Philippines beef imports from UK expected to be worth over US$44mn
The UK and the Philippines have struck an export deal worth GDP£34mn (US$44.21mn) to put British steak on Philippine plates over the next five years.
In addition to the wider agreement signed on 9 August, Northern Irish beef worth GDP£5.5mn (US$7.5mn) will be exported to the Philippines after the World Organisation for Animal Health formally endorsed Northern Ireland as an area of neglible risk for cattle disease BSE.
The announcement by the Department of Environment, Food and Rural Affairs (DEFRA) and the Agriculture and Horticulture Development Board (AHDB) of the UK was welcomed by Northern Ireland’s Chief Veterinary Officer, Robert Huey, who commented; “I am delighted that the Philippines has granted approval for Northern Ireland plants to export beef to their markets."
“This welcome step follows concerted efforts by DAERA’s Veterinary Service Animal Health Group over the past few years, working closely with DEFRA colleagues in London and Manila to negotiate approval, and with the industry in Northern Ireland – which hosted inward inspection visits by Filipino veterinary officials.”
Dr Phil Hadley, AHDB’s International Market Development Director, said: “We are delighted the Philippines has approved UK beef exports, a market we already export pork to. The decision indicates future expansion for UK agriculture and our growing export markets globally.”
Farming UK reported on the event, stating that the Philippines is the largest food and drink market in south east Asia with meat consumption expected to grow by ten per cent over the next five years.
Source: Far Eastern Agriculture. Date: 2017-08-16
India selling more shrimp to US at Indonesia’s expense
US shrimp imports rose 15.6% in June year-on-year with major increases coming from India and China as imports from Indonesia, Ecuador, Thailand and Vietnam slid, recently released statistics show.
The US imported 53,394 metric tons of shrimp in June 2017, compared to 46,187t, a year earlier, according to data from the National Oceanic and Atmospheric Administration (NOAA). By value, June 2017 imports totaled $513.5m, a 22.5% rise over the $419.3m seen in June 2016.
For the first six months of 2017, imports -- which include all shrimp species and product forms and include value-added products like breaded shrimp -- totaled 286,769t worth $2.75 billion. That marks a 8.5% increase by volume and a 14.6% rise in value over the same period in 2016.
Prices are rising too. In June 2017, the average price of shrimp imports was $9.61 per kilogram. In June 2016 that same kilo only cost $9.06.
Exporters relative share of the market has shifted. By volume, seven countries made up over 90% of US shrimp imports during the first six months of 2017.
These are India (30%), Indonesia (20%), Ecuador (13%), Thailand (10%), Vietnam (8%), China (7%) and Mexico (3%).
During the first six months of 2016, Indonesia had the largest market share (22%), followed by India (20%), Ecuador (14%), Thailand (13%), Vietnam (10%), China (6%) and Mexico (4%).
This comes as Indian farmers are seeing farmgate prices so low that some are struggling to break even.
Source: Undercurrent News. Date: 2017-08-16
Sino Agro secures more financing for shrimp mega farm, but Q2 revenues down
Chinese agricultural investment company Sino Agro Food said its shrimp 'mega farm' received more financing during the second quarter of 2017, which will help towards the completion of Aquafarm 4 and Aquafarm 5.
Based in Guangzhou, Guangdong Province, Sino Agro said it secured a CNY 100 million ($15m) credit facility from the Agricultural Bank of China, and was assigned the strongest credit rating, 5A-1, from Dun & Bradstreet, a business services company headquartered in the US, during the period.
"These milestones confirm Tri-way’s credit worthiness, clean balance sheet, and its risk averse approach, all of which support our confidence in Tri-way’s ability to secure additional financing to complete the build out of Aquafarm 4 and to commence the construction of Aquafarm 5," said the company.
The firm said that during the quarter it also implemented several initiatives aimed at improving financial discipline across the business to support a sustainable and cost-efficient business model, "such as concentrating on increasing free cash flow at Tri-way by optimizing operations at each aquafarm in terms of product mix and [A Power Recirculating Aquaculture System] performance."
