Noon International: Food Trading Import Export

When is a contract a contract?

The steamship companies are  very creative in their ability to use surcharges.  They have CAF (currency adjustment factor), Pss (peak  season  surcharge), EBS (emergency bunker surcharge) and the list goes on. 

The reason I mention this is because we have just entered the Peak Season Surcharge time frame from August 1 through Oct 31.  We at Noon International negotiated several months before a contract with the steamship company that was (or we thought) was to be an all inclusive rate from China to Australia.   The rate would  be fixed with no increases for surcharges of any sort. 

Well, we were advised in early August that we would be subject to the surcharge of $500 per 40 ft container load.  We argued with the steamship company but it was hopeless.  We could pay the $500 and get the bill of ladings or not pay and have the cargo sit in China.

PaiPai in our office negotiated diligently and got them to reduce the rate from $500 to $250 for the PSS season, for which we had to sign an amendment.  This was to go into effect immediately but the steamship office in China claims they were never notified, hence,  the rate remains $500.  After much more going back and forth it now appears that we will get the reduction but no rebate on the containers we already had to pay the $500 PSS.

Now I wonder if all other companies that use the steamships are paying $500 and we only $250 who will get the containers? 

We are at the mercy of the steamship companies, if we were to take legal action and win, we would more than likely get no containers.  I just wonder if we could pass on the PSS to our customers?  Not very likely.

So when is a contract a contract?

Technorati Tags: Noon International, PSS, surcharges, ocean freight, China

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The China CIQ saga continues and we still have yet to come to the official start date of September 1.  I am hearing that the CIQ is already implementing some restrictions on exports as well as imports and some US companies products being blacklisted or banned.  They currently have punished some factories for exporting product that was rejected by the importing  country for pesticide, or microbiology, or other rejections such as foreign material.  Initially, after the first violation they will not allow the factory to export for 3 weeks (or other specified time) and ask for corrective action and it is not clear what will happen if corrective action  can not  be accomplished in the time frame given by the CIQ.  In addition to the factory, they will also restrict all the growing fields vegetables (which had CIQ registration) from being exported.  It is not clear as to how long  the fields would be restricted and what they would have to do to be re-registered by the CIQ.

 Another side of the problem is that because of the pressure from all the foreign countries on quality issues the China government is setting up new regulations daily which is driving all the CIQ staff crazy.  Factories maybe shut down for months if the product is rejected by any foreign country, but it might be restricted from exporting only to that country while still being able to export to other countries.  Everything is still unclear and it may change from region to region as the CIQ implement their own rules.  Some of the CIQ’s staff are trying to make it very difficult for exporting factories because if they have a rejection it not only hurts the factory but also the CIQ staff will be punished with no chance of promotion.  Hence the CIQ would prefer not to have any exports to eliminate their own risk of being punished.

With each province and local CIQ implementing their own regulations, it reminds me very much  of a book I just read, “Will The Boat Sink The Water? The Life Of China’s Peasants” by Chen Guidi and Wu Chuntao.  The book tells several stories about the peasants problmes with the local government and how the local and provincial government dictated their own tax laws that were contrary to the central China government.  It relates sevearl stories and very interesting to read and get a better handle of the  inner workings.  The book was originally published in China but later banned.   Is their a correlation?

Technorati Tags: Noon International, China CIQ, CIQ, pesticide, imports, exports

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China is committed to cooperate and improve food safety and safety of other consumer products not only in the international arena but domestically as well. The government has already developed a “blacklist” over 400 exporters – companies found to be violating laws and regulations with regard to quality and safety of consumer products and punished many of same.  In addition, there are an estimated 448,000 food processing businesses in China of which 353,000 have 10 employees or less and over half are not certified or properly certified.   Li Changjiang, head of AQSIQ recently said: “There are many small food manufacturers making a wide range of products under poor conditions. The quality of their products is not stable and sometimes substandard”.  The government is committed to the clean up.

It took the issue of tainted wheat gluten in pet food to prompt the most massive recall of retail pet foods and treats in U.S. history which in turn opened the flood gates of reports world-wide of similar cases ranging from toxins in cough medicine in Panama to toothpaste containing the thickening agent diethylene glycol.  By the way, two companies responsible for shipping the tainted wheat gluten to the U.S. have now had their export foreign trade licenses revoked.

