Archive for ‘food security’

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25/09/2013

China gets stake in Russian potash giant to secure supply

A few days ago, China acquired vast areas of farming land from Ukraine, now it is acquiring a secure source of fertiliser.  It’s determined that the population gets fed!

Reuters: “China acquired a 12.5 percent stake in Russian potash producer Uralkali (URKA.MM) in a deal that could help Beijing secure stable supplies of the soil nutrient, put new pressure on prices and reduce the chances of a Russia-Belarus cartel being revived.

A general view of a Uralkali potash mine near the city of Berezniki in the Perm region close to Russia's Ural mountains August 26, 2013. REUTERS/Sergei Karpukhin

The investment by China’s $575 billion sovereign wealth fund China Investment Corp (CIC) CIC.UL is the latest twist in a saga that began when the world’s leading potash producer quit the lucrative sales partnership with Belarus in July and led to the company’s chief executive being jailed.

Under the deal, Uralkali said on Tuesday that CIC had received the stake in a bond exchange deal with Wadge Holdings Ltd, which belongs to three shareholders including oligarch Suleiman Kerimov.

The deal is a rare example of China, the world’s largest consumer of potash, acquiring direct ownership of Russian natural resource assets, although it is only the latest in a series of commodity-related investments by CIC.

It also coincides with speculation that Kerimov might sell his 21.75 percent holding over a dispute that has soured Russia-Belarus relations.

Uralkali sent the $20 billion global potash market into turmoil when it quit the marketing alliance with state-owned Belaruskali. Belarus hit back by arresting CEO Vladislav Baumgertner after talks with the country’s prime minister.

Some investors believe the Kremlin wants to repair the alliance to avert a possible collapse in the price of potash, which accounts for 12 percent of Belarus’s state revenue.

“I can see little chance that the government would allow the Chinese fund to acquire a much larger stake,” said Boris Krasnojenov, an analyst at Renaissance Capital in Moscow.

“There is no similar precedent in Russia, and the eventual buyer would probably be a Russian player.”

There are no negotiations to sell Kerimov’s personal stake to CIC, a source close to the businessman told Reuters.”

via China gets stake in Russian potash giant to secure supply | Reuters.

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23/09/2013

Food security law may leave out many dalits, tribals

Times of India: “A good number of dalits and tribals may be left out of the ambit of the ambitious Food Security Act, with the socio-economic caste census reporting lesser number of households of the two communities than found by the decennial census, a fraught prospect that has led to jitters in the government.

As per the preliminary figures of socio-economic caste census (survey),1702 tehsils across 27 states have fewer SCs and STs than found in the decennial population census 2011. The census figures of SC/ST population exceed the survey numbers by 1%.

It implies that fewer SCs/STs would be part of the poverty list to be shortlisted by the much-awaited survey. Once finalized, the survey is to serve as the blue book of poor households for entitlement schemes and its first big use would be in the implementation of food security scheme that Congress has called a “game-changer”.

The discrepancy has been found in the poorest states like Bihar (124 tehsils), Madhya Pradesh (163), Odisha (132) as also in Andhra Pradesh (450) and Maharashtra (154). However, the absolute number of households in Andhra is not high because the tehsils are small in size, sources said.

According to sources, rural development minister Jairam Ramesh has shot off letters to 26 chief ministers and the administrator of Daman and Diu, seeking proactive initiative to detect omissions.”

via Food security law may leave out many dalits, tribals – The Times of India.

See also: https://chindia-alert.org/political-factors/indian-tensions/

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22/09/2013

Ukraine to become China’s largest overseas farmer in 3m hectare deal

SCMP: “China will plough billions of yuan into farmland in Ukraine that will eventually become its biggest overseas agricultural project.

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The move is a significant step in China’s recent efforts to encourage domestic companies to farm overseas as China’s food demand grows in pace with urbanisation.

Under the 50-year plan, Ukraine will initially provide China with at least 100,000 hectares – an area almost the size of Hong Kong – of high-quality farmland in the eastern Dnipropetrovsk region, mainly for growing crops and raising pigs.

