Tag Archives: Prices

GLOBAL – G20: Ministers Agree To Fight Volatility Of Ag Prices – June 24, 2011

GENERAL – At the G20 Farm Ministers meeting, 20 of the most powerful economies in the world have agreed an action plan to fight against the volatility of agricultural prices.

Together, the G20 nations committed to increasing agricultural production through use of improved practices and technologies and a commitment to new and expanded research and development.

“The need for market transparency and consistency with science-based rule-making systems among our nations and the international community is stronger than ever,” said US Secretary of Agriculture, Tom Vilsack.

“Purposefully then, we support establishing the groundwork for an international agricultural market information system, or AMIS, that if fully supported and utilised, will mitigate volatility and reduce market distorting signals by promoting greater shared understanding of food production and price information.”

“This is a tour de force for the international community,” French Minister of Agriculture, Bruno Le Maire added.

“The consensus reached this week by the Ministers of Agriculture is a historical unity to solve the pressing challenges of hunger and the volatility of food prices,” Secretary Vilsack concluded.

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CHINA – China Dairy Has Lowest Quality Standards – June 20, 2011

CHINA – China’s dairy industry has the lowest quality standards in the world and much of the blame is down to the large companies that dominate it and the rock-bottom prices they pay farmers for raw milk, industry experts told China Daily.

“Milk processors and farmers all know that the problems of low protein content and high bacteria counts in milk are easy to solve with money but they have instead reduced investment because of the low profit margins,” said Wang Dingmian, the former vice-chairman of the Guangdong Provincial Dairy Association.

Mr Dingmian told China Daily on Sunday that, if cows are fed enough, the protein content of the milk they produce would rise within a week. He said dairy farmers have instead reduced the amount of feed they give their animals because of the low price they get from the big dairy companies for the milk they produce.

The high bacteria count in milk is also caused by insufficient capital investment.

“The prolonged duration and high temperature during milk processing has caused the multiplication of bacteria in the milk,” he said.

China relaxed its national milk quality standards in 2010, increasing the maximum limit of bacteria acceptable in raw milk from 500,000 per milliliter to 2 million per milliliter and lowering the minimum requirement for protein content from 2.95 grams per 100 grams of milk to 2.80 grams.

Statistics show that international standards for protein content call for 3 grams per 100 grams of milk. The acceptable amount of bacteria in raw milk in Europe is 100,000 per milliliter.

“The revised standards for raw milk, normal-temperatured milk and pasteurized milk were drafted by two Chinese dairy giants – Mengniu Dairy Co Ltd and Yili Industrial Group,” Mr Dingmian said.

Food safety experts claimed the dairy giants helped ensure there were looser standards in place because some of their branch plants could not meet higher standards.

“It’s common that branches don’t keep up with the standards of the parent company,” said Sang Liwei, a food-safety lawyer and the China representative of the NGO Global Food Safety Forum.

In April, 251 children at Yuhe township primary school in Yulin, Shaanxi province, fell ill after drinking school milk manufactured by one of Mengniu’s local plants in the province. Test results released later said the milk met China’s national standards.

“This shows the national standards for milk quality are imperfect,” Mr Liwei said.

“A lot of bacteria in milk may mean microbiological problems occur more easily,” Mr Liwei said. “If companies handling the milk do not strictly follow procedures for the storage and transportation of the milk, there will be food safety incidents.”

Mr Dingmian suggested that a flexible policy be brought in under which high prices are paid to farmers for high-quality milk, so farmers are motivated to ensure their farms produce better quality raw milk.

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INDIA – Goa Dairy Increases Milk Price For Farmers – June 17, 2011

INDIA – Goa Dairy has announced a one rupee (Rs) per litre hike in the prices it pays to dairy farmers in Ponda.

According to the Times of India Goa Dairy has been hiking milk prices slowly since February 21 in order to meet the price rise of milk supplied from neighbouring states.

The cost of milk available to consumers in Goa has risen by Rs 4 since February. However, Goa Dairy did not increase the purchase price of milk that it procures from Goan dairy farmers.

Goa Dairy chairman Madhav Sahakari said that the one-rupee increase in price will be given to cow and buffalo milk suppliers. After taking charge in November 2006, the present board of directors has increased milk prices on six occasions.

Meanwhile, Goa Dairy’s managing director Sadanand Kulkarni said the increase in the purchase price will create an additional burden of Rs 14 lakh per month and Rs 1.64 crore per annum.

Goa Dairy presently sells 71,000 litres of milk per day in the Goan market. Of this, 33,000 litres of milk are supplied by local farmers, while 38,000 litres of milk are procured from neighbouring states. After this resolution, the dairy will pay Rs 21.48 per litre plus Rs 3.33 to Goan dairy farmers. Outstation dairy farmers will be paid 21.90 per litre, Mr Kulkarni said.

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NEW ZEALAND – Strong Year Expected For NZ Meat & Dairy Exports – June 14, 2011

NEW ZEALAND – Broad-based, steady and sustainable demand for many agricultural commodities is expected to underpin New Zealand’s export income for the medium term, a Ministry of Agriculture and Forestry report shows.

The annual Situation and Outlook for New Zealand Agriculture and Forestry (SONZAF) shows New Zealand exporters are receiving historically high prices in foreign currency terms for beef, dairy, lamb, logs, timber and wool products, with the returns expected to continue into the medium-term.

