China Agriculture View

A consortium led by Blackstone Group has agreed to invest about $600 million in a Chinese agricultural company ahead of its planned Hong Kong listing, sources with knowledge of the deal.

China Shouguang Agricultural Product Logistic Park, one of the country’s largest agricultural market operators, will sell a roughly 30 per cent stake of the company to the group led by the US buyout giant for about $600 million, said the sources.

The investment marks Blackstone’s first pre-IPO type deal in China as Shouguang plans to raise about $700 million in a Hong Kong initial public offering in the middle of this year after receiving investments from the Blackstone-led consortium, the sources said.

It also became the second major investment in China for Blackstone, which agreed in September 2007 to buy a 20 per cent stake in the major chemical maker China National BlueStar (Group) Corp for up to $600 million. The BlueStar deal was approved by Beijing in early 2008.

The consortium includes Capital, Atlantis Investment and Warburg Pincus, said the sources, adding Blackstone is the lead investor with the biggest portion.

“This will be the last round of private capital-raising before the company goes public,” said one of the sources. “Blackstone is apparently interested in this type of Pre-IPO deal with private company as well as investment in state enterprise like BlueStar,” he added.

The sources spoke to Reuters on condition of anonymity because the deal was not yet public. Blackstone declined to comment, while Shouguang, based in northeast Chinese province of Shandong, could not be immediately reached for comment.

HOME OF VEGETABLES

Shouguang is a family-owned business and it has hired investment banks including UBS and BOC International, the investment banking arm of Bank of China, to advise on its Hong Kong listing, said the sources.

The company is named after Shouguang, the Chinese city known as the “Home of Vegetables” — a center of trade in vegetables and other agricultural products, not only for major domestic customers but also for international agricultural markets.

Shouguang won approval in 2009 to expand its logistic park project, after which trading volumes of vegetables, fruits and agricultural by-products are expected to reach 10 million tonnes annually, according to a company statement at that time.

Blackstone became aggressive in China business after it hired Anthony Leung, a former Hong Kong Financial Secretary as its Greater China Chairman.

Leung has said the US buyout would not slow its investments in China despite the global financial crisis, as high economic growth and low valuations promised good returns.

Blackstone currently is raising a local currency yuan-denominated fund with a target size of about $750 million, purely for China deals.

Patent applications for agricultural innovations, particularly for genetically modified (GM) crops, have surged in China in the past decade, according to intellectual property experts.

Statistics from the China Center for Intellectual Property in Agriculture (CCIPA) show that applications doubled between 2002 and 2008, from 4,500 to 9,300.

The rise is against a backdrop of even greater increases in patent applications in general. China’s State Intellectual Property Office (SIPO) released a report in early February saying almost one million patent applications across all sectors were filed in 2009, an 18 per cent increase from 2008.

“These figures indicate clearly that China’s innovation bodies have maintained originality despite the unfavourable financial crisis and that China has improved substantially its capacity for protecting intellectual property rights,” Tian Lipu, SIPO commissioner, told a press conference.

The trend is echoed in a World Intellectual Property Organization report, also released last month (8 February), which puts China fifth among countries signed up to the Patent Cooperation Treaty (PCT) — an agreement by which patents can be simultaneously lodged in different countries. Chinese applications under the PCT increased by a third between 2008 and 2009, representing almost 7,800 extra international applications.

Agricultural innovations in areas such as GM crops have rapidly increased in number over the past decade, said CCIPA researcher Liu Lijun. GM crop applications stood at 342 last year, compared with 119 in 2002.

And these innovations have been applied across the country. In 2008, around four million hectares of transgenic cotton were planted in the country, accounting for 70 per cent of China’s cotton land.

Other examples of agricultural technologies for which patents are being requested include herbicides, synthetic plant hormones and new planting technologies such as hydroponics.

But there is concern among Chinese researchers that the country’s agricultural patenting is largely restricted to within China.
In 2008, China applied for no more than 20 plant variety rights in Japan, the European Union and the United States. In contrast, international biotechnology companies have stepped up their applications in China.

For example, German-based chemical company BASF submitted more than 500 applications to the country between 1985 and 2009.

“Intellectual property rights have not played a sufficient role in the development of agriculture in China,” Song Min, a researcher with CCIPA, told SciDev.Net, adding that IPR awareness in the agricultural sector is still weak and guiding policies should be improved.