The produce will be sold to two Chinese state-owned grain conglomerates at preferential prices. The project will eventually expand to three million hectares.

Ding Li, a senior researcher in agriculture at Anbound Consulting in Beijing, said the deal was a big move for China compared with earlier overseas agriculture.

In April 2009, China had slightly over two million hectares of farmland abroad, he said. “So three million hectares would mean a very big project.”

The agreement was signed in June between the Xinjiang Production and Construction Corps and KSG Agro, Ukraine’s leading agricultural company, XPCC said in a statement.

XPCC, also known as Bingtuan, is a quasi-military organisation established in Xinjiang in the 1950s to reclaim farmland and consolidate defences against the Soviet Union, whose “granary” at that time was, ironically, the Ukraine.

The statement did not reveal the value of the investment, but the Kyiv Post reported last month that it would be more than US$2.6 billion. The newspaper called it an “unprecedented foreign investment” in Ukraine’s agriculture sector.

This would make it China’s biggest reported lease or purchase of farmland overseas. The Beidahuang Group, China’s largest agribusiness, based in Heilongjiang province, and the Chongqing Grain Group have made similar moves to expand abroad.

The farming project was an important part of China’s food security programme and a response to the central government’s strategy of outsourcing the production of food to farms overseas, the statement said.

It would also help the XPCC expand, and provide jobs abroad for Chinese labourers and boost their incomes, it said.

China has made substantial agricultural investments elsewhere, notably in South America. Beidahuang acquired 234,000 hectares to grow soya bean and corn in Argentina, while Chongqing Grain paid US$375 million for soya bean plantations in Brazil and US$1.2 billion for land in Argentina to grow soya beans, corn and cotton.”

via Ukraine to become China’s largest overseas farmer in 3m hectare deal | South China Morning Post.

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30/05/2013

Smithfield Foods to be bought by Chinese firm Shuanghui International

Washington Post: “Smithfield Foods, whose signature hams helped make it the world’s largest pork producer, is being bought by a Chinese firm in a deal that marks China’s largest takeover of an American consumer brand.

The $4.7 billion purchase by Shuanghui International touches several sensitive fronts at once — the quick rise of Chinese investment in the United States, China’s troubled record on the environment and the acquisition of Smithfield’s animal gene technology by a country considered to be America’s chief global competitor.

Consumer spending was stronger than first thought, but businesses restocked more slowly and state and local government spending cuts were deeper.

What’s more, the deal puts a major company from a Chinese industry with a history of food-safety problems in charge of a U.S. firm with past environmental problems of its own.

Separately, U.S. government and business officials often complain that China uses strict control of its market of 1.6 billion people to force American companies that want to do business there to surrender intellectual property.

The deal may become a test of U.S. attitudes toward China as it moves through likely reviews by the Justice Department and the Committee on Foreign Investment in the United States.

With no obvious national security concerns stemming from the production of ham, bacon and sausage, Smithfield chief executive C. Larry Pope said he expects approval. He emphasized that the deal wasn’t about bringing Chinese pork products or management standards to the United States but about sending U.S. products and expertise the other way. The deal will leave intact Smithfield’s management, workforce and 70-year presence in Virginia, he said.”

via Smithfield Foods to be bought by Chinese firm Shuanghui International – The Washington Post.

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29/05/2013

A Premium Milk Brand for India’s Elite

WSJ: “India’s rich and elite like their premium services, from hopping on private jets to receiving Dior goods at their doorstep. But the simple things apply, too.

A premium milk labeled Pride of Cows counts among its consumers the cricketer Sachin Tendulkar, industrialist Mukesh Ambani’s family and Bollywood actor Hrithik Roshan, according to Parag Milk Foods Private Ltd.

Parag Milk Foods, the founder of Gowardhan dairies, launched the Pride of Cows milk in July 2011, initially marketing it as a “by invitation or reference only product” to select celebrities and industrialists.

According to a 2011 survey by the Food Safety and Standards Authority of India, 70% of the milk consumed in the country is adulterated.