MAF Director-General Wayne McNee says the steady pick-up in fortunes for the primary sectors is notable for its breadth and consistency.

“Adverse climatic events in New Zealand and other producing areas have had an effect in driving up some prices.

“But the majority of our primary sectors should be able to look forward to a period of sustained growth, which will enable recovery of balance sheets, reinvestment and some breathing space after a tough few years.

“As with all forecasts SONZAF is subject to unforeseeable factors such as extreme weather events and unexpected currency movements, but what it shows is that many of the sectors have their fundamentals in order and are well positioned to take advantage of strong international demand for our products.”

The relatively strong New Zealand dollar reduces the gains passed through to New Zealand farmers, growers and foresters. On the other hand, it also reduces the effective cost of imported rural inputs such as fertiliser.

Highlights

Beef: New Zealand beef production is down about nine per cent this season as a result of reduced cattle numbers and lower carcase weights due to adverse weather.

Prices for New Zealand manufacturing beef in the key United States market reached historical highs during the 2010/11 season, due to reduced supply and strong demand.

In the medium term international beef supply is expected to increase, but still remain slightly behind growth in demand, underpinning higher average prices.

Dairy: Dairy production in the 2010/11 season started below expectations due to widespread spring drought and slowed rate of dairy conversions. However favourable autumn weather lifted milk solids production – continuing after SONZAF went to print – resulting in an estimated four per cent increase. A further four per cent increase in production is now expected in the 2011/12 season.

International dairy prices in the 2010/11 season were up due to strong demand. In the medium term increased supply is expected to moderate this.

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AUSTRALIA – Milk Inquiry Second Interim Report Released – May 11, 2011

AUSTRALIA – A parliamentary committee investigating AU$1-a-litre milk says it can’t make any recommendations until it knows if the current low prices are permanent. Releasing the second interim report earlier this week, the committee said that it wanted to wait and see what impact the discounting had on contracts with processors and farmgate prices before taking action.

The committee pointed out that only 25 per cent of Australian milk production is used for drinking milk and only about 13 per cent of national milk production is sold in supermarkets as drinking milk.

The report said: “While the committee is mindful of the many submissions outlining the potential impacts of lower supermarket milk prices on the dairy industry, it is equally cognisant of the benefits to consumers from sustained lower prices. As a general rule, lower prices are good for consumers.”

“Provided farmers have the opportunity to make a reasonable profit and in the absence of substantiated damage to the dairy industry, the interests of consumers must not be overlooked.”

The committee is seeking further information regarding the duration of the “Down Down” campaign and the outcome of renegotiated contracts with the processors and impact on farmgate prices.

Further or new submissions are invited.

A final report will be released by 1 October 2011.

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VIETNAM – Vinamilk, Nutifood hold line on prices – May, 12 2011

HA NOI — Vinamilk and Nutifood, two leading manufacturers of dairy products and baby food, signed an agreement not to increase the prices of milk powder for children under 12 months and the elderly until the end of the year.

The deal took place during a meeting on Tuesday with the HCM City Department of Industry and Trade regarding the City’s price stabilisation programme.

Le Ngoc Dao, deputy director of the HCM City Department of Industry and Trade, said that the two companies were set to complete price registration at the City Department of Finance for appraisal. Retail prices on the two lines of products would be announced early next week.

In addition, to support business, the City department, in coordination with relevant departments, will disclose nutritional indicators on milk products in the market to enable consumers to choose the best products.

The current number of goods includes 6,000-6,300 tonnes of products which accounts for around 30-35 per cent of market demand in terms of children and the elderly in HCM City.

HCM City is currently implementing a price stabilisation programme aimed at four commodity groups including food, medicine, milk and other items in preparation for the coming school season. Total programme spending is set to reach VND412 billion (US$19.8 million).

The two companies committed to keep dairy prices unchanged until the end of 2011, despite possible increases in input cost, and both companies are not subject to capital support by the City authority.

Tran Huu Duc, head of the external affairs department at Nutifood, said that his company selected the two lines of products in commitment to better support child and elderly consumers. — VNS

In response to potential market price fluctuations, Duc said that his company planned to balance income and expenditure in terms of other products in order to help keep prices stable. — VNS

Information VNS

Vietnam Official : Dairy firms break rules with price hike

Milk producers have violated pricing regulations as they raised prices without government consent by around 10 percent a few days after the recent dong devaluation, a senior official says.

Nguyen Anh Tuan, deputy head of the Price Management Department under the Ministry of Finance, said even if the companies had a legitimate reason to raise prices, they needed to obtain approval from the authorities.

No action to correct the violations has been announced.

The State Bank of Vietnam on Friday last week devalued the dong by 9.3 percent against the dollar.

Many retailers in Hanoi told Thanh Nien prices of various milk products were increased on Tuesday. Foreign-invested dairy firm Friesland Campina Vietnam and 3A Pharma, the official distributor of Abbott in Vietnam, are among the companies that have hiked their prices or announced plans to do so.

The two companies, together with five other dairy firms, are named in the Ministry of Finance’s list of 150 companies that must register their prices.

The list, announced last October, has been protested by foreign business groups. However, local authorities have said it was legitimate to ask for price registration and the country had not violated any WTO rules.

Information from ThanhNienNews