Technorati Tags: food safety, blacklist, Li Changjiang

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The China government has just concluded another meeting concerning China Food Safety and its importance.  Rather than synthesize please read the entire white paper titled China food quality and safety.

Technorati Tags: China Food Safety, Food Safety, China

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Can the new food safety standards be enforced?

Reaching an agreement to improve food safety is only the beginning – enforcing it successfully is a much greater problem.  Why?

• the tangled web of the Chinese regulatory system – not only do we mean  the enforcement of control measures from the central government in Beijing  down to the provincial level, but within the various agencies themselves - the SFDA,  AQSIQ and a variety of other government bodies involved in food safety. Lacking clarity and direction in the past, many situations were overlooked or ignored.  Each province or city made their own rules.  To pull it together now on a national basis will be an extraordinary feat. One must question how the government will manage to implement a special inspection system for 90% of the food producers or control the use of additives and pesticides nationwide as they have promised.

As Chinese scholar Huang Jing of the Brookings Institution group in Washington recently stated:

“We know that in China there are hundreds of laws or regulations regarding food safety, but the problem is that the enforcement is very weak, is very arbitrary and is not transparent.”

• Corruption and bribery – Certainly a very strong message was sent when Mr. Zheng, head of the SFDA was put to death so quickly, but corruption is rampant and that will not change.  The way it is done may change but the truth of the matter is that the more regulations, the more certifications, the more requirements the more corruption you will find.

(From Noon International’s “The Asian Food Brief”)

Technorati Tags: Noon  International, China Food Safety, AQSIQ, SFDA, Huang Jing

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The US Food and Drug Administration (FDA) has released data showing that India and Mexico have worse records than our flavor of the month: China.

The US FDA figures show a total of 1,763 food shipments rejected from India, 1,480 shipments from Mexico and 1,368 shipments from China in year ended June 2007.

Some of India’s spices and seafood contained salmonella while Mexico’s seafood, chili and cheese were found unsafe to eat. China presented a scenario similar to Mexico on seafood, bean curd (tofu) and noodles.

We can’t really tell the amount of rejected product since the FDA didn’t release this data, so it could have been a 1k box or an entire container load.  I think we should also put into perspective the amount of product exported into the USA from each country in order to give this analysis a bit more relevance.

Fourth on the list was Dominican Republic followed by Denmark, Vietnam, Japan, Italy and Indonesia, all of them having rejected product either for sanitary or for mislabeling reason.

Something to think about…

Technorati Tags:  FDA, India, Mexico, China, Shipments Rejected

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Okay now we have the China CIQ logo, what value will it have for me, the consumer?  Not much.

In the U.S. we have the USDA logo or bug that certifies meats, chickens etc.  What value does it have to me as a Chinese consumer? Not much.  Or what value does it have for me as a Japanese consumer?  Not much.

Logos of quality assurance are many, but what value does it have for me, the consumer?  Not much. 

How often do we pick up the newspaper or hear on TV about product that is tainted, that has a Logo for quality inspection? It is almost a daily occurance, mad cow, bird flu, e. coli and so on.  Us Beef is banned off and on in Korea, China or Japan or some other country because of BSE (Mad Cow), or lack of specific testing that is required in that country.

So why is China so keen on their CIQ logo??  What extra value or benefit will it give me,  the consumer?  Not much.  Will it create more nutrition?  Will it help my diabetes?  What will it do for my good health?  Not much.

Will I feel better about China food imports now that it has a CIQ Logo?  Will I eat more food from China with the CIQ Logo?  Will it really be safer?

Is a 3rd party audit a safer bet?

A lot of questions that only the consumer can answer because she/he is the ultimate decision maker.

Technorati Tags:  Noon International, China CIQ, BSE,  mad cow, bird flu, CIQ Logo

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Just a quick update on the CIQ Logo, (China Inspection and Quarantine), please see previous post. 

