011 and 2016, with grain imports increasing at an average annual rate of 32.2 percent, meat at an average annual rate of 24.9 percent, and dairy at 16.6 percent during the five-year period, according to the ministry.

"A rapid increase in imports has also had a great impact on China's domestic market for agricultural products," Wang said.

"Due to a sustained increase in imports, it is predicted that beef and mutton prices in the domestic market may fall slightly this year."

The prices of many agricultural products produced in China are higher than the international level due to higher production costs, according to the Ministry of Agriculture. An exception is corn, whose average wholesale price was 1.58 yuan (23 cents) per kilogram in the first part of the year, similar to the international level, a decrease of 14.4 percent year-on-year, according to the ministry.

Dairy industry analyst Song Liang said the average cost of dairy products in China was at least 20 percent higher than in the European Union, largely due to higher production costs resulting from limited resources such as water and grazing land. This has caused a rapid increase in dairy imports, he said.

Due to causes such as increasing supply, prices of agricultural products in China in general have kept falling since the beginning of this year, with prices of fresh and perishable products, such as vegetables, pork, chicken and eggs seeing the biggest decline, Wang, from the Ministry of Agriculture, said.

For example, the price of eggs decreased to their lowest in the last 10 years in the first half of the year before rebounding recently, and the price of poultry also declined in the first half of the year, Wang said.

The major causes were increased production, as a result of higher poultry and egg prices two years ago and the falling prices of feed such as corn, and an increase in H7N9 bird flu cases during the first half of the year in China, he said.

The price of eggs started to rise in June due to reduced supply following sustained lower prices since late last year, Wang said.

Egg prices may continue to rise in the second half of the year, but at a slow rate due to adequate supply, he said.

The prices of some other major agricultural products, such as pork and vegetables, may also rebound in the second half of the year, Wang said.

Source: China Daily. Date: 2017-07-18

Post-harvest technologies needed to increase farm produce competitiveness

Using post-harvest technologies is crucial to increase the competitive edge of farm produce, heard a recent workshop in Ho Chi Minh City.

The event was held by the Tropical Agricultural Research and Consultancy Centre in HCM City and the Biotechnology Centre of HCM City on July 15.

Director of the Protective Packaging Solutions company SancoPack Pham Quoc Bao said developing preservation technologies is important to help farmers reduce losses in quantity and to maintain the quality of farm produce.

In Vietnam, post-harvest losses for seed plants were estimated at 10 percent, tubers at 10-20 percent and vegetables and fruits 10-30 percent, according to the UN Food and Agriculture Organisations (FAO).

This is mainly due to incorrect harvesting, packaging, transporting and preserving techniques, the FAO said, adding that packaging technologies in Vietnam are underdeveloped.

To increase the competitiveness of Vietnamese farm produce, post-harvest preservation will receive special attention from farmers and businesses.

Notably, the Chemistry Institute under the Vietnam Academy of Science and Technology has studied a technology called “GreenMAP” which keeps vegetables and fruits fresh three times as long as traditional methods without chemical impacts.

This new technology is simple, cheap and reduces post-harvest losses by 5 percent.

Experts suggested attracting young human resources to the agricultural sector and providing training courses for them.

Source: VNA. Date: 2017-07-18

Dairy takes a hit in Chinese crackdown

China’s recent suspensions of milk products from factories in South Australia and Victoria reflect a rapid increase in interventions by the country’s food and drug administration.

In October last year, the administration suspended the importation of 296 food and cosmetic products from a number of countries for failing to meet Chinese standards. In May this year, 487 were suspended.

The licences for Parmalat’s Clarence Gardens milk production centre in South Australia and Bellamy’s infant formula and other products from Camperdown Powder in Victoria have been suspended — the former because the temperature at which it heats milk is not that required by China, and the latter because of unspecified concerns raised by an unknown third party.

President Xi Jinping said earlier this year that his government would impose “the strictest standards, strictest supervision, strictest accountability measures, and impose the strictest punishments” to ensure food safety.

China’s fast expanding dairy industry is also under a strong drive to buy local. The China Dairy Industry declared 2017 the Year of Chinese Milk, with a media campaign assuring consumers that “Chinese milk products meet international stan­dards”.

