WorldWatch:

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Alliance Tuna to acquire Hiep Thanh Seafood in Vietnam
[6 July 2010] Philippine tuna processor Alliance Tuna International plans to acquire Vietnam fish processor Hiep Thanh Seafood in a move to extend its product range into Vietnamese catfish and market it globally through its worldwide sales networks. Alliance Tuna has signed a memorandum of agreement with Hiep Thanh for a 90-day due diligence as it is looking to buy a 51% stake for USD 13.1 million. It said Vietnamese catfish is gaining popularity due to its white flesh and affordable price. The company will use its existing marketing channels and direct access to supermarket chains around the world to distribute the Vietnamese catfish products.

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Jollibee forecasts higher Q2 sales
[7 July 2010] Jollibee Foods Corporation (JFC) said its sales will continue to grow in the second quarter, thanks to higher spending boosted by the Philippine national elections. JFC Chairman and CEO Tony Tan Caktiong also said that barring any unforeseen events, the company is expecting its systemwide sales to grow for the entire year. During the first quarter, JFC reported an 8.4% growth in systemwide retail sales, which is a measure of all sales to consumer to PHP 16.3 billion (USD 34.45 million). As part of its PHP 4 billion (USD 86.11 million) capital expenditure program, the company plans to open 200 stores across all its brands in both the domestic and overseas market. Last year, JFC opened 168 stores worldwide, 58 of which are overseas.

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Economic Aspect of Agriculture in 2010 and Beyond
The economic aspect of agriculture for 2010 shows more stability compared to the economic outlook for 2009, according to an annual joint report by the UN's Food and Agriculture Organisation (FAO) and the Organisation for Economic Co-operation and Development (OECD) entitled Agricultural Outlook 2010-19. Rachel Ralte, Junior Editor of ThePigSite, provides a brief outline of the Outlook.


The poverty-stricken, particularly in developing nations, are usually most affected by agricultural blows such as high oil prices, commodity price hikes, recession etc. The world’s hungry is now estimated at more than one billion people. However, 2010 has seen the return of a certain degree of normalcy in various world markets. Production is getting closer to historical levels and demand is slowly recovering.

However, the governments of several countries are still anxious about the repetition of these agricultural shocks. They are concerned that energy prices, exchange rates, and/or the macroeconomic performance of key countries and regions may be negatively affected.

According to the Outlook report, "The macroeconomic environment underlying the commodity projections is more positive than in the 2009 Outlook." The world began to recover in late 2009. A gradual transition towards improved sustainable growth has been observed. An increase in oil prices is likely to increase input and production costs. This is expected to affect crop supplies, prices and trade flows, and reinforce feedstock demand for biofuels.

Growth of global agricultural production is forecast to be slower within the next decade, but in the absence of unexpected blows, growth remains on track with estimated longer-term requirements.



Net Agricultural Production for selected countries (index 2004-06=100)
[Sources: OECD and FAO Secretariats]
In the current Outlook report, average crop prices are projected to be above the levels of the decade prior to the 2007/08 peaks. As for livestock products, average meat prices in real terms, other than pig meat, are expected to surpass the 1997-2006 average over the coming decade. Pig meat prices are expected to stay relatively subdued due to an anticipated increase in supply from Brazil and China.



Change in production of crop and livestock products
(per cent change 2019 compared to 2007-09)
[Sources: OECD and FAO Secretariats]
Biofuel markets are dependent on government incentives and mandates. However, prospects remain uncertain mainly because of unforeseeable factors such as future trends in crude oil prices, changes in policy interventions and developments in second-generation technologies. An additional demand for feedstocks such as wheat, coarse grains, vegetable oils and sugar is expected as a result of expansion of biofuel production.

According to the report, "Developing countries will provide the main source of growth for world agricultural production, consumption and trade." Also, food consumption in developing countries will become less responsive to price and income changes as a result of increasing affluence and an expanding middle class.

For an extended period after world primary commodity prices fell following the price surge of 2007-2008, food prices remained high in many places. Last year, inflation of food prices fell considerably, but it remains highly significant in certain developing and emerging countries.

There has also been a considerable increase in short-term price volatility since the 2006-2008 price hike. The extent to which world prices are transmitted to domestic markets depends largely on the country in question and also on the level of market integration.

The report states: "At the international level, the uncoordinated policy actions of governments during the 2006-08 price spikes exacerbated volatility and impeded access to markets." Governments need to assure countries that there will be an unhindered access to global supplies and improved confidence in market functions.

 

June 2010

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Philippines considering nuclear energy: Aquino
Agence France-Presse
Posted at 07/13/2010 9:30 AM | Updated as of 07/13/2010 9:30 AM

MANILA, Philippines - The Philippines may turn to nuclear energy to solve power shortages in the impoverished nation, President Benigno Aquino said Monday.