I have just learned that the Central Government CIQ came out with an announcement on August 2, 2007 stating  that CIQ Logo will not be necessary on the inner packages at this time.  They will monitor the program before making  a final decision on the CIQ Logo for the inner polybags, inner boxes, etc.

It will be interesting if this is followed throughout or if the Provincial  or Local CIQ exercise their rights and demand the placement of the CIQ Logo on the  inner polybags.

 As we at Noon International learn more we will keep updating  our blog on the CIQ Logo issue.

Technorati Tags:  Noon International, China CIQ, CIQ, CIQ Logo, China Inspection and Quarantine

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Is this the answer to calm the concern of China Food Safety? 

We have received further clarification as to the new regulations required by the China CIQ (China Inspection and Quarantine) for food products. 

All outer packaging is supposed to contain the following information to meet the CIQ’s guidelines:

1. Producer name (in Chinese), Export Quarantine Sanitarian Registered Number, Product name in Chinese, Lot number and production date to be printed or stamped on the outer carton.

2. A CIQ symbol will be added on the outer carton.  Diameter of the sticker will be 20mm, 30mm or 50mm depending on the carton size.

3. The location of above and symbol on the outer carton will be according to the local CIQ’s requirement (I guess this leaves room for ambiguity).  The location would be fixed but in no case to cover the customers information needs.

Inner package requirements if necessary:

1. A CIQ symbol would also be added to the retail packages, including retail box, pail, bags, etc.  The diameter will be 10mm.

2. If the inner package are a type of basket, sacks or other package style which is not suitable for adding a CIQ symbol, they will be exempted, but the exemption must be approved by the local CIQ of the producer. 

I wonder what this all means if the local CIQ and provincial CIQ or Central Government don’t agree?  It seems like local CIQ can have there own criteria but maybe I am just reading too much into it.
To give you an idea this is what it would look like:

Producer name (in Chinese): 银河食品 

Export Quarantined Sanitarian Registered Number: xxxx/xxxxx (total of 9 digits)

Product Name (in Chinese): 毛豆荚 

Lot number & Production date: xxxx (Julian date) or YYYY/MM/DD (year/month/day)
 

This will create some chaos as packers will have to get the China CIQ logo and all smaller packaging will probably have to get new artwork to incorporate the CIQ logo unless they sticker them but this I imagine will get messy and we will have CIQ stickers all over the place.

I guess the big question is will this new policy and CIQ logo affixed to the package give credability to China Food Safety?  And how will this be perceived by the consumer?

I hope this gives some clarity to the new requirements.  Will keep you posted on any further developments.

Technorati Tags: Noon International, China CIQ, CIQ Logo, China Food Safety, China Inspection and Quarantine

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What is happening with China CIQ Inspection and Quarantine?  This seems to be still evolving and some uncertainty as to what and when and how it will all take place.  Supposedly it will officially start on September 1, 2007 but with all the China food safety issues they have already started certain phases of the new program. 

At present the CIQ are checking product by going to packers and taking samples and testing.  This has caused delays because it is taking at least 10 working days to get answers if not longer.  We are experiencing delays up to 3 weeks on some of our shipments.

They plan on starting on September 1, 2007 to start stickering cartons.  A CIQ Logo will be placed on the outer carton to show that it  has been inspected by the CIQ and approved.  They have yet to make a decision on retail pack if it will require a sticker on the polybag as well.  Of course this will add some extra cost and delays for the stickers and manual labor to sticker.

Now I have just learned that the Beijing CIQ will be sending staff to the province to supervise food safety, and the provincial CIQ will be sending them to the county for the same purpose for a 3 month period of time for training of the new regulations.

Further they will have CIQ staff located at the ports to inspect the cargo to ensure the product has been stickered with the CIQ logo.  I am not sure I like this step because what it means is that the containers after being loaded at the factory and sealed will have to have the seals broken and resealed.  I guess because they are officials nothing can or will happen after all they are the government.

Problems we can expect for the unforeseeable future - delays and more delays. 

The big question is will it work? Will it help to solve the China food  safety issues? 

Technorati Tags: Noon International, China food safety, CIQ, CIQ Logo, China  CIQ Inspection and Quarantine, Inspection and Quarantine

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