It is seeking to speed up the rebuilding of confidence following the scandal of 2008 when it was revealed melamine had been added to some Chinese milk products to boost apparent protein content, causing thousands of babies to become seriously ill.

During a visit a few months ago to a milk producer in Zhangjiakou in Hebei province near Beijing, President Xi said: “I am completely convinced of the need for our next generations to grow up on quality milk powder.”

He said the communist party had taken many measures to ensure domestic producers continued to dominate China’s dairy markets. Agriculture Minister Han Changbin has said that “a country with 1.4 billion people cannot afford not to have a dairy industry. We have no reason to give up this massive market and hand it over to others”.

The current Five Year Plan that ends in 2020 requires the government to play a greater role in the dairy industry, including in “policy guidance, the control, support and protection of the sector overall, and in propaganda”.

But it allows for a continued increase in imports as well. The plan aims for the domestic industry to increase its production from 38.7 million tonnes to 41 million in the five years to 2020, with its share of the sector overall to remain at a minimum of 70 per cent. But in 2015, domestic production accounted for 77.9 per cent.

In the seven years following the melamine scandal, the quantity of imported milk products soared from 387,000 tonnes a year to 1.79 million tonnes. At the start of this period, a free-trade agreement with New Zealand came into effect, and quotas imposed on European Union dairy imports were removed.

The FTA with Australia has also now been in operation for 18 months. Under the agreement, the sanitary and phytosanitary measures of both countries that prevent the introduction of pests and diseases and help ensure food is safe for consumption remain in place.

But the FTA establishes a framework for greater co-operation and information exchange on SPS measures, and provides for a committee to help address problems.

Trade expert Alan Oxley, principal of ITS Global, said “the FTA is something of a bureaucratic nightmare, but refusal to allow Bellamy’s to import would appear to breach rights to trade provided in the agreement”.

A spokeswoman for Australia’s Agriculture Department said that “just as we expect other countries to respect our import conditions, so must we respect theirs when we seek to export our products”.

She said the government was continuing to seek the listing by China of more dairy establishments permitted to export products there, including infant formula.

Both the factories whose licences have been suspended are regularly audited for compliance with both Australian and Chinese requirements, and the former continue to be met — the department having no concerns regarding food safety issues from either.

Source: The Australian Business Reviews. Date: 2017-07-17

China signs second-largest deal for U.S. soybeans

A delegation of commodity importers from China signed agreements to buy 12.53 million tonnes of U.S. soybeans and 371 tonnes of U.S. beef and pork even as President Donald Trump warned about issuing trade sanctions against the country.

The total value of the combined soybean and meat deals was set at $5.012 billion by the U.S. Soybean Export Council. The beef deal came just weeks after China reopened its market to U.S. supplies after a 14-year ban.

But traders and analysts said the agreements from the world’s top buyer of soybeans provided little insight for the market, as final prices and shipment dates were not specified. The agreements added up to the second-largest on record between the two countries.

“They are meaningless,” said Charlie Sernatinger, global head of grain futures at ED&F Man Capital. “It is window dressing.”

The deals were signed as frame contracts, which are typically non-binding letters of intent to buy at a later date, without formal sales terms.

Terry Branstad, the newly appointed U.S. ambassador to China, had said that serving U.S. beef in the embassy was a goal of his.

Agriculture trade has been a bright spot in U.S.-China relations since Trump’s inauguration, unlike other areas.

Trump said on Thursday he was considering using quotas and tariffs to deal with the “big problem” of steel dumping from China and other countries.

Agriculture groups have raised concerns that countries seeking to retaliate against U.S.-imposed trade restrictions will target commodities such as soybeans and corn that U.S. farmers produce a surplus of.

“I think that is something that we should always be concerned about and thinking about,” said Jim Sutter, chief executive officer of the U.S. Soybean Export Council. “But I think agricultural trade hopefully will continue to be that stabilizing force.”

The record for a soybean frame contract was for 13.18 million tonnes signed in 2015. A year ago, Chinese buyers agreed to buy 4 million tonnes of soybeans.

