COMMODITY PRODUCTION, CONSUMPTION AND TRADE

GRAIN AND FEED

COFCO took over China Grain and Logistic Corporation

Approved by the State Council, COFCO take over China Grain and Logistic Corporation as one of COFCO’s fully owned subsidiaries, according to an announcement by the State Owned Assets Supervision and Administration Commission of the State Council, who oversees key state companies in China.  China Grain Logistic used to be a large scale state grain logistic corporation funded in 2006 by the State Council and managed by National Development & Reform Commission, Ministry of Finance and State Grain Administration. It was the largest grain purchase and transportation company in China.  COFCO, founded in 1949 is China’s leading agricultural trade and food processing company.  Reportedly in July 2012, COFCO started the take over process and sent senior managerial staffs to China Grain and Logistics. The takeover contributes to COFCO’s logistic capacity in domestic grain purchase market.  (03/11/2013, the State Owned Assets Supervision and Administration Commission of the State Council website, JJY)

MEAT, LIVESTOCK AND DAIRY
NDRC warns the price ratio for swine to grain dropped below the breakeven point of 6 to 1

Since January, pork supplier increased and pork price continued to drop due to factors such as fluctuation in production cycles, seasonal or festival changes in demand. By March 6, the hog price at farm gate averaged RMB 14.52/kg, down 3.26% from the previous week or down 16.7% since January. The price ratio for hog to grain drop to 5.95 to 1, lower than the breakeven point of 6 to 1, at which the hog farmer starts to loss from this relatively low hog price. Some inefficient hog farmers might loss more.   The hog inventory data showed that the sector’s production capacity is higher than desirable, the oversupply situation might continue for a while.  The government suggests the hog farmer should respond to the market price change and adjust their production structure and reduce inventory to avoid more loss.  The government will monitor the hog market closely and initiate the intervention plan (Post note: purchase for reserve might be an option ) when it is necessary, and try to alleviate the cyclical fluctuations in hog production and market prices. (03/ 13/2013, National Development & Reform Commission, JJY)

Foot-and-mouth disease confirmed in Northwest China

China's Ministry of Agriculture (MOA) said Monday that foot-and-mouth disease infections were confirmed in cows in northwest China's Qinghai Province.

A cow farm in Ershilipu Township of Xining reported that two cows showed suspected signs of the disease on March 15, according to the MOA.

The National Foot-and-Mouth Disease Reference Laboratory on Monday confirmed the case as type A foot-and-mouth disease.

To prevent the disease from spreading, local authorities have sealed off and sterilized the infected area, where 63 cows have been culled and safely disposed of, according to the MOA.

Foot-and-mouth disease is a contagious and sometimes fatal viral disease that affects cloven-hoofed animals, including domestic and wild species within the family Bovidae. (Xinhua News, 3/18/2013, ZJP)

Over 8000 dead pigs collected from Shanghai's Huangpu River

By March 20, 2013 the number of dead pigs collected from Shanghai’s Huangpu River has increased to over 8,000. Workers have been busy collecting the corpses of floating pigs since last Friday. Some fishing men stopped fishing but collecting dead pigs instead because they can earn RMB100 ($16) a day.   The Shanghai municipal authorities have said the corpses will be disposed of safely. Tags pinned to the ears of the pigs for tracing purposes indicate that they may have come from the upper reaches of the Huangpu River in Jiaxing City, east China’s Zhejiang Province. The tags, however, only indicate the animals’ birthplace. The dead pigs came from backyard operators. 

Local officials said recently that no mass swine epidemic had broken out in Jiaxing. Laboratory tests found porcine circovirus, a virus that can spread among pigs but not to human beings in one water sample taken from the Huangpu River. All other tests showed no signs of irregular contaminants or disease. The river is a major source of drinking water for Shanghai, an eastern metropolis of 23 million people.

Actually, in April 2012, the Ministry of Agriculture stepped up cracking down of dead animal marketing in some rural areas, which died of an unknown reason.  The government also announced a policy to subsidize commercial sized farms or officially designated slaughterhouses that suffer economic losses due to disinfection of dead animals.  The subsidy varies from RMB80 to RMB880 ($13-142). However, the size of backyard operation is not big enough to get the subsidy.  Local official disinfection tanks are not enough to handle many dead animals at a time.  So, many backyard operators just threw their dead animals into rivers.  Jiaxing is major swine producing area near Shanghai.  In 2012, there were 130,000 swine farms or households, which produced 7.34 million head.  Nearly 89% are small operators with each annual slaughter below 50 head.  (Xinhua News, Xiaoxing Norning Newspaper, China Youth Website, March 13-20, 2013, ZJP)