Earlier this month Sino Agro said it is now farming pearl grouper, a tropical marine species, and empurau, a fish native to Malaysia, at Aquafarm 1 and Aquafarm 2 respectively.
According to the firm, Tri-way intends to exploit pearl grouper's fast growth-rates to cash in on strong demand from Chinese restaurants, and use the super-premium market price for empurau to raise the profile of Tri-way's brand.
Sino Agro spun off its shrimp 'mega farm' in March of this year in a sale worth $340.6m, although it remains the largest shareholder with a 36.6% stake.
At the time, it said separating into two groups -- one focused on the aquaculture industry and the other focused on investing in technology-based agriculture initiatives with substantial growth potential -- would generate "significant value for shareholders".
However, with revenues from the farm stripped out, overall Q2 revenues at the firm were down 17% to $47m, compared with the corresponding period last year, according to the firm's financial statement. Gross profit was $6.5m, down 35% year-on-year, while gross profit margin was 13.6%, down 3.8 percentage points.
The fall was driven largely by a weak performance in its engineering and beef trading segments.
“We experienced a decline in sales this quarter due to a shift in market demand toward newer sources of imported beef. We adapted to the influx of Australian beef by importing it to the Shanghai Distribution Center, and in Xining for value added processing.
"Now, new imports offer a further competition, offering us the same opportunities, after a transitional period," said the firm.
Seafood sales strong
Once fully completed the Zhongshan farm will be the world's largest shrimp production facility in the world, with production rising up to 200,000 metric tons of shrimp per year.
Sales at Sino Agro's separate seafood trade business were up by $2.3m, while gross profits increased by $180,000. This made it one of only two business segments which saw revenues rise during the period.
The firm said that it would aim to increase seafood imports in Q3, exploiting China's shortfall in supply.
"In the interim, China is short in seafood supply with demand increasing each year. The current shortfall is running at some 6-7m metric tons per year."
"In this respect, the locally grown seafood and imported seafood trade has strong potential to increase the company’s sales revenue and profits, such that the plan is to increase import seafood trading starting in Q3," said the firm.
Source: Undercurrent News. Date: 2017-08-16
High-tech farming development sluggish
The development of high-tech agriculture in Vietnam remains sluggish due to unplanned and small-scale production, and is not commensurate with the country’s comparative advantages and efforts.
So far, only 28 enterprises nationwide have been recognised by the Ministry of Agriculture and Rural Development (MARD) as high-tech businesses.
At a conference held on August 14 by the MARD in the Central Highlands province of Lam Dong’s Da Lat city, participants agreed that development of technology-based agriculture is essential for Vietnam’s agriculture sector to achieve greater value-added for export products, global competitiveness and consistently high quality.
Speaking at the event, Deputy Minister of Agriculture and Rural Development Le Quoc Doanh said over the past three decades of renovation, Vietnam has become self-sufficient in food with an annual export of 30 billion USD, providing livelihoods for 10 million rural households and contributing nearly 22 percent of the gross domestic product and 23-35 percent of exports.
However, the agricultural sector tends to grow slowly due to spontaneous and small-scale production, limited technological application in agro-forestry-fisheries enterprises, and impacts of climate change, environmental pollution and food hygiene, he said.
The Government has adopted various policies to promote the development of high-tech agriculture. In 2012, for example, the Prime Minister issued Decision 1895 approving implementation of an agricultural development programme using high-tech applications.
The programme aims to promote the development and effective application of high technology in the agricultural sector, contributing to the development of a large-scale, modern, and highly competitive and comprehensive agriculture model.
It also targets an annual growth rate of over 3.5 percent in the agricultural sector while ensuring national food security.
In 2015, the PM signed another decision approving the master plan to build 10 high-tech agricultural zones by 2020.
But in fact, by mid-2017, the whole country has only two high-tech agriculture zones, established in the southern provinces of Hau Giang and Phú Yên.
During the conference, participants hailed Lam Dong province for being on the way to becoming a model of high-tech farming.
The province has tremendous potential to attract more foreign investment in high-tech agriculture due to its climate, land and proximity to the southern economic region.
