Organic Agriculture Investment: Only Looks Nice in China?

"China's market capacity of organic agriculture produces will reach USD7.94 billion (RMB50 billion) in 2015." Professionals predicted at Organic Expo Beijing 2011 held during 17-19 November 2011. "The global demand for organic agriculture produces has been increasing with a CAGR of 20%-30%." a responsible official of the Organizer of Organic Expo Beijing 2011 estimated, according to CCM’s February issue of AgriChina Investor.

 

According to CI Consulting, a leading professional institution in the field of industry research in China, certified organic farmland in China reached 2.45 million ha. in 2010. The sales value of organic agriculture produces was USD2.15 billion (RMB14.54 billion) in 2010, and the export value was USD95 million that year.

 

The expectation of USD7.94 billion (RMB50 billion) in domestic market indicates an over 28% year-over-year growth of the sales value of organic agriculture produces in 2011-2015, based on the estimated sales value of organic agriculture produces in 2010.

Chinese organic agriculture is based on traditional sustainable farming practices which started thousands of years ago. In China, records of sustainable farming dating back 4,000 years mention several organic practices including crop rotation, composting and diversified production. Chinese modern organic agriculture began in late 1980s, initially driven by environmental concerns and later by export opportunities.

Domestic market of organic products began developing in mid-2000s and has expanded very rapidly, especially in recent five years when some food scandals have been disclosed.

The significant growth of organic agriculture produce market is attributed by the following reasons:

First, the steady and rapid growth of China's economy in the past decades has led to the increasing number of rich people who have higher demand on food quality.

Second, media reports about food scandals and risks on GMO foods help to promote the consumption of organic produces in China.

Third, China's depressed export of organic produces in the past few years has led to significant investments in developing domestic market, accelerating the growth of domestic organic produce market.

Because of the high expected growth potential in China's organic food market, organic agriculture projects have attracted more and more PE/VC investors.

 

Shanghai Tony Agriculture Development Co., Ltd. ("Tony's Farm"), now Shanghai's largest organic produce player, acquired a VC investment of USD10 million from Tsing Capital in November 2010. In late 2011, Tony's Farm has successfully achieved the second round capital-raising from four PE bodies (DT Capital, Delta Capital, KPCB and HTO Capital). It's reported that Tony's Farm has screened out the final four investors from more than ten interested investors in the second round capital-raising.

  

YMT Organic Farm Co., Ltd., an organic vegetable producer found in Shanghai in 2008, has successfully raised a capital of USD3.17 million (RMB20 million) from PE bodies in late 2011.

However, the high growth potential in domestic demand for organic agricultural produces, predicted by many professionals, can't cover the plight of current organic food market.

 

There were many reports on the depressed market that organic agricultural produces encountered at supermarkets. The main reason for the depressed sales is the high price. The price of organic agricultural produces is usually 1.5-3 folds of that of traditional products, and it can't be afforded by most residents.

 

Another key reason is that some of the marked "organic products" with high price may be not real organic products, and there are some reports on that. The key reason for the false mark of organic product is the loose certification supervision system in China.

 

According to the data from the Certification and Accreditation Administration of the People's Republic of China, up to 23 February 2012, there are 23 active certification bodies who own the authority of offering organic product certification service. There are 7,934 active certifications, of which 7,877 are achieved by domestic companies and 57 achieved by overseas ones.

 

Many professionals disclosed that some certification bodies of organic agricultural produces haven't strictly followed the certification principle and process.

Food scandals and false labels of "Green food" or "Organic food" have had a serious and negative impact on the trust of Chinese consumers in domestic food safety and guarantees, such as certification.

 

Some consumers, especially those high-end consumers, prefer to buy imported products or those with foreign certifications which are viewed as more trustworthy. And committed organic food consumers pay greater attention to certain product brands and suppliers.

As to most local producers of organic agriculture produces, sales of products is the biggest problem, and thus it's hard for them to get investment return within a normal payback period as traditional agricultural investment does, let alone the expansion of capacity.

With citizen's increasing concern on "food safety" and enhancing purchase power, more and more Chinese residents will choose organic agricultural produces. However, the contribution of increasing demand to China's organic agriculture industry is mainly determined by residents' disposable income, the cost-effectiveness of organic agriculture produces and residents' confidence in the quality of organic agriculture produces. Besides, the convenient use and accessibility are also important factors that impact consumers' purchase.

