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Agriculture was once named fundamental industry, but with green revolution, agriculture has been recognized as strategic industry. Agricultural chain is relatively long, from the upstream part (such as fertilizers, pesticides, fodder, seeds and machinery) to planting or breeding, and then extents to products processing. It is very significant for investors to know
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which part of the chain they should invest in. The investors who are running industrial investment funds usually try to explore the entire chain, but PE/VC has to select certain parts of it.
Invest in upstream of agricultural chain
In the part of the chain, seeds, machinery, pesticides and fertilizers are sub-industries having potential. Due to large-scale breeding development, feed industry has been mature. But seed industry as the most profitable sub-industry in agriculture field, is still at the infancy stage. Chinese seed market size is about RMB 50 billion and is expected to grow twice or triple times in next three years. In which hybrid corn, hybrid rice......
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During the most recent year, vegetable prices keep rapidly rising and fluctuate substantially, particularly in certain varieties like garlic and pepper. Based on years of research, BOABC summarizes 12 reasons for vegetable prices increase.
1 Seasoning factor: vegetable prices usually begin to rise on September and October because vegetables growth slow down in the season except certain varieties such as Chinese cabbage. In summer, high temperature and rainstorm would impact on vegetables production, shortage and transportation. Therefore, vegetable prices would increase rapidly during a short time in certain areas
2 Cost: the cost of seeds, fertilizers, facilities and labor is rising continuously in recent years. Meanwhile, storage and transportation fees are also increasing which is related to a number of factors such as fridge, preservation and petrol oil price.
3 increasing distance between production areas and selling areas: with urbanization, the size of cities in China keeps enlarging causing increasing distance between vegetable production areas and selling places Therefore, the cost of transportation and storage goes up.....
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China¡¯s cotton acreage in this year parallels last year and production may go up slightly. But domestic cotton production lags far behind the demand, conducive to a high cotton price.
Due to serious inflation, investors favor commodities more than capital, only to push up commodity price as a result. Because of the wide gap between cotton demand and supply, cotton price rises faster than that of other farm products. Considering the profuse capita supply and the rate of economic growth, most commodities¡¯ price is predicted to rise at a pace of 10%, but cotton price growth is predicted to exceed this pace....
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China¡¯s soybean imports registered 4.77 million MT in Aug., a sharp increase of 52% on the year-on-year basis. Soybean imports are predicted to reach 49 million MT this year, 19% more than last year.
The current soybean stock at Chinese ports is 5.93 million MT, 340,000 MT less than last month. As domestic soybean harvest is around the corner, soybean imports are surmised to slow down in the short run. World soybean stock is predicted to be 63.61 million MT at the end of next year, an increase of 1.2% on the year-on-year basis, suggesting abundant supply in the international market.... |
Given that Chinese soy import is expected to increase continuously in the second half of 2010, soybean oil production would increase. Meanwhile, the demand for soybean oil in Chinese market would rise as well but less then the incremental of supply. Therefore, soybean oil supply is expected sufficient in 2010/2011.
In the second half of 2010, soybean oil production in China is estimated 9.29 million MT increase by 6.5% on a year-on-year basis. Imported soybean is estimated 2 million MT increase by 43% on a year-on-year basis. Accordingly, the supply of soybean oil is expected to go up 11%. Meanwhile, domestic demand for soybean oil would reach 10.91 million MT increase by 10% on a year-on-year basis, but the incremental of demand is less than the incremental of supply....
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Prices at Fonterra ¡®s monthly internet auction of dairy products bounced overall. The average auction price of butter oil is $ 4681/ton, increase $379 by 9.5% compared to August. Skimmed milk powder prices average $3197/ton, increase $428 by 15.8% compared to August. Whole-fat milk powder prices average $3522/ton, increase $548 by 18.8% compared to August ... |
Considering the production and import of natural rubber in China, it is estimated that the total supply of natural rubber in China could reach 210,000 MT in September. And domestic consumption would be 140,000 MT in September. The inventory is expected to increase. In short term, the supply would go up. But it is consumption season in September and October. The prices of natural rubber will show a fluctuating upward trend. In long term, the supply in 2010 is generally insufficient, which drives the prices rising to a high level... |
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key words :Agricultural chain investment , Vegetable prices rise , Cancel dairy import ban , Administrative accountability , Melamine |
About cancel the ban of dairy import from FMD countries
AQSIQ recently issued the announcement of approving import from FMD countries. That means the ban of import dairy from FMD countries such as Japan taken effect in April is cancelled.
Mr. Chen Lianfang explains it will have deep influence on Chinese dairy industry .....
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Cheese is a dairy product with best nutritional value and health care function, and it is widely popular in many countries in the world with good taste and diverse flavor. In countries with developed dairy industry and some developing countries, cheese occupies an important position in the residents¡¯ dietary structure. To some extent, per capita cheese consumption is an important measure of dietary quality and level......
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Potash Corporation, the world's largest fertiliser producer, probably doesn't want China to win control in a takeover war with BHP Billiton, says an analyst at Beijing Orient Agribusiness Consultant.
"China's potash demand will be more substantial in the long run than that of Brazil's or India's," said Xu Hongzhi."Who would want their biggest customer potentially to take control and tell them ....
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1.Special Report on China's Corn Seed Market in 2010
2.Special Report on China's Seed Market in 2010
3.Research Report on Application of D70 & D90 in the Market of Formula Milk Powder for Infants in China
4.Special Research Report of China's Coffee Beverage Market 2010
5.Research Report on Wheat and Processed Products in China
6.Research Report on China¡¯s Dairy Cattle Farming Industry
7.China's Cheese Market Research |
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