By applying technology in cultivation, the average value of hydroponic vegetables grown in the province has reached 500 million VND per hectare per year, and the value of flowers touches 1.2 billion VND per hectare per year. The figures for tea and coffee are respectively 250 million VND and 240 million VND per hectare per year.
Many farm produce of the province have been exported.
However, according to Nguyen Van Son, Director of the provincial Department of Agriculture and Rural Development, farmers and businesses engaged in high-tech agriculture in the province still face many difficulties relating to land funds, shortage of investment, and access to investment capital.
A representative from the Ministry of Natural Resources and Environment’s General Department of Land Management underscored the need to refine regulations on the rights of land users and issue policies to encourage the rent of land use rights.
According to the State Bank of Vietnam (SBV), outstanding loans for high-tech farming amount to 177.4 billion VND (7.71 million USD), but farmers are hard pressed to pay them back due to lack of information about domestic and foreign consumption markets. The SBV directed commercial banks to offer more loans and pledged all possible support throughout the process.
At the conference, the MARD presented certificates recognising DaLat Hasfarm and An Phu companies operating in Lam Dong as high-tech agricultural firms, and recognised Thai Phien high-tech agricultural zone in the province.
Source: VNA. Date: 2017-08-16
China deadline for dairy exporters of infant formula
The clock is ticking for Australian infant formula producers to complete a suite of new regulatory hurdles, in order to be able to keep selling their powder in China after January 1.
So far, it was announced this week, only 40 per cent of the present exporters of formula to China — from all international sources, the Australian proportion is not separately available — have filed applications for the new registrations required.
A spokesman for Australia’s Department of Agriculture and Water Resources told The Australian that the China Food and Drug Administration had not provided a specific timeframe on how long it required to assess an application for brand registration.
But he said: “We have made sure our industry is aware the process can take several months, to ensure they are prepared.”
Dairy manufacturers worldwide must first undergo an audit by the Certification and Accreditation Administration of China, which approves the business to manufacture particular products for the Chinese market, such as liquid and powdered milk.
Once registered and listed with the CNCA, any infant formula products must gain separate registration from the CFDA, effective from January 1.
The Australian Agriculture department said that “failure to get approval from CFDA by January 1 doesn’t mean companies are permanently excluded from China. They will still be able to send product to China once they receive approval.”
But such a failure would mean a hiatus during which many competitors’ products would be available instead. And formula users of course can have no hiatus, they must keep buying.
So far, eight Australian infant formula manufacturers had gained registration from the CNCA, while a further seven were awaiting the outcomes of audits by the regulator, the DAWR spokesman said.
The new requirements were issued last year, and Beijing-based research body China Policy said that at a recent meeting organised by the CFDA the authorities stressed that the grace period would not be extended.
So far, the meeting heard, 665 applications had been received by the CFDA from 75 Chinese and 26 international companies. The organisation had requested further information from 168 of the applications from 42 of the companies, both domestic and foreign.
The first batch of 89 formula products made by 22 companies — chiefly the largest in China and globally — has been announced recently. They include five foreign companies, but as yet no Australian firms. Applicants must provide such extra information within three months — a period which, from now, would mean a conclusion of the application process a perilous few weeks away from the January 1 deadline.
Liu Xuecong, the secretary-general of the China Nutrition and Health Food Association, explained that while the larger, high-volume companies had filed their applications swiftly, smaller firms without the legal experts needed to guide the complex process — especially those that sell chiefly through cross-border e-commerce channels — “have been more hesitant”.
Up to 300 small formula producers in China went out of business last year, and others are following in 2017, with even more set to follow if they are shut-out of the market for failing to gain registration by January 1.
But the DAWR spokesman was optimistic about the new registration process ultimately providing an enhanced opportunity for Australian formula manufacturers, since “they have a well-deserved reputation for producing safe, quality and highly desirable products”.
China has initiated this registration process because its consumers today have about 2000 formula brands from which to choose — resulting in a highly fragmented market and a major challenge for the Chinese regulators, which are expected to rapidly improve the quality and safety of the country’s food products.
