Doctor Fan Shenggen, director of the International Food Policy Research Institute (IFPRI), did not expect his comments criticizing China’s soybean policy of having double standards regarding GM soybeans at a meeting in China to incite resentment from America.

After the meeting upon returning to IFPRI headquarters in Washington, he received numerous calls and emails from American governmental organizations, representatives of grain giants and grain associations, informing him his words had gone against WTO principles of free trade.

Fan Shenggen is also the director of the international agriculture and rural development research center under the Chinese Academy of Agricultural Sciences. An internationally renowned grain expert, he believes China has made a strategic error regarding soybean policy which has led to the defeat of China’s non-genetically-modified (GM) soybean by its imported counterparts.

Actually, Fan Shenggen believes worries about China’s corn sector are more urgent and realistic. China’s corn imports increased by 56 times in the first seven months of this year on the level of the same period last year, totaling 282,000 tons. It imported 194,000 tons of corn in July, 148 times more than the previous July.

A Surge in Imports

Though this may not sound like much, this is the first time in 15 years that China has imported corn on such a large scale. The Financial Times has stated that, “the high growth rate of China’s corn imports has triggered people’s fears about the potential influence of China’s grain safety on the global agricultural commodity markets.”

Chicago corn futures have increased by over 50 percent in the past three months, reaching a historical high. Futures experts believe that this price increase is unreasonable and triggered by speculation.

However, other market players, the United States Department of Agriculture, and its Soybean Export Council and Grain Council, are full of high expectations. They even believe that China’s corn market will be as huge as its soybean market.

According to public reports, Thomas C. Dorr, President and CEO of the US Grains Council said recently that American corn providers might use their many years of experience opening China’s soybean market to open China’s corn market and eliminate Chinese people’s concerns about the safety of GM corn.

However, Chinese people’s views on GM corn are still greatly divergent.

In April the media reported that the New Hope Group, China’s largest private feed grain producer, imported a large amount of GM corn from America, which aroused public concern. Meanwhile, industry insiders are questioning the official figures on China’s corn storage.

The EO has learned from an anonymous source with the Ministry of Agriculture that up until now, China has imported 1.5 million tons of corn from America and has reached an agreement with the Argentinean government to import 5.5 million tons of corn in 2011.

America and Argentina are the two largest corn exporters in the world and almost all of their corn exports are GM corn. America’s corn exports account for 50 percent of global corn exports while Argentina accounts for less than 30 percent.

According to the above source, all of China’s corn imports for this past year and planned for next year are genetically modified. China’s largest state-owned corn importer is China National Cereals, Oils and Foodstuffs Corporation (COFCO) and its largest private corn importer is New Hope Group.

While the National Development and Reform Commission, the Ministry of Agriculture and the State Administration of Grain have attributed the explosion of China’s corn imports to the price gap between foreign and domestic corn, an anonymous high-level executive of the China Grain Reserves Corporation attributed the high imports to the official corn reserves being less than those of wheat and rice.

Fan Shenggen hopes China will not make the same mistakes regarding corn policy as it did with soybean. Latest statistics show, the dependence on foreign imports of China’s soybean sector has risen to 78 percent, and as early as several years ago foreign companies accounted for over 70 percent of China’s oil processing capacity.

The Myth of China’s Corn Reserves

China’s corn output and consumption volume have both exceeded 150 million tons in recent years. Around 90 percent of corn is used for feed and industrial consumption. Compared with wheat and rice, it is easier for corn to be influenced by the macro-economy.

The National Bureau of Statistics has revealed that China’s corn output reached 329.7 billion jin (a unit of measurement equal to 0.5 kg) last year, 3.9 billion less than that of 2008 while its corn consumption volume was 296.7 billion jin, a 7.8 billion jin increase on the level of previous year. A China Grain Net report has predicted that this year China will have a corn output of 330 billion jin.

Though it was widely believed that China’s corn output would be greatly reduced last year due to the major droughts suffered by China’s main corn production areas, data from the National Bureau of Statistics has shown that China’s output still exceeded demand. However, the data was kept secret until May and its accuracy was widely doubted when it was finally released.
Since March, the price of corn has increased progressively following the price surge of garlic and mung beans. It reached such a high price by April that even the National Development and Reform Commission and the State Administration of Grain were surprised. To rein in the corn price, the central government started a temporary auction of corn reserves on April 13. However, despite the sale of all corn reserves up for auction, the price of corn kept rising.

In the last ten days of May when the auction of corn reserves had been halted, the central government revised the trading rules of corn reserves so as to prevent corn processing companies from blindly hoarding corn, and continued releasing corn reserves; the price of corn decreased slightly. But less than a month later the price of corn resumed its upward climb and in August reached a new historical high of 1,976 yuan per ton.

