It would seem like Foxconn suicides were the catalyzer for a wave of labor unrest around China, the common theme was increase in wages and better labor conditions.

The Chinese government has so far responded by encouraging local governments to increases the minimum wage in their areas, it’s reported that at least 20 provinces and cities have raised minimum wages close to 20%.

The Shenzhen government issued a statement this month that the minimum monthly wage will rise to 1,100 yuan ($161) for full-time workers, while hourly pay for part-time employees will climb to 9.8 yuan ($1.44).

Beijing, the capital city, will increase its minimum wage by 20 percent to 960 yuan($140.5) per month from 800 yuan ($117) from July 1.

So, if you are assembling (or selling) high tech gadgets such as iPhones or iPads the recent increases might be somehow manageable however for companies producing low priced commodities, such as frozen/canned fruits and vegetables, this might be a harder pill to swallow.

So who is going to pick up the bill? Not sure yet, customer worldwide are demanding lower prices to accommodate consumers frugal spending habits. On the other hand suppliers are struggling with, well… higher wages, increased freight rates and surging energy cost.

So is this the end for cheap commodities coming out of China, I don’t think so (at least not yet) while some firms might move to other countries such as Bangladesh or Vietnam I believe majority will move inland China where wages are still low.
Plus for us in the vegetable industry the variables of longitude and latitude have a definitely impact on what we can grow and how well it grows.

Technorati Tags: Foxconn, China Workers, China Minimum Wage, iPhone

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One way out of Global Warming is a draconian reduction in carbon dioxide emissions, not a simple task by any means.

There are serious economical and technological factors involved.  On the economical side Richard Tol, leading author of the U.N. climate panel, stated that to cut carbon emissions enough to meet the 2 degrees goal set by the industrialized nations, the leading industrial nations would have to slap a huge tax on carbon-emitting-fuels. One that by the end of the century will reach something in the order of $4000 per metric ton of Carbon Dioxide, or $35 per gallon of gas ($9 per liter). According to Tol, the impact of a tax hike of this magnitude could reduce world GDP 12.9% in 2100. Good Luck with that one…

On the technological side of things, at the present moment most of the word’s electricity comes from coal. For two of the biggest emerging economies, China and India, the production of electricity based on coal is about 80%, Ouch!!!  And the worst thing is that there isn’t a clean, dependable and most important cheap source of abundant energy that will entice industrialized and emerging economies to make a quick switch from coal based energy.

So what is the solution?

In my opinion one of the solutions is to pour lots of $$$ in R&D looking for technological breakthroughs in energy generation. Unfortunately our beloved leaders are putting the money in other areas that promise little or no chance to solve the real problem.  Must have listened to Mr. Paul David Hewson when on the issue of Global Warming he quoted Thomas Friedman’s line “Don’t change your light bulbs – Change your Leaders”.

I also think we need to do our part, we need to be mindful on how use the energy resources that are available to us everyday. Think about it this way: we have a time limit to solve global warming, last time I checked we don’t have anywhere else to live but planet Earth. So it’s still a good idea to change your light bulbs to energy efficient ones.

Think about the future generations and the impact that your decisions will have on them, Please.

Technorati Tags: Global Warming, Carbon Dioxide, U.N. Climate Panel

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I love Toro Sashimi and every time I have the opportunity, I indulge myself with more than one piece of this Japanese culinary delicacy. There are however a few things I didn’t consider when savoring my delicious chunk of fatty tuna.

Most of the tuna that we eat in the Bay Area comes from the port town of General Santos City in Southern Philippines, one of the world’s great tuna-fishing ports. The best tuna will sell for about $700 wholesale. After being cleaned and put in dry ice it takes the 10.30 a.m. flight to Manila. The next day, the fish will be in Tokyo, Seattle of California.