The market shrugged off the news, which hit late in the trading day.

“I wouldn’t read anything into this,” said a U.S. soybean export trader who asked not to be named because he is not authorized to speak with media. “It’s photos and shaking hands. To me, contracts have dates and prices.”

The benchmark Chicago Board of Trade November soybean futures contract settled down 46-1/2 cents at $9.87-1/2 a bushel, just a penny above its session low. The 4.5 percent daily loss was the biggest for soybeans since July 7, 2016.

Thursday’s deals likely will not impact China’s import volume from the United States as importers will continue to buy based on need and price, said the export trader, who has attended signing agreements in the past.

Still, the gatherings bring together buyers and sellers, which builds business ties and can lead to future export agreements, he added.

The U.S. Agriculture Department expects China to import 93 million tonnes of soybeans in the 2017/18 marketing year, up from 89 million in 2016/17.

Total U.S. soybean exports are pegged at 58.51 million tonnes, up from 55.79 million tonnes a year earlier.

Source: Reuters. Date: 2017-07-17

China makes bid for caviar market with sturgeon seedling giveaway

Beijing authorities are distributing free sturgeon seedlings in a bid to kick-start the sector in Beijing’s rural areas, which are better known for producing carp and lower-grade species for consumption in city restaurants and for sale in supermarket fish tanks. 

The move appears to be part of a continued effort by China’s government to get farmers to cultivate more high-value species and matches similar sturgeon-breeding programs in northern and eastern China, which have seen a surge in Chinese caviar production, much to the ire of producers in Russia. 

The scheme, run by the Beijing Aquatic Technology Extension Bureau – a government-funded agency offering training and advise to fish farmers – will see the seedlings distributed to farmers in the Fangshan, Pingu and Shunyi, all rural districts outlying China’s capital. 

“This is the priority extension activity of our bureau to create superior species,” a statement from the bureau said. “These seeds have been welcomed by fish farmers.” 

Source: SeafoodSource. Date: 2017-07-17

GMS gets closer to a food safety strategy

A draft five-year strategy for promoting safe and environment-friendly agriculture products in the Greater Mekong Subregion (GMS) that would enhance regional food safety and promote trade is expected to be finalised today, according to the Asian Development Bank.

“The five-year Regional Strategy and Action Plan (2018-2022) for Promoting Safe and Environmentally-Friendly Agro-based Value Chains focuses on making the region a global player in safe agricultural-based food products produced through sustainable and climate resilient means,” said Edgar Valenzuela, a communication and knowledge management specialist with the ADB.

“The strategy would seek to be inclusive, taking the needs of small-scale farmers and enterprises into consideration,” said Mr Valenzuela.

He added that the strategy would be finalised today at the ongoing 14th annual GMS agricultural working group meeting in Siem Reap organised by the Ministry of Agriculture and reviewed again in September, before it is adopted.

Pavit Ramchandran, an ADB senior environment specialist, echoed Mr Valenzuela’s comments.

“The focus will be on inclusiveness for, and the impacts on, small-scale farmers and micro- and small-agricultural enterprises in the GMS,” said Mr Pavit.

Mr Pavit said the working group also discussed the outcomes of the highly successful GMS one-stop market pavilion and the policy forum organised at the recently concluded World of Food Asia 2017 in Thailand.

The GMS, comprising Cambodia, China, Laos, Myanmar, Thailand and Vietnam, is a major food-producing region. The region has comparative advantages in specific food supply, built upon its abundant natural resources, low costs of production, proximity to large markets, and a variety of unique food items.

“The overriding theme of the regional strategy for 2018 – 2022 will be on establishing a food safety regime in the GMS that aligns with regional and international standards,” stated the draft strategy.

According to the draft strategy, agricultural and food trade is growing rapidly in the GMS and food safety would enable it “to move further along the value-added path” and attract more foreign direct investment.

“The continuity of its landmass, the rapid development of its economic corridors, and the diversity of its agro-ecological environment make the GMS uniquely placed within Asean to be a leader in the agrifood trade,” added the draft strategy.

