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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Again it is buyer beware.

Watch the video.

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Bitter Melon

Bitter melon a common vegetable in China, India and South America could be a magic cure for breast cancer. Scientist have found that the bitter melon extract kills the cancer cells while not killing the good cells. Yes it is in early stages and clinical testing has to happen but this could be a major break through in fighting cancer.

In China they eat bitter melon soup all the time. I wonder if women in China who consume the soup have a lower incidence of breast cancer? An interesting research project.

Maybe we should start to import Bitter Melon Soup and sell in the holistic food stores as a possible cancer cure? Or maybe use it in stir fry mixes. Do we have any takers?

See article here: Click here.

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On November 8th, 2009 several of China’s top agriculture experts (the eight standards) met in Beijing. One of the presenters of interest was Professor Zhan Jingchun who spoke of his research on his Zero Pesticide Residual.

This should be of interest to all of us who are concerned about pesticides on our foods. Professor Zhan after 18 years of work has developed what he calls the Zero Pesticide Residual degradation technology. At its core it will control a series of biochemical reactions in the plants that will cause it to degrade pesticide residual to zero or near-zero. In addition it will reduce heavy metal toxins by 50% to 86%. The product is to be applied either by seed treatment, leaf application or through irrigation into the root of the plants. The product does not have any negative side effects or contamination.

After review and discussion by the experts it was determined that the Zero Pesticide Residual be approved and further testing be done on a commercial basis. The experts feel that not only will the process comply with China’s eight standards but will also meet the standards of Europe, Japan and USA. All efforts will be concentrated on moving forward and getting final registration in Beijing.

We look forward to seeing more details and explanation of the entire process and how it impacts the plants.

Source: Chinese Food Quality Newspaper, Nov 9, 2009
Eight Standards: Fruits, Vegetables, Fruits and Vegetable Powder, Tea, Cereals, Ginseng, Herbs and Cottonseed.

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“China is suffering the coldest winter (record breaking cold temperature in 30 years history) in Northern, NW, East coast (Yangzi River Triangle Area farm land grounds are frozen solid which is very unusual in that area) part of China, even Southern provinces are affected. The Winter/Spring Crops are damaged. People are scrambling to source fresh vegetables from Sichuan province to many parts of metropolitan areas, like Shanghai for example and prices are going sky high. Many frozen vegetable processing /packing facilities are all having nothing to do, due to lack of raw materials, because fresh vegetables are all going to local markets for people’s daily consumption. Fresh Broccoli and Cauliflowers are in huge demand and hard to come by for frozen vegetable processors. We will see severe shortage of these items in the near future.

This condition will get worse, if the weather condition will not improve in short period of time. It will affect our packers’ ability to get decent prices and good quality/quantities of raw materials in order to fulfill our contracts.”

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The largest cold chain complex in Tianjin, China with a capacity of 200,000 metric tons will be completed by the end of this year.

The facility will be made up of 5 cold storage warehouses and a 15,000 square meter aquaculture market with processing capacity of 10,000 metric tons per annum.

It is projected to have frozen foodstuff trade volume of 1,000,000 metric tons with a trade value of approximately $4,000,000,000.

Technorati Tags: China, cold storage

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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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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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China once again is brought to the forefront with a new melamine scare. Now the problem is eggs. Hong Kong authorities has detected melamine in 4 brands of eggs from China.

The melamine, which is high in nitrogen, is added to the food products to make them appear as having a higher protein content. Melamine is cheap, gives the false impression of higher protein so that food inspectors believe the food products are protein enriched and meeting their minimum protein standards.

The feed industry appears to be using the cheap additive, mixing it with food products of various types, to reduce production cost. It appears that this is a national phenomena and one that all have tacitly approved (including the government). It’s their little “open secret”.

China officials reportedly were aware of the situation and began investigating in early October eggs in Liaoning province, however, they put a ban on any media interviews.

After melamine what next?

Reference:
http://news.bbc.co.uk/2/hi/asia-pacific/7701477.stm
http://news.bbc.co.uk/2/hi/asia-pacific/7699100.stm
http://www.msnbc.msn.com/id/27320256/

Technorati Tags: China, melamine, eggs

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The Chinese government doesn’t appreciate law suits particularly when the government is part owner of the defendant in the case. After all they are more concerned about economic growth then social well being.

Thus far hundreds of lawyers have volunteered to take on the cases but the Chinese government puts extreme pressure on the lawyers and in the end nothing happens. The complainants are forced to except a small compensation from the government or risk getting nothing.

How about a class action suit?? This is a definite no no. The All China Lawyers Association (ACLA), the country’s bar association, looks down on class action suits and discourages them, and has set up strict rules which in essence make it impossible for a class action suit.

We must remember that in China politics come first and then the law is a distant second.

Makes me wonder what would happen if we as foreigners tried suing the Chinese manufacture of melamine milk if our child got sick or died?

Reference: NY Times Oct 17, 2008

Technorati Tags: China, milk, melamine, melamine milk

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