Although at that time the price of wheat and rice also increased, the EO has learned from the National Development and Reform Commission, the Ministry of Agriculture and the State Administration of Grain that the central government is more concerned about the increase of corn prices. These three ministerial agencies have released dozens of policies to rein in the corn price increase.

The Strength of Downstream Sectors

What continued to drive up corn prices despite the Chinese government’s successive measures to tackle the increase?

While the National Development and Reform Commission and the State Administration have attributed the price rise to hot money, companies’ hording practices and farmers’ deciding to keep corn off the market, the EO has learned from many industry insiders that China’s corn demand now exceeds its domestic output.

Whether or not reserves are adequate is only one part of the whole picture. According to a high-level executive of New Hope Group, the volume of corn consumption increases every year thanks to the development of the livestock industry and its demand for feedstuff.

Another market player is foreign companies. Based on statistics from the China Feed Industry Association, by the end of 2008, there were 153 feed companies registered in Hong Kong, Macao and Taiwan, and another 282 foreign feed companies operating in mainland China. Compared with their Chinese counterparts, foreign feed companies usually possess large-scale investment, are larger in scope, and have high-level technology; most foreign companies are strategic investors.

A source from a Chinese feed company told the EO, foreign feed companies frequently expand their business in China through two methods: one is by being sole-owners and establishing subsidiary companies nationwide, a method preferred by Cargill Inc. and CJ Feed; the other is by conducting mergers or buying shares of other companies, a method used by ABN and Nutreco.

According to reports, foreign feed giants, including Cargill Inc. and CJ Feed, have been exploring investment options in the interior of China for the past few years, including large-scale agricultural investment.

For example, the Chia Tai Group has established over 130 feed companies, accounting for around 20 percent of China’s feed market. Other foreign feed giants, such as the Continental Grain Company, Purina and Cargill Inc., started establishing their position in China’s feed industry long ago.

The main downstream sectors of the corn industry are the cultivation industry and the processing industry, which have also been targeted by foreign countries.

In March 2009, the Chia Tai Group started a project in the Pinggu Distrcit of Beijing to raise three million layer hens. With a total investment of 582 million yuan, they can produce one-fifth of the total egg consumption volume of Beijing. The Chia Tai Group has also signed a contract to invest in the cultivation of 1.5 million layer hens, 15 million chickens and 50,000 pigs in Xinjiang.

The recent increase in meat and egg prices has further promoted the increased demand for corn. Conversely, the price fluctuation of corn will directly influence the prices of the above products. Without a doubt, this trend will continue even after the Spring Festival

But as China moves towards being the center of potato production in Asia, the humble potato is now bringing wealth to some in western China who had been living in poverty.

Chen Chunlan, a potato farmer in Dingxi in northwest China’s Gansu province, now lives a satisfying life in her newly-built, well-furnished home.

Chen credits her potato fields for the improved standard of living — they provide her with an annual income of 70,000 yuan ($10,400).

But Chen clearly recalls the hard times not long ago, when local peasants often had to worry about their next meal.

“We used to grow wheat, but the meager harvest could barely feed us, let alone allow us to save some money,” said Chen.

In 2001, destitution even forced Chen to flee Dingxi to try to earn a living in another place.

Dingxi, with its cold and arid climate and hence low agricultural yield, has long been listed as one of China’s poorest regions.

In 1995, a severe drought hit Dingxi, and almost everything in the fields withered. But to the locals’ surprise, the potatoes survived the catastrophe.

“Potatoes are amazingly drought-resistant and can acclimatize well to Dingxi’s agricultural conditions,” explained Wang Yihang, the provincial potato expert.

Next year, the Dingxi government launched the “Potato Project” to popularize the cultivation of potatoes to guarantee basic food supply.

Dingxi grows more potatoes than any other city in China, boasting over 200,000 hectares of potato fields, or one third of the city’s arable land.

Thanks to the edible tuber, the city no longer has a food supply problem, and attention has shifted to making the “food of the poor” a major export.

“Some freshly harvested potatoes are transported to wholesale markets all over China on special trains, while others are processed in local plants,” said Yang Zixing, party secretary of Dingxi city, referring to the city’s 20 large factories that turn the smaller, unsuited-for-sale potatoes into starch or potato chips. Previously, these potatoes would have been discarded or used for pig feed.

Some companies have struck deals with Simplot, McDonald’s french-fries supplier, to grow and process high-quality potatoes.