So think about the Carbon footprint my nice and delicious little piece of sushi left behind. And it doesn’t end here, in September the European Commission recommended that the European Union support a temporary suspension of the global trade of Atlantic Bluefin tune. The World Wildlife Fund (WWF) estimates that Alantic Bluefin that spawn in the Mediterranean could disappear from those waters as early as 2012. As you might have guessed the ban was shot down by E.U. members with high stakes in the tuna trade.

Scientists believe stocks of southern bluefin around Australia have probably fallen more than 90% since 1950 and could continue to drop.

In order words the amount of tuna we are consuming worldwide is not sustainable and  the consequences of not having tuna in our oceans could be disastrous for the ocean ecosystem and probably many economies.

So next time I go for sushi I might choose an alternative dish, probably Corn Sushi. With nice supersweet corn grown in the Northwest of the USA.

We can make a difference, one mouth at the time… Leave some of that delicious tuna to your great-grandchildren.

Technorati Tags: Tuna, Sustainable, Carbon Footprint

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All of them had a great time courtesy of Seneca Foods Corporation.

Picture of Chiaki at the 91st PGA Championship

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Technorati Tags: Hanami, Cherry Blossom, Japan

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Convenience stores such as 7-Eleven discard food as the expiration date looms close, however recently they are recycling the foods into fertilizer and livestock feed – well maybe responsible, but it only justifies the wasting of more food.

Freshness of food is extremely important in Japan, especially in the last few years with all of the food labeling scandals, however food safety is not the only factor. There was a survey done by the Sankei Shinbun last fall and based on this survey Japanese diners never ask for a doggy bag because they are afraid it might offend the restaurant owner. Little by little, consumers are becoming less self – conscious about taking home leftovers and you can now buy special colorful containers made especially for doggy bag purpose. What does that mean – Japan’s solution to food waste – make it fashionable!

Technorati Tags: Japan, Food Waste, Doggy Bag

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Once again I don’t think this is going to happen and some of the reasons that help me substantiate my belief that prices will remain on the high side for a considerable period of time are:

1) Crude oil has hit record prices of USD$135.00, this point needs no explanation, I think we all feel it when filling up our tanks with precious petrol. Remember oil is a limited resource, we can’t achieve unlimited growth with limited resources.
2) Energy Policies around the world. The agricultural output in the USA, Europe and Latin American countries has shifted to crops destined to the production of biofuels. So our farmers are now either competing against biofuel producers to get land to grow human consumption crops or have decided altogether to just plant crops intended for biofuels.
3) Worldwide inventories for basic soft commodities such as corn, wheat, soy bean and rice are at decades low. Part of why this has happened has to do of course with supply and demand however the fact that production subsides to farmers have been decoupled from production in the USA and Europe has played and important role in the reduction of inventories.
4) Global demand has also played an important role, the BRIC economies (Brazil, Russia, India and China) have experienced a rise in per capita income which has lead into changes in dietary habits. More and more Chinese are now going to restaurants such as the successful KFC and are eating more and more chicken. So how does this affect the global demand for grains in average you need 2 kilos of grain to produce 1 kilo of Chicken.
5) Climate Change. Prolonged Drought in Australia, the extreme harsh Chinese winter and the severe frost in Argentina and recent poor conditions in agricultural producing countries have resulted in a reasonable reduction in agricultural output. The scary thing here is that if we don’t do something radical to fight climate change things will not get any better.

At the of the day I think we all know prices are indeed going up since we are starting to feel it in our wallets. For us in living in developed economies this might force us to change some our habits like waiting a bit longer before we buy the new 108″ plasma screen however I challenge you to think about most of the people that live in 3rd world countries, for them the recent increases might mean skipping a meal and sometimes not eating at all.
This is a really serious matter, high prices and shortages have lead to riots in countries like the Phillippines, Haiti, Egypt and some African countries.

I do hope for prices to come down however I don’t have a clear answer as far as how this would be achieved, at least not in the short run.

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So how do we put the current rice situation into perspective?