The CFDA is thus seeking to improve control over the number of brands and formula produced by each plant, and to ensure that each formula is unique. Labelling is also to be tightened, with the country of the product’s origin to be displayed clearly.
Australia alone provides dozens of brands of formula for sale in China, many of which are made by the same factories, and some of which are not even available back in Australia.
Each formula canning plant — in China or overseas — is being limited to producing three CFDA-approved brands. This has led to intense negotiations between the smaller players, especially, and their suppliers, in order to be chosen as one of those brands.
The plants will consolidate their trade into fewer, larger accounts, mostly run by major, capable brands, and are thus unlikely to suffer as long as they ensure their registrations are completed in time. The main pressure in this process is coming on the brands.
The new rules apply to the channels that supply most of the Chinese market: conventional retail and the giant domestic online platforms.
They will not immediately affect infant formula bought via cross-border e-commerce or from daigou — proxy retail buyers in Australia who send straight to consumers — which is treated temporarily as “personal items”.
Only about 5 per cent of China’s online purchases are made via these latter routes, but they have been used disproportionately by smaller Australian formula brands.
The Chinese authorities tightened cross-border e-commerce regulations in April last year, so that this has become one of the most closely supervised routes to market.
Since daigou largely operate outside both systems, they remain a likely future target for regulators looking to close loopholes.
The prospects for Australian products that correctly negotiate the new paths to Chinese markets remain bright.
A survey of 1000 Chinese online shoppers published last week by FedEx Express found they had each spent almost $1000 each on Australian goods in the previous year. Australian dairy products were viewed as world-class by 58 per cent of those surveyed.
Source: The Australian. Date: 2017-08-15
Seven UK firms get green light to export pork to China
Seven additional UK businesses have secured market access to China to export pork products.
The Chinese authorities have approved exports from five new sites in Suffolk, Lincolnshire, Derbyshire, County Antrim and County Tyrone.
Defra claims the deal could be worth £200m in total and support 1,500 jobs.
Nine producers already export to China, with sales of pork products worth £43m last year.
In a UK first, three of the new businesses given the green light to start trading will be exporting pigs’ trotters.
Northern Ireland
The deal means Northern Ireland will for the first time be able to take advantage of the growing demand for British food and drink in China.
The Department for Agriculture, Environment and Rural Affairs (Daera) said shipments would not start for another two to four weeks while the correct administration was put in place.
However, suppliers could start to pack product with a view to exporting it.
Robert Huey, Daera chief veterinary officer, said: “The commencement of pork exports to China, including exports of trotters, will represent a major boost for the local pork industry.
“It will expand markets and secure jobs.”
The Ulster Farmers Union described it as a big win for the industry, as it would add value to carcasses.
Improved returns
UFU pork and bacon chairman Norman Robson added: “Access to this market should boost returns for processors.
“Farmers will now look forward to seeing this added value distributed fairly along the supply chain.”
The deal follows a series of inspections by representatives of China’s Certification and Accreditation Administration (CNCA) team, plus separate checks by the General Administration of Quality Supervision, Inspection and Quarantine of the People’s Republic of China (AQSIQ).
Source: Farmers Weekly. Date: 2017-08-15
Factory farming in Asia creating global health risks, report warns
The use of antibiotics in factory farms in Asia is set to more than double in just over a decade, with potentially damaging effects on antibiotic resistance around the world.
Factory farming of poultry in Asia is also increasing the threat of bird flu spreading beyond the region, with more deadly strains taking hold, according to a new report from a network of financial investors.
Use of antibiotics in poultry and pig farms will increase by more than 120% in Asiaby 2030, based on current trends. Half of all antibiotics globally are now consumed in China alone. The Chinese meat and animal feed producers New Hope Group and Wen’s Group are now among the 10 biggest animal feed manufacturers in the world.
Industrial meat production is killing our seas. It's time to change our diets
The growth of Asian meat production in intensive units is also producing a rise in greenhouse gas emissions from the food chain, with emissions likely to rise by more than 360m tonnes, the equivalent of running 100 coal-fired power plants for a year. There are knock-on impacts such as deforestation, as China’s need for animal feed is responsible for more than a third of Brazil’s soybean production.