The city’s potato-processing factories are the source for 25 percent of the local farmers’ income.

Dingxi’s success story suggests a bright future for potato cultivation in China, as cultivation of the tiny tuber rapidly expands into China’s western regions.

“Over 4.7 million hectares of arable land in China are now growing potatoes, up from 2.7 million in the 1980s,” said Wang.

“Most of the increased potato cultivation is in China’s poor western regions — the provinces of Gansu, Shaanxi and Qinghai, and the Ningxia Hui autonomous region.”

The potato has proven to be more suitable than rice and wheat for cultivation on western China’s arid, barren lands, playing a major role in relieving starvation in these regions.

Furthermore, surging demand for potato products like starch can galvanize these less-developed regions to quickly industrialize.

“Potatoes can be made into materials or ingredients that are needed in food processing, papermaking, pharmaceuticals, textiles and many other industries,” said Wang.

And although in China potatoes are traditionally not a staple food as they are in many other parts of the world, it is nevertheless an integral part of Chinese cuisine.

Potato-based snacks are also becoming popular in China, especially after western fast food giants like McDonald’s and KFC began selling french fries.

Given the market potential and adaptability to arid areas, the potato may well be a new industrial star in China’s west.

The price of green beans and garlic has tripled in the past weeks, business portal China Food Network reported.

Green beans are selling for about 20 yuan ($2.9) a kg and garlic is selling for about 10 yuan a kg, the network reported.

But the average price of 28 vegetables monitored by the authorities has continuously decreased for the past three weeks, latest figures from the ministry showed.

The supply of green beans and garlic has plunged because of lower production and increasing exports, said Ma Shuping, deputy director of the ministry’s crop farming department.

Green bean production alone was hit by bad weather, decreasing by more than 130,000 tons last year, Ma said. At the same time, 230,000 tons more of the produce were exported amid falling imports, she said.

Domestic supply of green beans fell by at least 400,000 tons last year, she said.

“Besides the supply shortage, more people are drinking green bean soup on hot days in line with health trends and that helps drive up prices,” Ma said.

Hoarding in garlic and green beans has also helped push up their prices because the products can be stored for longer periods of time, said Sui Pengfei, inspector of the ministry’s market information division.

“But the hoarding will not spread to other farm products and cause higher inflation, because we have a supervision system for major farm products like beans, pork and sugar,” Sui said.

Earlier this week, the National Development and Reform Commission (NDRC), the country’s top economic planner, pledged to crack down on the hoarding of farm products and curb rising food prices. It is the third time in the past two weeks that the commission has addressed the importance of checking rising prices.

Temporary intervention to stabilize prices is necessary and any one found to be involved in serious price manipulation may face criminal punishment, NDRC regulators said.

China’s inflation rate, or the consumer price index, jumped 2.8 percent in April, mainly fueled by the prices of farm products. The country’s inflation target for this year is 3 percent.

The NDRC and the Ministry of Agriculture said an improved system will be set up for supervising prices to keep tabs on any price fluctuations.

Land for vegetable cultivation hit about 8 million hectares with a year-on-year increase of 6.7 percent, latest statistics from the Ministry of Agriculture showed.

Heavy snow in China’s wheat belt in the north is conducive for the winter crop, particularly to help ease dry weather earlier, but it has delayed corn transport out of the areas, worsening already tight supplies in the south.

As much as 55 cm of snow fell this week in China’s provinces of Henan, the country’s largest wheat area, as well as in Hebei and Shandong, the China Meteorological Administration said.

Experts said the snow was beneficial to the wheat crop in China, the world’s largest wheat producer and consumer.

“The snowfall is more conducive for wheat, it brings moisture to the soil. Earlier, some wheat areas have had dry weather,” Zhao Guangcai, a researcher with Chinese Academy of Agricultural Sciences, told Reuters.

But he said some young wheat leaves suffered minor freeze damage.

Another researcher with the Henan Academy of Agricultural Sciences said the snow helped kill insects and save water for farmers.

Feed mills in China’s consuming south, however, could face tigher corn supplies because the snow in the north has prevented farmers from selling their new harvest and delayed rail transport.

“Corn supplies are quite tight these days; there are some delays in transport,” said one official with the New Hope Group in the southwest province of Sichuan. The company was also looking for more imports from neighbouring countries [ID:nPEK205454].

The China National Grain and Oils Information Center said the bad weather also could reduce supplies for markets in Guangdong. Tight supplies have driven up China’s physical corn prices <0#ASCORN-CN> even at harvest time.

