Noon International: Food Trading Import Export

Here is an update on the broccoli and cauliflower situation in China from my China friend. 

Broccoli

North areas – Shandong Province
Harvest so poor we can consider this as no harvest, nothing to offer.

Middle Eastern China – Zhejiang and Jiangsu Province

Peak season for frozen will start in about 15 days.  Growers planted more this year than last but lost a lot during the typhoon in November (krosa), consequently supply will be about the same as last year.  Currently what is available today is costing about 3.00RMB (Renminbi) per kilo versus the normal 1.00 – 1.20RMB per kilo.  We predict the average price for this year will be around 2.00 – 2.20 per kilo.

South China – Fujian and Guangdong Province
The season will not start until late January 2008. So far the growing conditions are normal.  At present we don’t have any price indication but we feel broccoli will definitely be higher than last year.

Overall the total harvest from China will be 20-30% short (or lower than last year).  Prices will be higher due to shortage, raw material cost, labor and energy cost.

Cauliflower

North areas – Shandong Province
Harvest is so poor we can say no harvest or no quantity to offer.

Middle Eastern China – Zhejiang and Jiangsu Province
The total harvest will be about 40-50% short (or less than last years crop).  The season will start in about 20 days.  So far the weather and growing conditions appear to be normal for the month  of December.  The average raw material cost last year was 0.80 – 0.90 RMB per kilo.  We are predicting that this year the average raw material prices will be around 1.80 – 2.00RMB per kilo. 

South China – Fujian and Guangdong Province
Planting area is the same as last year.  So far the growing conditions are normal with the season starting late January 2008.  We predict the harvest will be the same as last year with the only question being at what price.

Of particular note is the white color of the cauliflower.  The best color is in the North, followed by the Middle Eastern areas and lastly in the South where it may have a little yellowish tinge.

Again the overall harvest for China will be short and prices will be higher this coming year for the same reasons as broccoli.
 
Of particular note is the Japanese.  They are large users of the broccoli and cauliflower from China as well as from other parts of the world.  With Mexico having problems and China having problems it is likely that we may see the Japanese bid up the price of broccoli and cauliflower to secure the quantities needed.

For those interested in frozen broccoli or cauliflower from China now is the time to act to secure quantities needed.

 

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What is happening in China with the new CIQ procedures 3 months after the start of the new program to monitor frozen vegetables and fruits. What can we the importers expect? Delays and more delays are a constant problem. For us living in the JIT (Just In Time) world how does it impact us?

The problem we encounter now is the CIQ itself. Each CIQ office from the province, county, or city acts as an autonomous unit. What one province does or test another may or may not do. And the CIQ offices located at the ports do their own inspection. This means that we have at least two inspections prior to exportation or a minimum of two delays to our shipments and nothing ships with out the CIQ chop (signature) of approval.

If we look at the province of Zhejiang, the CIQ will inspect the cargo prior to exportation and check primarily for pesticide and microorganisms. This will cause delays for shipments as the supplier has to wait for the results from the CIQ who is not only inspecting their product but many others, which means delays in the labs to get results. And then we would have another inspection, such as Shanghai port, where the CIQ would check again to make sure all the documentation matches the manifest log itself.

For us living in the JIT world this means delays of minimum of 2 or 3 weeks for shipments. In the past, it took us from the time shipping instructions were given, to shipment of the goods, to arrival would be about 4 weeks to the west coast of the US. Now with the inspections we are looking at 6 to 7 weeks away from our customers. Inventory planning and control becomes more unpredictable.

Although the intent in China is to ensure food safety with the CIQ checks, it creates problems for us in the food supply chain to deliver in a timely JIT fashion to the customer. With more delays it means that the customers must increase their inventories to allow for delays or risk being out of stock. Either scenario is not good for the customer.

It is time for China to revisit their procedure and come up with a new method to increase the speed of monitoring and allow for JIT shipments once again.  Until then we must learn to live with delays.

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