 

Chinese government should regain consumers' confidence by introducing stricter rules and regulations, focusing on production management supervision and certification body supervision, etc.

 

Meanwhile, producers of organic agriculture produces should rely more on quality control, brand consolidation and sales mode improvement in the future.

Source: AgriChina Investor

http://www.cnchemicals.com/Newsletter/NewsletterDetail_192.html

Content of AgriChina Investor 1202:

Multinational companies eye coffee market in China

Pengxin seeks overseas expansion in dairy industry

Xinjiang Chalkis and Yihai Kerry failed in further cooperation

Who will be the RMB10 billion pesticide player in China

2011 Import of agricultural produces surges in China

Scale breeding to play more important role in China's pig industry

Chinese rapeseed industry confronting serious loss

Profits of Chinese dairy industry up 34.70% in 2011

Pesticide demand expected to increase by 4.37% in 2012 

China raises grain purchasing price in 2012

2011 trade of aquatic products maintains fast growth in China

Brand value of Yantai apple rises to USD1.46 billion

Organic agriculture investment: Only looks nice in China?

China released Draft of Grain Law to safegurad grain security

China instructs development of potato industry till 2015

Agricultural insurance in China to be promoted by policy support

Agricultural logistics' problems become increasingly prominent

……

AgriChina Investor, periodically published on 25^th every month, offers timely update and close follow up of agriculture investment in China, analyzing market data and trends, as well as related policies. Major columns include investment environment, investment dynamics, market watcher, market review etc.

If you are interested in AgriChina Investor, please do not hesitate to contact us by +86-20-37616606, or email us at econtact@cnchemicals.com.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer. For more information, please visit http://www.cnchemicals.com.

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_988.html

Fungicide Import and Export Increase in Q1~Q3 2011

The December Issue of Fungicides China News has been released by CCM International recently, indicating that both import and export of fungicides increase  in Q1~Q3 2011.

Both import and export of fungicides in Q1~Q3 2011 have witnessed increase to a certain extent, according to the survey of General Administration of Customs of the People's Republic of China (GAC).

The import and export volumes of pesticides have reached around 41,000 tonnes and 611,000 tonnes respectively (calculated by physical quantity, similarly hereinafter) in China in Q1~Q3 2011, resulting in a favorable balance of USD1.47 billion.

It is worth noting that the import volume of fungicides is the largest among the three major pesticide categories, namely herbicides, insecticides and fungicides, at home from Jan. to Sept. 2011, hitting about 15,000 tonnes, up 33.40% year on year.

In addition, the import value of fungicides has witnessed significant growth of 38.80% year on year in Q1~Q3 2011, accounting for 42.11% of the import value of pesticides in China.

In terms of export, compared with insecticides and fungicides, the export volume of herbicides is the largest, reaching 377,000 tonnes and taking up 61.70% of the total export volume of pesticides in China from Jan. to Sept., 2011.

Although the export volume of fungicides is the least compared with those of herbicides and insecticides in Q1~Q3 2011, it has increased by 23.80% year on year to 59,000 tonnes, with its export value witnessing a remarkable rise of 43.70% to USD0.29 billion.

The increasing demand for fungicides from domestic and overseas market is the most important factor to speed up its import and export in China in Q1~Q3 2011. It is estimated that both import and export of fungicides will keep rising in the rest of 2011 for the booming fungicide market around the world.

All findings are from CCM International’s Fungicides China News. If you are interested in this newsletter, please do not hesitate to contact us at econtact@cnchemicals.com.

Headline News of Fungicides China News 1112:

-Nantong Baoye plans to relocate its factory in Rudong Coastal Economic Development Zone of High-tech Industrial Park, and the company will expand the capacity of its products accordingly.

-Over 65% of thiabendazole is used in the fresh-keeping for orange in domestic market.

-Both import and export of fungicides have witnessed increase in China in the first three quarters of 2011.

-Hisun Chemical's oxine-copper development project has successfully passed the acceptance evaluation recently, according to ZPECIC.

-The demand for pesticides will hit as high as 313,652 tonnes in China in 2012, increasing by 2.48% compared with that in 2011.

-Zibo Wanchang's trimethyl orthoformate capacity will hit 10,000t/a by H1 2012.

-Fungicides are in hot registration in China in the third quarter of 2011.

-Registration of kresoxim-methyl formulations has witnessed increase to a great extent in China since early 2011.