The National Development and Reform Commission (NDRC) said in an announcement on its website that the minimum purchase prices for white wheat and red wheat will be increased by 3 yuan (US$0.44) from the 2009 level to 90 yuan and 86 yuan for every 50 kg, respectively.

The move aimed to protect farmers’ interests and promote grain production, according to the NDRC.

(Xinhua News)

Rice is another main course besides wheat. But there are so many kinds of rice, they are very different from each other in shape, color, taste etc. And  every kind has its own feature and cooking method.Different people like the different kind rice.

All types of rice break down into two basic categories: whole grain rice and white rice. Whole grain rice has been minimally processed, so that it retains its nutrient rich husk. Because whole grain rice is not husked, it takes longer to cook, but it also tends to be more flavorful, aromatic, and colorful. Whole grain rice also has special storage considerations, as it can go rancid if it is kept at room temperature. White rice, on the other hand, has been processed so that the husk or bran is removed, and in some cases it may be polished to take the germ off as well. White rice requires less cooking, and it has a more mild flavor, but it also has less nutritional value, if this was a concern.

Broken Rice, during the milling process, broken rice is separated from the white rice, who shape remains intact. In other words, broken rice is the damaged white rice.A grain of broken rice gives a low fiber texture and low nutrient level, while retaining its high energy content.

White Rice belongs to the Indica (long-grain) category. It is also known as polished rice or fully milled rice because most of the outher layer-the husk and the bran layer-are removed from the kernel, through the milling process.Thai Jasmine White Rice, also called fragrant rice or “Hom Mali” rice, is recognized world wide as Thailand’s specialty.

Thai Jasmine Rice belongs to the indica (long-grain) category and could be devided into 3 main categories as A, B and C according to their quality; Prime Quality, Superb Quality and Premium Quality.

Brown Rice belongs to the indica (logn-grain), similar to white rice.The only difference between these two varieties is the milling. As a result, in brown rice, only the husk is removed while the bran layer remains.Because of the bran layer, brown rice contains more nutrients than white rice. In particular, Brown rice is very high in fiber and vitamin B.

Short Grain Rice belongs to the Japonica (short-grain) category and has short, round, and plumpy dernel. When cooked, short-grained rice is stick together, although not as much as glutinous rice.In Japanese and Korean cuisine, short-grained rice is primary consumed in every meal.

Rice should generally be washed before cooking, to remove pieces of plant material and residual material which may impact the flavor of the rice. Soaking can also cut down on the cooking time, although some recipes may call specifically for rice which is not soaked; in these instances, you should follow the directions of the recipe. Be aware that whole grain types of rice keeps best when stored under refrigeration and used within six months, while white rice can be stored at room temperature for up to a year, and sometimes longer.

 In 2009, the domestic cotton production is expected to decline, at 700 million tons, with the gradual improvement in exports of textile production, cotton production and demand gap has been expanded; Meanwhile, cotton prices in general will be higher than the previous year, but a large number of listing a number of new cotton the main producing areas are still downward pressure on prices.

It is understood that this year’s cotton pre-Miao Qing in general is better, but in late August to early September the Yangtze River basin consecutive disastrous weather, some impact on the growth of cotton. Ministry of Agriculture, the latest survey data show, this year’s cotton acreage of about 7592 acres, down about 1,000 mu, a reduction of over 10%.

National Development and Reform Commission Zhang Xiaoqiang, deputy director said, at present, the national cotton crop is growing basically the same as the previous year, if the recent weather conditions are normal, and strengthen the latter part of management, is expected to have a good harvest, the national cotton output is expected to 700 million tons. From the National Bureau of Statistics data show that in 2008, national cotton acreage 8640 acres, down 240 million mu; cotton output of 7.5 million tons, up has decreased by 12 million tons.

Prices, Zhang Xiaoqiang said that from the look throughout the year, due to cut production of cotton, cotton production and demand gap in the expansion of cotton farmers a higher price expectations, cotton prices in general are expected to be higher than the previous year. However, after the listing of large concentrations of new cotton, the domestic market, cotton prices are still downward pressure, especially in the higher concentration of Xinjiang’s cotton market, downward pressure on cotton prices higher.

Zhang Xiaoqiang said that the next step, the National Development and Reform Commission will further strengthen macro-control and maintain the basic stability of cotton prices and the market running smoothly. On the one hand, do a good job of cotton reserves control plans. If a large number of new cotton market fell over when the cotton price, timely manner through open bidding part of the cotton purchasing and storage. Such as market cotton prices rose too quickly, then throw in time savings, stable cotton prices to ensure the needs of textile and cotton.

