Cargill promises to prevent food panic in China

07.11.2014

Even against the backdrop of a slowing economy, food safety scandals in China drew demand for higher quality products in an upward direction.
Representatives of the leading trader of raw material Cargill Inc said that the scandals in the area of food safety in China have increased the demand for higher quality products, that would sustain consumption of protein-rich farm commodities even against the backdrop of a slowing economy.

China is toughening its fight against food safety violators in the face of rising incidents of food scares since a deadly scandal in 2008.

The country, the world’s leading importer of soybeans and corn, is moving toward modern mechanized plants requiring higher volumes of grain-based feeds.

A growing middle class, which craves for more protein-rich and safe food, will also ensure China’s consumption of agricultural commodities at a high level even despite the fact that economic growth slows to 6-7%.

The Cargill management also expressed confidence in the emergence of middle class that will demand greater variety and better quality products not only in China, but also in Asia.

Issues in the supply chain in China came under increased scrutiny after YumBrands Inc, Wal-Mart Stores Inc and McDonald’s Corp. all faced with food safety issues of goods delivered.

According Cargill, China’s transition to the expansion of the economy, stimulated by consumption, as well as slow development in the field of environmental protection, healthcare and education also require a great deal of high-quality goods.

Cargill, along with Archer Daniels Midland, Bunge Ltd and Louis Dreyfus is a company that dominates global grain trade.

With sales of $134.9 billion in fiscal 2014, Cargill expects its global grain business to double in 7-8 years, considering growing consumption pace of Asia, supported by thriving consumption in China, India and Indonesia.

The company is represented in the food supply chain in China- the import of grains and oilseeds, animal feed production, breeding chickens and manufacturing of products such as sweeteners and cereals.

Cargill is building its fourth soybean processing plant in China.

Company representatives are convinced that the world prices for grains and oilseeds are highly unlikely to fall below multi-year lows seen in October, when U.S. farmers constrained supplies.

Despite a record grain harvest in the U.S. and in the world, global demand for food is growing rapidly, which keeps the agricultural industry on its toes.