-The ex-factory price of prochloraz 97% TC has turned high, reaching around USD9,365/t in early Dec. 2011

-Wheat stripe rust has seriously occurred in winter wheat planting regions of Gansu recently.

-Kasugamycin needs to strengthen promotion as its market share has been experiencing ruthless crush from some chemical fungicides in recent years.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

For more information, please visit http://www.cnchemicals.com.

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_c_897.html

Both Import and Export of Fungicides Rise in Q1-Q3 2011

Recently, the General Administration of Customs of the People's Republic of China (GAC) has released the result of China's pesticide import and export in the first three quarters of 2011, showing that both import and export of fungicides have witnessed increase to a certain extent, according to CCM’s November Issue of Fungicides China News.

All in all, the import and export volumes of pesticides have reached around 41,000 tonnes and 611,000 tonnes respectively (calculated by physical quantity, similarly hereinafter) in China in the first nine months of this year, resulting in a favorable balance of USD1.47 billion.

It is worth noting that the import volume of fungicides is the largest among the three major pesticide categories, namely herbicides, insecticides and fungicides, at home from Jan. to Sept. 2011, hitting about 15,000 tonnes, up 33.40% year on year, accounting for 36.59% of the total import volume of pesticides.

However, the import volumes of both herbicides and insecticides have decreased by 22.40% and 26.00% year on year to about 14,000 tonnes and 5,600 tonnes respectively all over the country in the first nine months of 2011.

In addition, the import value of fungicides has witnessed significant growth of 38.80% year on year in the first three quarters of 2011, accounting for 42.11% of the import value of pesticides in China. Meanwhile, insecticides and herbicides have seen decreases, down 11.60% and 8.70% compared with those of the same period of last year.

In terms of export, compared with insecticides and fungicides, the export volume of herbicides is the largest, reaching 377,000 tonnes and taking up 61.70% of the total export volume of pesticides in China from Jan. to Sept. 2011.

Although the export volume of fungicides is the least than those of herbicides and insecticides in the first nine months of this year, it has increased by 23.80% year on year to 59,000 tonnes, with its export value witnessing a remarkable rise of 43.70% to USD0.29 billion.

The robust demand for fungicides from domestic and overseas market is the most important factor pushing up its import and export in China in the first nine months of this year. It is estimated that both import and export of fungicides will maintain soaring up in the rest of 2011 for the booming fungicide market around the world.

Source: Fungicides China News 1112

http://www.cnchemicals.com/Newsletter/NewsletterDetail.aspx?id=2

Main content of Fungicides China News 1112:

Nantong Baoye to relocate factory in RCEDZHIP

Mesa Tech launches azoxystrobin 250g/L SC in China 

Huaxing Chemical merges KaJo Agrochemical

Limin Chemical applies for IPO again

Thiabendazole mainly used in fresh-keeping for orange in China

1-(4-chlorophenyl)-4,4-dimethyl-3-pentanone in short supply recently

Both import and export of fungicides rise in Q1-Q3 2011

Hisun Chemical's oxine-copper development project passes acceptance

China's pesticide demand to rise 2.48% year on year in 2012

Zibo Wanchang to expand trimethyl orthoformate to 10,000t/a by H1 2012

Fungicides in hot registration in Q3 2011

Registration of kresoxim-methyl formualtions witnesses increase in 2011

Ex-factory price of prochloraz technical turns high in early Dec. 2011

Wheat stripe rust occurs seriously in Gansu recently

Fungicides China News, a monthly publication issued by CCM International on 10th of every month, provides a wealth of exclusive information and analysis, research and development dynamics of domestic competitors, analysis on import and export of key products, cooperative opportunities with domestic and foreign companies, and market information of foreign patent-expired products.

About CCM

CCM is dedicated to market research in China, Asia-Pacific Rim and global market. With a staff of more than 150 dedicated highly-educated professionals. CCM offers Market Data, Analysis, Reports, Newsletters, Buyer-Trader Information, Import/Export Analysis all through its new proprietary product ValoTracer.

For more information, please visit http://www.cnchemicals.com.

CCM International Ltd.
Guangzhou CCM Information Science & Technology Co., Ltd.
17th Floor, Huihua Commercial & Trade Mansion, No.80 Xianlie Zhong Road, Guangzhou 510070, China

Tel: 86-20-37616606

Email: econtact@cnchemicals.com

Source: http://www.cnchemicals.com/PressRoom/PressRoomDetail_w_890.html