At the meeting, reporters learned at the same time, from next year, the government will intensify efforts to promote small packet of cotton and its processing enterprises out of the market. From September 2010, the railway authorities to stop packets of cotton transport, the Agricultural Development Bank to stop providing loans to small packets of cotton processing enterprises, cancel cotton packet processing of cotton processing enterprises eligible.

The highest price paid was 3,790 yuan ($555.3) per tonne, down nearly 100 yuan compared with last week, when the market was concerned about a drought in the major soy-growing area of northeast China.

“It came as no surprise to the market,” said Xia Tian, a dealer at Zhejiang Yongan Futures. “Buyers won’t have interest in domestic soy reserves unless the U.S. soybean price goes up by $12 per tonne. Crushers hold enough stocks of imported soybeans. They can wait for the new soybean harvest.”

Beijing set the bidding price for domestic soy reserves at 3,750 yuan per tonne, about 4 percent higher than the U.S. crop for next January’s shipment.

“China has to sell the state reserves at the current price, otherwise it will suffer a loss as the government purchased soybeans from farmers at 3,700 yuan per tonne last year,” said Dong Shuangwei, an analyst at Capital Futures.

China has started to sell state soy reserves as part of efforts to reduce stockpiles and free storage ahead of the new domestic harvest, due next month, but only 85,300 tonnes were sold out of the large state reserves in the nine auctions.

China purchased about 7.3 million tonnes of soybeans for state reserves last year.

“The market is closely watching the overseas markets and controversial forecasts of a fall in output, ranging from 4 percent to 20 percent. However, as Beijing has enough reserves at hand and it has a policy of supporting farmers, the domestic soybean market will have a limited decline,” said Dong.

The following table shows the results of soybean auctions starting from July (volumes are in tonnes, prices in yuan per tonne):

Date Volume sold Highest price Volume

September 16 15,500 3,790 500,000

September 9 29,300 3,880 500,000

September 2 10,600 3,820 500,000

August 26 9,600 3,750 500,000

August 19 400 3,750 500,000

August 12 15,000 3,800 500,000

August 5 4,900 3,790 500,000

July 29 no bidders 500,000

July 23 no bidders 500,000

Total 85,300

Source: www.grainmarket.com.cn.

Michel Jarraud, director-general of the World Meteorological Organisation, said that water and temperature projections have become more valuable than the historical weather data that long governed strategy in agriculture, hydro-electric power, solar technology and other fields.

“The past is no longer a good indicator of the future,” the WMO chief told a press briefing, describing climate modelling and prediction as key to fisheries, forestry, transport and tourism, as well as efforts to fight diseases such as malaria.

People looking to build energy infrastructure are especially hungry for specific environmental information that can affect the long-term profitability of their projects, he argued.

“If in 100 years there is not going to be water going into the dam, it’s not a brilliant investment,” Jarraud said.

In the farming sector, the Frenchman suggested that guidance passed down through generations about how to prepare and manage crops was becoming less relevant because of changing patterns of heat, humidity and water access around the world.

“This traditional knowledge is no longer adapted. It’s exactly because your grandfather did this that you shouldn’t do it, because the context has changed,” he said.

“This is something completely new — to make decisions not on facts or statistics about the past, but on the probabilities for the future,” he said.

About 1,500 policy-makers, researchers andcorporate leaders will meet next week in Geneva to seek to improve the way climate information is collected and shared, among governments and also with the private sector.

That August 31 to September 4 meeting, which will take the pulse of countries who will seek in December to clinch a new global climate pact, is due to includetop UN officials including Secretary-General Ban Ki-moon and 80 ministers and 20 heads of state or government, mainly from the developing world.

But with generally favorable weather conditions in the northern hemisphere and firming US bean yield estimates what’s the rush? At the beginning of August 66% of the US’s soybean crop was rated as in good to excellent condition, although crop progress is currently slow with only 72% of pods setting compared to 85% for the five year average.

The USDA’s most recent report forecasts a lift in 09/10 oilseed end stocks, and even though this forecast is heavily reliant on South America’s production returning to normal, sharply higher production is expected based on large US bean plantings. Large South American production levels are possibly due to low wheat plantings, but production and availability of soybeans out of this region remains politically sensitive.

The Chinese government is holding another auction for 500,000 MT of soybeans today, and reports are that the Chinese government is considering a 200 yuan/t ($A35.42) subsidy to soybean crushers to encourage them to purchase government stocks. Possible answers to China’s current soybean purchases include high consumer demand, high crush margins on imported beans or a desire to control internal prices. But they could also be related to a genuine worry of future supply levels given solid demand, potential damage from a late nth hemisphere frost and unstable supplies out of Argentina.