The draft strategy also warned that porous borders throughout the GMS present the risk that unscrupulous business enterprises could harm consumers through the distribution of unsafe food products.

“Therefore, it is essential that coordination of policies and border control are enacted by GMS countries to harmonise protocols and practices related to trade of seed, fertiliser, animal feed, pesticides, food, and live animals to protect the health of crops, livestock, and people,” it added.

Source: Khmer Daily. Date: 2017-07-14

Rural China booming thanks to boom in online trade

A new wave of young entrepreneurs is emerging in remote, rural corners of China.

Theirs is not a tale of smart horticulture but one of online opportunism, with e-commerce booming even as the rest of China’s economy slows.

They are optimists, willing to move to places where they know no one, to re-educate themselves, to change careers, to borrow from friends and relatives in order to go into business on their own, to risk all for a brighter future.

Li Dan and her husband Li Zhong, both aged 30, are typical participants in this new wave.

They are making a fortune in an ancient village in the dusty northern Chinese countryside with its harsh climate of extremes.

Online commerce is emerging as the only significant part of the economy, besides old-fashioned retail, where private companies dominate. It is starting to drive change and prosperity in rural areas where half a billion people live.

A McKinsey report says that about 257 million people in lower-tier cities and rural areas are online shoppers, compared with 183 million in China’s higher-tier cities.

Alibaba established a Rural Taobao strategy two years ago, and already runs 16,000 service centres in villages and 380 larger centres in counties — from which they both package products for national distribution and deliver to people in the countryside.

Its principal rival JD.com has opened 1500 rural self-operated service centres as well as establishing Jingdong Bang, a home appliance delivery and maintenance team in partnership with local shops, with 1300 outlets in lower-tier cities and the countryside.

The Li family lives two hours’ drive north of Beijing, where they have converted a former kindergarten and courtyard buildings into a warehouse and offices in Mafang Cun — Horse Raising Village — where cars have to be parked outside because the streets are only wide enough for horses.

They manage a fast-growing business selling diving and swimming gear in China but also in Hong Kong and Taiwan, and increasingly in countries further afield.

The Lis both grew up in “peasant” families, but have become rich in a manner their own parents find unimaginable.

During 2016 their company’s turnover rose 25 per cent from 2015 to about $6 million, chiefly through sales via China’s biggest platforms, JD.com, Taobao and Tmall.

Jobs are being shed in China’s cities as labour costs rise and factories both automate and migrate to cheaper locations like Vietnam or Bangladesh.

Rural workers who used to chase manufacturing jobs in the cities are finding such work elusive and housing impossibly expensive.

They are reassessing the value of staying in the countryside, with cleaner air, cheap or free accommodation, fresh food and a lifestyle they like. Now, the jobs are coming to them.

For the rural hinterlands surrounding China’s cities — formerly wastelands, with older people scraping a living from scraps of land — are starting to boom, thanks to soaring online trade.

Land is comparatively cheap there — the large warehouse and office space the Lis are leasing costs them just $20,000 a year, a mere 1 per cent of the cost inside Beijing — and village leaders are throwing their support behind the transformation.

The specialisations pursued by these online entrepreneurs surging into or from rural China are extraordinary.

In Shandong province, for instance, one village now hosts the country’s biggest hub for supplying party costumes, for both children and adults, to China and the wider world.

Dan and Zhong met in Beijing after shifting there in search of a better future. They and their peers were until recently abandoning Chinese villages to the very old and the very young. Parents and grandparents looked after the children whom workers could not keep in their factory dormitories.

But the Lis are among the pioneers setting a new trend: going back to the countryside.

Dan said: “We picked on diving because of its fast growth. Chinese people have become more enthusiastic about travelling, and they love dive destinations like the Maldives.”

Dan and Zhong watched their friends start to buy online. They saw this trend coming. But to surf the wave, they needed to lease a large space at a low rent, inconceivable in Beijing.

They set up their business there in 2012, starting with 10,000 yuan — about $2000, mostly borrowed from relatives — for office equipment and to buy dive gear direct from factories.

Zhong said: “It was very hard at first. We made almost no sales for almost half a year, then began to pick up a few orders a day, until our present volume.”