Parag Milk Foods Chairman Devendra Shah says the Pride of Cows brand functions by the rule that “happy cows give better milk.” At its Bhagyalaxmi Dairy farm in Pune, around 3,500 Holstien Friesan cows are pampered with music, showers and specially designed nutritional meals, Mr. Shah says. “The result is milk full of love and high nutritional values.”

Parag Milk says it breeds its cows with imported bull semen from North America. Feed is tailor-made for cows of different ages, and the menu is changed regularly to include fresh seasonal crops and specials.

“This way we have complete control over the breed, feed and health of our cows, which in turn leads to complete control over the quality of milk,” said Mr. Shah.

“We have implemented ‘cow comfort’ technology, wherein our cows have soft rubber mats to lie on, streaming music, air-coolers to keep them cool, automated scrubbers to clean them and regular preventive healthcare checks,” added Edmund Piper, a U.K. national who was hired as the farm’s manager four years ago.

Parag Milk Foods signed up celebrities like writer Shobha De as Pride of Cows brand ambassadors, while it can count industrialist Raj Kundra, co-owner of the Rajasthan Royals cricket team, as a fan.

“Being a British-born Indian, I’ve always missed the milk from the UK. I can’t tell you how happy I was to sample this milk – it’s world class. I can finally start drinking milk and enjoying my cereal,” says an endorsement by Mr. Kundra on the Pride of Cows website.

Pride of Cows isn’t available in shops; it’s only delivered – in insulated boxes with ice bags — on subscription. It costs 75 rupees ($1.35) a liter, making it an expensive alternative to other milk, which generally costs around 35 rupees to 50 rupees in the markets. Nestlé milk is among the other brands available in India, costing 62 rupees a liter.”

via A Premium Milk Brand for India’s Elite – India Real Time – WSJ.

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11/05/2013

* Should China Try to Feed Itself?

BusinessWeek: “For China’s leaders, there was one problem in an otherwise benign inflation report for April. First, the good news: The consumer price index rose 2.4 percent, about in line with economists’ expectations. While inflation accelerated from 2.1 percent in March, the April figure is still well below the government’s target of 3.5 percent for the year.

An aerial view of the fish farms in the countryside next to Hefei, in central China's Anhui province

So what’s the catch? Food prices. With vegetables getting more expensive, the cost of eating jumped 4 percent last month, compared with an increase of 2.7 percent in March. The rising cost of food could create more difficulties in the coming months, the People’s Bank of China warned yesterday.

The Chinese government is well aware of the political sensitivity of food, which is one reason the country is sticking to a policy that promotes self-sufficiency. The country’s farmers met about 98 percent of China’s demand for grain last year, Vice Minister of Agriculture Chen Xiaohua said at a news conference in March.

If the country wants to ensure lower prices, though, China should rethink that self-sufficiency policy, argues Paul Conway, the vice chairman of Cargill. “As they become richer and more urbanized, they will have to become less self-sufficient in grain,” he says. The Minnesota-based agribusiness giant is a major player in exporting wheat, corn, and soybeans from the U.S. and other countries in the Western Hemisphere to Asia, so he certainly has a good business reason for wanting China to buy more food from abroad.

But, Conway says, China and other Asian countries with huge populations, such as India and Indonesia, stand to benefit from reducing their reliance on local farmers. “There is still a tendency in some parts of Asia to food security through food self-sufficiency,” he says from Singapore, where he gave a speech on May 8 about food security. Giving up on that idea and instead importing food from low-cost producers in the U.S., Canada, Brazil, and Argentina would be “the best guarantee of Asian food security,” he says. “For grains and oilseeds, Asia’s self-interest is to have access to the surpluses from the Western Hemisphere.”

In order to bolster its food security, China also should be investing in agricultural infrastructure in other countries, Conway says. Just as Chinese investors are helping to fund transportation projects in African countries that supply minerals to China’s factories, the country should also be putting money into projects that could make it easier for farmers in places like Brazil to get their crops to seaports. That, he argues, makes more sense than just buying farms overseas. “From a food security standpoint, the fact that you own land in another country doesn’t guarantee you anything. Borders can always be closed. If China wants to improve the flow of grains, instead of investing in land, invest in infrastructure.””

via Should China Try to Feed Itself? – Businessweek.

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