Noon International: Food Trading Import Export

The FDA has reversed its previous recommendations and now states that small amounts of melamine are safe for infants (up to 1 part per million). It appears that the major problem arises when you have both melamine and cyanuric acid (a related compound) found in the same product.

The FDA has thus far tested 74 US products since September and have found 2 brands with either melamine or cyanuric acid but not both. It is the combination of these two compounds that creates the problems for infants and pets. The new recommendation of 1ppm for melamine were derived after the current testing of these 74 products.

What is still unknown is what tolerance if any is acceptable if both melamine and cyanuric acid are both present.

Products found to contain melamine:

Nestle SA’s liquid Good Start Supreme Infant Formula with Iron tested positive for melamine (0.14 ppm)

Bristol-Myers Squibb Co.’s powder Enfamil Lipil with Iron tested positive for cyanuric acid (0.249ppm).

Source: Bloomberg

Technorati Tags: melamine, cyanuric acid

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Just received following information from Alan Davis of Strategic Solutions Partners, LLC
 
US to open China offices for product safety

The US Food and Drug Administration (FDA) will open three offices in China this week to ensure the safety of exports headed to the US, AP reported. These will be the first FDA offices outside the US. The first will open in Beijing on Wednesday, followed by one in Guangzhou and another in Shanghai. Mike Leavitt, US health and human services secretary, said the FDA presence in China will enhance the speed and effectiveness of efforts to protect consumers in the US and China. Safety issues involving the blood thinner heparin, food and other products imported from China have put pressure on the FDA to establish an international presence. Last year, US-based Mattel recalled more than 21 million Chinese-made toys worldwide.

Technorati Tags: China, FDA, safety

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The FDA (Food and Drug Administration) took the unusual steps of detaining certain food products from China without physical examination. Taking action against a country is not the norm, generally it is confined to a specific factory or region. In this case, due to the ubiquitous use of melamine in milk they have elected to detain all food products from China containing milk.

In order to have the product come into the country, each shipment will have to be inspected by an outside lab (third party) to prove that it is free of melamine, or the melamine analog. This testing will be an added cost of up to $1000 per shipment.

The FDA has given the written criteria for other methods of clearance by individual factories as outlined in their Alert (click here for FDA Import Alert).

My question is how will China retaliate???

http://www.latimes.com/business/la-fi-china14-2008nov14,0,1796913.story
http://www.timesonline.co.uk/tol/news/world/asia/article5152668.ece

Technorati Tags: melamine, China, FDA

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Another water chestnut season in China is fast approaching (harvest is December through early March). It will be an interesting year, being that we are coming off of a very short year, strong pent up demand, and in the midst of a global slowdown. What will the season bring??

Frozen and Canned processors scramble for product.

The water chestnut acreage this year is up 20% but due to bad growing conditions. yields are way off and it appears that the market will still be extremely short. In addition to the normal delays encountered during production, we must wait for CIQ (China Inspection and Quarantine) approval of lands to be used for water chestnuts, if they are to be exported.

Initial pricing this year is 40 - 50% higher than last years price. The reason for the current high price is due to the shortage coming into the new crop and the need to fill the pipeline. This applies for both to canned and frozen processors. The canned users are generally willing to pay higher prices then the frozen users therefore they will get initial raw material coming from the fieldsl because of there willingness to pay a premium.

CIQ (China Inspection and Quarantine) delays due to regulation that makes it mandatory that fields be registered with them. This can create some bottlenecks in the supply as packers need to await the certification for the fields being used as well as CIQ approval of finished product before exportation.

The Chinese currency continues to appreciate against the dollar albeit at a much slower rate. Ocean and trucking freight cost remain high but this is starting to come under recessionary pressure.

What to expect?

I would envisage that after the initial replenishment of supply that we will see prices come down due to world wide slowdown. We will encounter consumer resistance to high prices especially for a luxury vegetable such as water chestnuts. Just as we have seen the price of natural resources plummet in the past few months, I believe the food chain will experience the same collapse.

Time will tell, and if I were a betting man, I would bet on lower prices next April or June (and possibly sooner).

The rathe of world wide recession will reck havoc on frozen vegetable pricing in 2009.

Technorati Tags: Water Chestnuts, China

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