They employ about 20 mostly young people in Mafang Cun, who work in two shifts so they can answer customer queries and keep the packaging process going from 8am through to half past midnight.

Zhong said: “We are hopeful that more young people from the village will join our team over time, as our business grows, so they don’t have to pack up and go to Beijing as we once did.

“We are already one of the biggest employers in the area.”

In total, they stock almost 10,000 different items.

The Lis have developed a long-term partnership with a logistics company, which sends a truck to pick up their goods for delivery every day at 6pm. They are dispatched the same day the order comes in, and Zhong said they were delivered within three days of placing the order, anywhere within China.

“There’s no doubt online commerce has made our business possible,” he said. “And there are many similar companies starting up in the countryside all around Beijing now — the opposite from the way China began its economic reform era 35 years ago, from city centres out.”

Source: The Australian Business Review. Date: 2017-07-14

No rapid rise of US beef exports to China expected as market opens

The first consignment of US beef to be imported by China in 14 years is just days away from arriving in the country following a trade deal reached between the two countries that once again puts the meat on Chinese tables.

On June 12, US beef was added to the list of products eligible for export to China after a meeting in Florida between Chinese president Xi Jinping and US president Donald Trump in April. It ended a long-standing ban on US beef imports by China following a 2003 case of mad cow disease in the United States.

However, although the news was received with excitement by China's cold chain industry and meat distributors who are expecting growing interest from consumers, the short-term demand as the market opens is not expected to be high.

“China is not good at cooking steak,” was how Zhang Taixi put it. The general manager of China’s largest meat processing company Shuanghui Group told the Global Cold Chain Summit in Dalian that a survey conducted by the company found that the country’s consumers had little appreciation for steak.

“It will take time to develop this market because usually the beef that is consumed goes into hotpots or cold dishes and the percentage of steak consumption is still low. Maybe in 10 years there will be an increase in consumption, but it will not be a rapid one.”

The largest markets for containerized US beef exports, which rose 5.9 percent year over year in the first five months of 2017 to 28,000 TEU, are Japan, South Korea, Hong Kong, and Taiwan, which together controlled 78.8 percent of the market in 2016, according to PIERS, a sister product of JOC.com. Total containerized US beef exports rose 12.8 percent year over year in 2016.

Most of the beef imported by China goes into the meat processing factories with just 20 percent consumed by the public. But the beef being imported from the United States is far more expensive than from Brazil  or Australia, China’s main suppliers.

US Meat Export Federation president and CEO Philip Seng explained why. He said it was important to note that the market-opening agreement included requirements that would involve a period of adjustment for the US industry.

Those requirements include insistence from China’s General Administration of Quality Supervision Inspection and Quarantine that the US beef is from cattle younger than 30 months and that the animals must be traceable to their birth farm to ensure the safety and quality of the imported meat. The regulator said cattle should be born and raised in the United States, or born in Canada or Mexico and slaughtered in the United States, and should not be the offspring of those that were suspected of having mad cow disease.

“Meeting these requirements will add costs and this will mean that US beef is priced at a premium compared to other suppliers in the market,” Seng said. “With that said, China holds exciting potential for the US beef industry and for buyers in the market who have waited a very long time for the return of high-quality US beef.”

Yang Miao, director of Meat International Group, said US beef was labeled as high quality and a premium product and as a result was expensive, and Chinese consumers had higher expectations of quality and safety of the meat than they did for Brazilian or Australian products.

“With the US market opened there will be less smuggled beef entering China and that will help with food safety,” he said. “But in the short term, the demand for US beef imports will not be very high, although it will grow and China will in the future become a large procurer of beef,” he said.

US beef exporters can also benefit from rising Chinese wages, which on average rose 7 percent year over year in urban areas last year, according to IHS Markit data.

Frank Fang, senior director supply chain for Wal-Mart (China), said even though US beef cost more than meat imported from other countries, it would not slow a growing taste for steak among more affluent consumers.

“The beef is good quality and there is increasing demand from the high end of the market,” he said. “We may be a pork-eating nation but China is consuming more meat and beef consumption is increasing.”

Source: Joc.com. Date: 2017-07-14