Song suggested that China accelerate its development of core agricultural technologies and lodge more applications on an international level to compete with major international companies like Monsanto and Syngenta

Date: October 17-21, 2010
Venue: Zhengzhou International Convention & Exhibition Center, Henan, China

Add.: Zhengzhou International Convention & Exhibition Center, Henan, China

Exhibitor: Asia, Africa, America, Europe and more than 30 countries
Visitor: Chinese and neighboring countries’ producers, traders, importers, wholesalers, agents, dealers and other professional organizations

Early bird: 10% discount before May 22nd, 2010 booking your space

Deadline: August 10, 2010

Exhibits Profile:

Agro-products: grains, cash crops, fruits & vegetables, seeds, edible oil, edible fungus, dried fruits & nuts

Food & Beverage: conventional foods. instant foods, snacks, healthy foods, frozen foods, canned foods, baby foods, candy, condiment, fruit juices, wines

Agro-Machinery and Technology

Animal Husbandry & Aquatic

Products: embryo, breeder, feeds, meat products, poultry products, dairy products, fishery products, seafoods, aquaculture products

Agro-input: agrochemical, fertilizer, seed

China’s central government has allocated 28.6 billion yuan ($4.2 billion) to support farmers, the Ministry of Finance said in a statement Monday.

The bulk of the funding — 18.6 billion yuan — would be used to subsidize farmers in growing improved varieties of crops such as rice, corn, and cotton.

The other 10 billion yuan would subsidize purchases of farm machinery such as sowers and reapers, said the statement issued to Xinhua.

The funding aimed to improve motivation in agricultural production, and stabilize the country’s grain production, according to the statement.

Farmers across the country would be eligible for the subsidies.

The funding was on top of 86.7 billion yuan of subsidy funding to grain-growing farmers nationwide in February.

The financial support for agriculture came as severe drought continued in the nation’s west and south.

The National Meteorological Center (NMC) issued a drought alert on Sunday warning the severe drought would continue over the next three days.

The State Flood Control and Drought Relief Headquarters said Saturday the drought, which started at the beginning of February, had affected 4.64 million hectares of arable land and left 12.7 million people and 8.4 million heads of livestock short of drinking water.

Potatoes are grown from ’seed’ potatoes which grow better if they are allowed  to ’sprout’ before planting. First purchase the seed potatoes in late Januaryc. These are available from seed catalogues or your local garden centre.

A potato plant will grow in most soils as long as it has been well dug. The soil should be clear of large lumps and stones. Add as much compost as is available, or bonemeal (or similar) at the time of digging. It is a good idea to prepare the soil in mid November or December to allow it to settle before planting and let the compost begin to break down. Although not fussy about the soil type, the potato prefers a slightly acidic soil, so do not add lime before, during or after planting.

The detail instructions are as follows:
Compare the size of your sweet potato to the size of your jar to make sure your jar is large enough.

Push three or four toothpicks into the side of the sweet potato. The toothpicks should be forming a circle around the middle of the sweet potato.

Place one end of the sweet potato down into the jar. The toothpicks should be long enough to cover the edge of the jar holding the upper half of the sweet potato out of the jar.

Fill the jar with water until the bottom half of the sweet potato is almost covered by the water.

Place the jar in a window so that it can have access to sunlight as it is now a growing plant. In about two to three weeks you will notice that the little potato buds have formed roots down into the water. Be sure to keep adequate water in the jar to promote the growth of the plant.

Watch for the green leaves to start sprouting from the top of the potato. It will really start to grow pretty fast by this time. The leaves will resemble a vine.

Replant your new sweet potato plant or vine into a pot or hanging basket when the leaves and roots have really taken off. Tend to your new sweet potato plant as you would any other green plant. You can also just keep the sweet potato in the jar and enjoy watching how long all the vines of the plant become.

* Little impact on US corn, soy exports amid dollar bounce

* Cancellations seen no more than in typical years

* South American infrastructure to be tested by big crops

CHICAGO, Feb 11 – A resurgent U.S. dollar is unlikely to trigger mass cancellations of U.S. corn and soybean purchases in favor of South American supplies despite sinking prices in Brazil and Argentina due to huge crops.

Any decision to scrap U.S. sales currently on the books will hinge more on whether the South American countries can reliably load and ship more than their usual volume of grain to meet rising world demand, traders and analysts said.

Both Brazil and Argentina, the world’s top corn and soybean exporters behind the United States, are expecting record-large soy crops and bumper corn crops this year.

“There are big crops coming out of South America which will compete against the U.S. this summer as soon as they are readily available. But we’ll have to wait and see how they can handle the big export programs for corn and soybeans from a logistical point of view,” said Shawn McCambridge, analyst with Prudential Bache Commodities.

Poor roads, old trucks and reoccurring farmer protests in Argentina all threaten to slow the movement of crops.

“We could see some cancellations of what’s on the books already, but I just don’t think that it will be anything more than we see in a normal year,” he added.

The dollar climbed to a seven-month peak against a basket of major currencies last week, making dollar-denominated commodities more expensive for those holding other currencies.

But a substantial drop in corn and soybean prices coincided with the greenback’s climb, more than offseting the currency’s negative impact on exports. Corn futures have fallen 14 percent and soybeans by 7 percent since the release of a key U.S. Agriculture Department crop report on Jan. 12.