The report, Factory Farming in Asia: Assessing Investment Risks, comes three years after a meat scandal in China, in which suppliers to McDonalds, KFC and others were found to be using dirty meat and products past their sell-by date. It also comes in the midst of a growing food scandal in Europe, which has required the recall of millions of eggs tainted with harmful chemicals, and as concerns have been aired over the impact of Brexit on imports of farm products to the UK. Asian food companies have rapidly expanded their meat production in response to growing populations and the tastes of the rising middle class, but this expansion has come to the detriment of food safety.
Jeremy Coller, of Coller Capital, said: “Investors have a big appetite for the animal protein sector in Asia. But the growth is driven by a boom in factory farming that creates problems like emissions and epidemics, abuse of antibiotics and abuse of labour. Investors must improve the management of sustainability issues in the Asian meat and dairy industries if they want to avoid a nasty bout of financial food poisoning.”
However, the report also found that deploying modern techniques could assist in reducing the impact of factory farming – for instance, by using barcodes to enable consumers to check the provenance of eggs, by reducing greenhouse gases and improving the health of livestock.
Avian flu is an increasing threat, with the latest strain to take hold in China, H7N9, proving more deadly than previous strains. It has already killed 84% more people in the four years since its emergence than the H5N1 strain that came to public attention in 2006. Affected industries in China include suppliers to McDonalds and Walmart. An outbreak of bird flu in South Korea in 2016-17 resulted in the cull of a fifth of the country’s flock.
The growth of Asian meat production in intensive units is producing a rise in greenhouse gas emissions Photograph: China Photos/Getty Images
The authors of the study recommended that investors assess the risks of food production in the assets they hold, as financial firms can persuade the companies they fund to make improvements in their supply chain. But they said awareness among investors was currently too low and should be raised.
Previous food scandals have damaged the finances of multinational companiessuch as McDonalds and KFC. Jaideep Panwar, sustainability and governance manager at APG Asset Management Asia, said: “[This] reminds investors to keep a close eye on the long-term risks of food assets in Asia.
“The evolution of what are now early stage regulatory moves in Asia, supplier conditions introduced by international brands and import restrictions can have an impact on the productivity of Asian producers and their access to markets. Investors will assess the ability of companies in the meat supply chain to position themselves ahead of these risks.”
Melissa Brown, partner at Daobridge Capital in Hong Kong, added: “Few issues are as politically sensitive in Asia as food safety. Yet far too many food sector equities have been priced as if [these] risks don’t matter and that good risk management won’t be recognised in the market.”
The report was published on Monday by the international investment network FAIRR and the Asia Research and Engagement consultancy.
Source: The Guardian. Date: 2017-08-15
Vietnam tops ASEAN in animal feed production
Vietnam is currently ASEAN’s biggest animal feed producer and the tenth biggest in the world, according to the Husbandry Department, Ministry of Agriculture and Rural Development.
The country has more than 300 animal feed factories and over 200 facilities producing supplementary food, with total capacity of 31 million tonnes per year.
Vietnam’s animal feed output increased from 400,000 tonnes in 1993 to 23.15 million tonnes in 2016, the world’s fastest growth in scale and production over the last 20 years.
The Husbandry Department asked localities to limit the expansion of animal feed factories, especially in the Red River Delta, the southeast and the Mekong Delta.
Source: VNA. Date: 2017-08-15
China's dairy industry endeavors to regain public trust
Wearing a pedometer to ensure a good amount of exercise, getting a manicure regularly to increase comfort levels, listening to romantic background music and showering several times a day to keep clean and cool - this is the life of a cow in Shanghai.
In fact, this not only takes place in one of Bright Dairy's farms in Shanghai's Jinshan district, but also has become a standard practice in many of the large-scale dairy enterprises in China.
Keep fresh
"Good milk must come from close to home," Jin Danjie, head of the Jinshan farm, explained that the world's dairy import and export map shows that in most countries the best fresh milk is largely locally produced.
Imported milk is not always higher quality. In order to allow a longer shelf life for long-distance transport, imported milk is often ultra high temperature (UHT) treated, which decreases the nutrients and enzymes.
