Noon International: Food Trading Import Export

What a great way to eat your vegetables, listening and watching the Vegetable Orchestra.

Enjoy from http://www.vegetableorchestra.org/.

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McDonald’s Holding Co. (Japan) announced on Tuesday that 4 of their franchises were selling outdated salads, yoghurt and shakes, altering the best before dates.  This is just another incidence of food safety that has hit Japan recently.  

I guess one could say that increasing profits out weighs food safety.  Read the blog here.

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Why are China frozen vegetables going to be more expensive this year? 

We would like to share with you some of the reasons why we can expect increased pricing from our China suppliers of frozen vegetables.  Below is a list of 5 reasons why pricing will increase this coming year:

1. Raw material costs have risen sharply.  The China CPI has been increasing with the food leading the way.  In particular food oil, rice, pork, poultry and eggs have all increased by double digits in 2007.  We are currently witnessing high prices in the raw materials of broccoli, cauliflower and carrots in China, with prices over 50% higher then normal for this time of year.
2. Packing material cost have increased from the printers by 10 – 30% because of oil cost, labor cost, etc.
3. Labor cost will increase more this year.  One of our suppliers says that labor cost have increased by 100% over the past three years.  Also of importance is during the last CCP (Communist Party Of China) meeting in October one of the key issues was “Peoples Living Standard”.  They will focus on improving living standards, workers working conditions, and work time.  In some areas of China the minimum pay for the factory workers was increased in October of 2007 by 100RMB per month per worker.
4. The RMB continues to appreciate against the dollar.  Some China banks are estimating that the RMB will increase to 6.3 to 6.8 RMB to the dollar in 2008. 
5. Interest rate cost have been increasing as the China government trys to cool the economy.  The current rate is 7.85% with more increases being predicted in the near term.

Also of major concern are the rumors that the China government will cancel the tax refund for vegetable exports.  If this happens it would have a dramatic impact on frozen vegetable pricing.

Is it any wonder that prices are rising? 

Technorati Tags: Noon International, frozen vegetable, RMB, China, CCP


 

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China is just starting their production of Frozen Cauliflower and Broccoli in Zhejiang and Shandong provinces.  Thus far because of weather conditions product is very limited.  The acreage and yields were first impacted by Typhoon Krosa and now they are experiencing colder than normal weather. 

Broccoli which would be normally in full swing in Zhejiang is hard to come by.  The raw material cost is over RMB3.00/kg compared to the normal RMB1.70 to RMB2.00/kg.  The flower or crown of the broccoli is none existent as seen by the photo (click here). 

In Shandong province were they had intended to increase cauliflower production this year because of the nice white color they get in this area, will get very little.  At this point it appears (and they are more advanced into their season then the Zhejiang area) that they will only be getting 10 – 20% of their expected yields.

Fujian the other major growing area for frozen broccoli and cauliflower will not start until late January and run through March.  Will it come to the rescue and help to alleviate the shortfall of Zhejiang and Shandong or as my old friend tells me, “God is fair to all”. If this is the case then Fujian will also encounter problems and China will be in for a very difficult year.

 Beware of whom you buy from.  One supplier in China called another and asked him, “how much cauliflower can you supply me with?”  The supplier told him he could sell him 400 tons.  “Great, I’ll buy them.” A couple days later the supplier who sold the cauliflower called the other and asked if he would be able to sell him 2 truckloads of cauliflower!!!   Who has the cauliflower?  Beware…

Technorati Tags: Noon International, China, broccoli, cauliflower, Zhejiang, Shandong

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