“We’ve seen some strengthening in the dollar, but we’re still near these historical lows. Maybe at the margin it makes some slight difference, but I don’t see it as being a huge game-changer in the export world,” said Marty Foreman, analyst with Doane Advisory Services.

“If you go back and try to correlate exports with changes in the dollar, it’s pretty hard to find much,” he said.

PENDING SHIPMENTS

One reason traders have been nervous about the huge South American crop is that the United States still has to ship 9.4 million tonnes of soybeans by the end of the marketing year on Aug. 31, 47 percent more than at the same point a year ago.

Nearly 12 million tonnes of U.S. corn remain unshipped, 39 percent more than last year.

But shipments as a percentage of total sales are only slightly behind last year, with 73 percent of total soybean sales shipped and 60 percent of corn sales shipped, according to U.S. Agriculture Department data.

U.S. soybean export shipments were expected to remain brisk through mid-March, which should take soybean shipments to more than 80 percent of total sales, before freshly harvested South American soy floods the market and U.S. shipments slow.

The second half slowdown in soy shipments will free up U.S. port capacity to load more corn.

But some analysts warned that cheaper South American corn may undercut U.S. sales if China’s demand for imported soybeans slows and frees up port capacity in Brazil or Argentina.

“It may come down to the value of the elevation,” said one U.S. corn trader. “If South America has less capacity to load corn, that could keep our corn sales up here.”

Importers are also keenly aware that disputes between Argentina’s farmers and government over farm export taxes often delay grain and soybean deliveries during harvest. That uncertainty supports typically benefits the far more stable U.S. export market.

The big influx of supplies, which have already begun to arrive at some Brazilian ports, are sure to put South America’s grain handling infrastructure to the test this year.

In Chinese the word for alcohol “jiu” is used to mean all types of alcoholic beverages, from ‘pijiu’ (beer) to liquors (just called ‘jiu’) to grape wine (’putao jiu’).Even in modern China alcoholic beverages are generally classed by the general population by how much intoxication it delivers for the money.

In ancient China, since alcohol was regarded as a sacred liquid it was only used when people made sacrificial offerings to Heaven, Earth or significant ancestors. After the Zhou Dynasty, alcohol was deemed as one of the Nine Rites and every Dynasty since, placed heavy emphasis on alcohol administration, setting up special ministries to manage alcohol production and banqueting. Later, along with the development of zymotechnics and brewery, alcohol became much more of an ordinary, everyday drink. Thus, many of the daily customs involving alcohol evolved.

Ordinary Chinese people today have always just used alcohol to help them celebrate the happiness in their lives. In China, a banquet known as “Jiu Xi” means an alcohol banquet and the life of every person, from birth to death, should have pauses for drinking banquets starting a month or 100 days after a baby’s birth when the parents invite people in for a drink. When someone builds a new house, marries, starts a business, makes a fortune or lives a long life, he should invite people in for a drinking session. In modern times it is a pity that the games that go with drinking are not the elegant ones of the past that involved poetry or music. Today, drinkers just play simple finger-guessing games along with a lot of heavy drinking. It also seems today that friendship depends only on the volume of drink being consumed. “If we are good friends, then bottoms up; if not, then just take a sip” is a common phrased exchanged during gatherings.

Famous Chinese liquors, wines

Fen jiu – this wine was dated back to Northern and Southern Dynasties (550 A.D.). It is the original Chinese white wine made from sorghum. Alcohol content by volume: 63-65%.
Mao Tai jiu – this wine has a production history of over 200 years. It is named after its origin at Mao Tai town in Guizhou Province. It is make from wheat and sorghum with a unique distilling process that involves seven iterations of the brewing cycle. This wine is made famous to the western world when the Chinese government served this in state banquets entertaining the US presidents. Alcohol content by volume: 54-55%.
Gao Liang jiu – Goa Liang is the Chinese name for sorghum. Besides sorghum, the brewing process also use barley, wheat etc. The wine was originated from DaZhiGu since the Ming Dynasty. Nowadays, Taiwan is a large producer of gao liang jiu. Alcohol content by volume: 61-63%. Mei Gui Lu jiu (rose essence wine) – a variety of gao liang jiu with distill from a special species of rose and crystal sugar. Alcohol content by volume: 54-55%.

Yuk Bing Shiu jiu – a rice wine with over 100 year history. It is made of steamed rice. It is stored a long period after distillation. Alcohol content by volumne: 30%.
Sheung Jing (double distill) and San Jing (triple distill) Jiu – two varieties of rice wine by distilling twice and three times respectively. Alcohol content by volume: 32% and 38-39% respectively.

This series of pepper’ photos were taken by Chen Yi works as a civil servant It took the photographer three months in 2003 to finish this group called ”Life”.