China has been plagued by the worst winter snow storm in years, earthquakes, and now the heaviest rain in some areas in over 100 years. Thus far more then 1.7 million people have been evacuated. Read the following story by clicking here.
Technorati Tags: Noon International, China, rain
Interesting. Japan is worried about obesity and taking measures. Read the article here (click here).
I am in a business trip in Australia trying to convince my buyers that the price increases we are experiencing on vegetables are more part of an structural change rather than a cyclical phenomena. They are probably so tired of listening that, yes, prices are going up so they rather talk about something else hoping that the tune will change in the short term.
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.
Is product labeled “Product of Canada” really from Canada?? The Canadian label laws are somewhat lax and allow product that has at least 51% of the production costs of a food item added in Canada and some transformation has taken place, then it can be labeled as “Product of Canada”.
What does it mean? It means apple juice maybe product of China, or olives from Spain can be product of Canada, or frozen carrots mixed with Canadian peas can be product of Canada, and peanut butter and coffee beans bear the product of Canada label yet neither are grown in Canada.
Let the consumer beware.
Read the article here from Globe and Mail.
Technorati Tags: Noon International, label
Here is an interesting article about the Fed Reserves actions to reduce interest rates to stave off a subprime credit crisis only to find out that we are facing rising inflationary prices for our basic commodities. The FED’s reduction in interest rates has speculators looking in other areas, mainly the basic food commodities such as rice, wheat, corn etc. The weak dollar has only exacerbated the rising food prices. Countries are now facing food shortages, some Asian countries have restricted exports. Who would ever have thought the the subprime fiasco could be a contributor to world wide food shortages. When will it all end??
Technorati Tags: FED Reserve, food
Information from our customs broker:
Importers beware. U.S. Customs (CBP) agriculture inspectors have advised us that they will be increasing scrutiny of wood packing materials (pallets and blocking) in import containers.
Recently, 47 import shipments were turned around in Seattle. The pallets were properly stamped with the SWP stamp, but were infested with bugs/larvae. CBP is aware of “counterfeit” SWP, and is looking for them nationwide.
Technorati Tags: Noon International, wood, pallets
Nearly 5000 comments have been received on the China food safety draft law.
Some of the key comments:
Read the full article from China View here.
Technorati Tags: Noon International, China, food safety
Wal-Mart, the world’s largest retailer announced last week that it would ration the rice each customer can purchase at it Sam’s Club stores because of recent “supply and demand trends”. “We are limiting the sales of Jasmine, Basmati and Long Grain Rice to four bags per member visit” the company said in a statement.
Costco, the USA largest warehouse retailer, last week made a public announcement stating it had seen increased demand for basic food staples as well like rice and flour. The company had a two 50 lb limit on rice purchases as well to keep people from hoarding and reselling the rice.
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
Just recently I asked a friend of my in the China frozen food business about the new proposed draft law that is up for public comment. Below are their remarks which I find very interesting and shed light from a Chinese persons perspective.
As far as I see, Chinese Food Safety Law is mainly for domestic food safety control. I mean, that actually our exporting factories have been implementing much higher standard than the proposed draft law, long time ago. I think the highlight of the draft is the punishment for the producer of substandard food, they may face prison of up to lifetime in serious cases. Also the recall of un-safe food. However the draft only mentions very roughly about the recall. The detailed procedure has to be completed later after the Food safety law officially comes to effect. So I can not see what big changes to exporting factories yet. The only thing for sure is that China will control food safety more and more strict.
China always has the problem of too many supervising departments while the responsibilties for these departments are not so clear. Some times all departments controls one thing and some times no one controls because they think other department should contol. It happened before that one application has to be approved by over 80 persons(80 stamps finally actually showed on the application). The losing control situation has been taken advantages of by some bad guys and they do harmful things. Things are getting changed step by step. Hopefully a more reasonable and effective system will be established and we will live in a better environment.
The above are my personal views only.
Technorati Tags: Noon International, food safety, draft law, China
China is getting serious about food safety. A new draft law released by the
China government will impose severe penalties, including jail time and possibly life imprisonment.
China is going all out to improve substandard food and penalize manufactures that are not up to par. They will be fined according to the severity of the offense or possibly jailed. The new initiative will implement new traceback systems to monitor food safety.
Some food companies (Nestle, Mars, and Coca-Cola to name a few) are complaining that the new standards will not change anything, but will just increase production cost.
Other countries are setting up their own systems to protect the imported product from China. The FDA (US Food and Drug Administration) is planning on opening a office in Beijing next month just to take such action.
Technorati Tags: Noon International, China, food safety
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