The world has over 50 000 edible plants. Just three of them, rice, maize and wheat, provide 60 percent of the world’s food energy intake. Rice is the predominate staple for fifteen countries in Asia and the Pacific, ten countries in Latin America and the Caribbean, one country in North Africa and seven countries in Sub-Saharan Africa according to the FAO. This translates to the fact that rice is a staple food for close to 50% of the world’s population.

Over the past 3 months rice has surged from USD$400 MT in January to USD$770 in March. In the past week, the benchmark Pathumthani Thai rice was priced at $930/MT, which is up 52% in just a month, according to the Thai Rice exporters association.

Thailand, the world’s biggest rice exporter, has recently rejected selling some of its two million tones of rice stockpile as prices soar towards USD$1000/MT. As a result, global shortages and hoarding are emerging, with food riots recently in the Philippines, Haiti, Egypt and many African nations.
The UN warned in February that 36 countries, including China, face food emergencies this year as prices of rice and wheat soar, and world stockpiles of coarse grains fall to multi-decades lows.

So what is causing the increase in prices? Supply and demand? Yes, but what is behind this supply and demand equation.

There is no doubt that weather-related issues can take part of the blame however not all of it. Farmers in North America, Europe and some Latin American countries are switching to crops destined to the production of biofuels.

Government food subsidies paid to North American and European farmers have decoupled from production, this has put an end to an era of overproduction as global inventories keep coming down.

Global population keeps going up, the United Nations expect population to reach 8.13 billion by 2030, this is a 26% increase from 2005.

The industrialization of the Chinese economy is driving rise in per capita incomes hence an increase in living standards. So Chinese people have now more disposable income to buy food, the result is a change away from staple foods to include a more balanced diet of animal protein and dairy products. Nevertheless this dietary change has a multiplier effect on coarse grain consumption. Consensus is that two kilos of grain produce one kilo of chicken or one liter of milk. Three to four kilos of grain are required to produce 1 kg of pork and six to eight kilos are needed to produce 1 kg of beef.

So it isn’t only rice, it’s a bit more complex than just rice I would say. The effect of what is happening to staple foods in our global village is something worth considering since it is going to affect our pockets sooner rather than later.

Technorati Tags: Noon International, Rice, Food Riots, Wal-Mart, Costco

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Some of the actual facts are:

80% of China’s electricity comes from coal; the sulfur that spews from the smokestacks of coal-fired power stations causes acid rain and the soot generates smog.

The OECD cites a finding that air pollution alone reduces China’s output by between 3% and 7% a year, mainly because of respiratory ailments that keep workers at home.

The amount of water available per head of population is only a quarter of the global average. In the arid North and West of China the figure is only one tenth of the global average.

Two in three cities already suffer from water shortages of some sort.

Groundwater in China is being pumped out much faster than is being replenished.

Most cities don’t treat sewage water at all; Beijing the hosting city for the 2008 Olympics doesn’t treat 100% of their sewage water.

Over half the water in the seven biggest river basins is unfit for consumption, according to a recent report from the World Bank. The resulting health problems reduce rural output by 2%, the World Bank found. The cost to industry and agriculture of dirty and scarce water sap GDP by another percentage point.

The World Bank put the price tag for China’s air and water pollution at $100 billion a year, or about 5.8% of GDP.

China’s paramount environmental regulator estimates the annual cost of environmental damage at 8 – 13% of GDP – much the same as the overall economic growth rate.

These are really scary numbers which make me think about Thomas Friedman, NY Times columnist and Pulitzer Prize winning author, quote on climate change: “Don’t change your light bulbs; change your leaders.” Bono from U2 during the recent Davos Forum suggested changing both, I concur.

Technorati Tags: Environment, Water pollution, Air pollution, Beijing 2008 Olympics, GDP, World Bank

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Ito Yokado, another supermarket operator, set up special areas inside its stores selling produce used to make your own dumplings.

Both China and Japan will have to handle this with extreme care since China is the second biggest supplier of food into Japan after the USA.

We’ll keep you posted on how this saga develops.

Technorati Tags: Contaminated Dumplings, food safety, China, supermarket

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