"The level of active protein in imported milk is lower than that of domestic milk," said Wang Jiaqi, director of a quality inspection center for dairy production under the Ministry of Agriculture.
Some 154 batches of 10 different brands of imported dairy products from 19 countries failed to meet China's national standards and were returned or destroyed in 2016, Wang said.
The reasons for the failures ranged from having excessive amounts of mould and coliform bacteria, to containing illegal food additives or being past the expiration date.
A report released by the Dairy Association of China and the Ministry of Agriculture last month showed that 99.8 percent of domestically produced fresh milk and 99.5 percent of dairy products checked were up to standard in 2016.
Ensure quality
At Jinshan farm, detailed files record information of cow's birth dates, weights and skin patterns.
"The application of this advanced information management mode helps farm workers monitor the health of cows," Jin said. "The workers can detect abnormal behavior or even diseases at an early stage via data fluctuation.
The farm has also formulated a healthier feed providing optimal nutrition for the cows.
Even during the summer heat wave, the farm smells good. It has invested in machinery to separate solid and liquid waste. Solid manure is turned into organic fertilizer and liquids go directly go into city sewage system.
According to Jin, the average milk production per cow has risen from 6 tons to almost 11 tons per year, reaching the levels of developed countries. The fresh milk quality also meets EU standards.
"We hope that after years of ongoing effort, we will eventually win the trust and support of domestic customers," Jin said.
Build trust
"I prefer to purchase domestically produced fresh milk," said a Shanghai resident surnamed Zhou. "As far as I know, the shorter time from production to use makes the milk fresher and more nutritious."
The longer shelf life of imported dairy products offsets the time taken to transport them from overseas countries and go through customs inspection, said Cao Mingshi, vice secretary-general of the Dairy Association of Shanghai.
"It does not bring any benefits for consumers," Cao said.
"I believe China's dairy industry is on the right track," he said.
Source: China Daily. Date: 2017-08-15
Contract cattle kills sought by beef company, with sights set on Chinese supermarket trade
The demand for cheaper supermarket beef in China has prompted a new Australian joint-venture to directly source and process cattle for boxed export.
While the vertically integrated business model is already used by larger agribusinesses, Spinifex Beef does not own infrastructure or breed its own livestock. Instead it purchases cattle from producers and has the meat processed and packed on contract by existing abattoirs.
Supported by the 3 Mark Group, which already exports chicken and seafood to Asia, the company hopes to capitalise on existing customers to sell its beef.
Spinifex Beef has only sourced cattle from Queensland to date, but hopes to expand further, particularly into northern Australia.
Chief executive Ian Bradford said the company was targeting supermarket clientele as its market segment in China.
"We're after a 500-gram-sized piece of meat, pre-packed here in Australia, labelled here in Australia, sent to China and pulled straight out of the chilled boxed onto the shelf," he said.
"It's a good model given we've got established clientele up there already."
While agribusiness Elders is already well-established in the Chinese market targeting the high-end restaurant trade, companies operating out of northern Australia such as Hancock Pastoral and Australian Agricultural Company have taken steps recently with the intention to export live cattle and boxed beef to China respectively.
However the high price of cattle, and lack of available supply, make it difficult for firms to meet the much-heralded hunger of the Chinese.
Even if Spinifex Beef could source more stock from the north, Mr Bradford said there was a lack of available accredited processors.
"We're hamstrung — we'd like to do a lot more out of the north without a doubt, however it's just a lack of facilities," he said.
"The type of meat that we'd like to produce for the supermarkets is more suited to come from our northern cattle because of the fat content.
"It's a non-fat cut, very similar to the South-East Asian preferred type of meat that is boiled in a pot."
While AACo's Livingstone Beef processing facility near Darwin is currently seeking accreditation to access China, some other beef processors in Australia suffered a setback recently — hit with a temporary export ban.
Mr Bradford said he would like to engage with northern processors to have them slaughter cattle on a contract basis.
"Hopefully on the horizon we can organise a facility or get a facility across the line that can be accredited to go straight into China," he said.
Source: ABC News. Date: 2017-08-14