"We are studying the possibility of using nuclear energy as a source of power," Aquino, who took office on June 30, told reporters. "I'm awaiting the Department of Energy secretary's recommendations."

He said the technology could come from South Korea, without elaborating.

But he said he was reluctant to rebuild a plant completed a quarter of a century ago under the Marcos regime but never used.

Aquino's statement came four months after a cousin, House of Representatives member Mark Cojuangco, inspected a turbine generator and other nuclear equipment being auctioned by South Korea.

Cojuangco has also said the government should seriously consider reviving the Bataan nuclear power plant, which was completed in 1984 after eight years of construction by the government of the late dictator Ferdinand Marcos.

Built 60 miles (100 kilometers) north of Manila at a cost of 2.3 billion dollars, the plant was hounded by controversy and has never produced power.

International inspectors who visited the plant shortly after Marcos was ousted by a "people power" revolt in 1986 declared it substandard and unsafe because it was built near a volcano and earthquake fault lines.

Aquino said on Monday he was not keen on rebuilding the plant, citing safety concerns and saying it would be costly to the cash-strapped government.

"I am really bothered. I have a lot of apprehensions with regards to the Bataan nuclear power plant," he said.

The Philippines relies mostly on geothermal and hydroelectric dams to produce its power, but a lack of investment in recent years has contributed to energy shortfalls for the fast-growing population of 92 million people.

Drought plus frequent breakdowns of facilities exacerbated the problems this year, leading to rotating blackouts in parts of Manila and deeper energy shortfalls in the less developed south of the country.
 

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World Agricultural Supply and Demand Estimates - July 2010
Pork production is forecast higher for 2010 based on increased slaughter and heavier dressed weights; mainly during the second quarter, according to the USDA World Agricultural Supply and Demand Estimates for July 2010.


Livestock, Poultry and Dairy
Total US meat production forecasts for 2010 and 2011 are adjusted slightly. Cow slaughter remains relatively high boosting beef production in 2010. Higher forecast mid-year cattle placements are also expected to boost steer and heifer slaughter later in the year and into early 2011. Pork production is forecast higher for 2010 based on increased slaughter and heavier dressed weights; mainly during the second quarter. The June 1 Quarterly Hogs and Pigs report indicated that producers intend to have fewer sows farrow in the second half of 2010. Although largely offset by gains in pigs per litter, year-over growth in sows farrowing in 2011 is slower than previously forecast, and the 2011 pork production forecast is reduced slightly. Broiler production is forecast higher for 2010 and 2011. Hatchery data point toward continued growth in bird numbers and weights have been moving up. Turkey and egg production forecasts are unchanged from last month.

A slight increase is made to beef exports for 2010. Broiler exports for 2010 and 2011 are raised due to stronger shipments to a number of small markets and a resumption in exports to Russia.

Cattle and hog price forecasts for 2010 are reduced from last month as demand remains relatively weak in the face of higher production. The 2010 broiler price is adjusted to reflect second quarter prices. Prices for 2011 are unchanged. The turkey price forecasts for 2010 and 2011 are raised from last month in the face of continued tight supplies. The egg price forecasts are lowered for 2010 and 2011.

Forecast milk production for 2010 and 2011 is raised slightly from last month. Milk cow numbers have remained higher than expected and milk per cow is expected to increase more rapidly than previously forecast. Exports for 2010 are raised reflecting strong sales of dairy products but fat-basis exports for 2011 are unchanged from last month as production of fat-based products by competing exporters is expected to increase in 2011. However, the forecast of skim basis exports is raised for 2011 as nonfat dry milk (NDM) exports will likely reflect improving economic conditions. Fat-basis imports for 2010 and 2011 are forecast lower reflecting tight world supplies and growing international demand.

The Class III price forecast for 2010 is reduced on a lower cheese price forecast, but the Class IV price forecast is raised as the price forecast for butter is raised, more than offsetting a reduction in the NDM price. The 2011 forecast for butter is raised slightly but forecasts for other products are unchanged. The Class III and Class IV price forecasts are raised. The all milk price is forecast to average $15.80 to $16.10 per cwt for 2010 and $15.90 to $16.90 per cwt for 2011.

Wheat
US wheat supplies for 2010/11 are raised this month on higher area, yields, and carry-in. Beginning stocks are raised 43 million bushels based on the June 1 stocks estimate. Total wheat production is forecast 149 million bushels higher with higher forecast area and a forecast record yield of 45.9 bushels per acre. Winter wheat production is up 23 million bushels as higher Hard Red Winter wheat yields more than offset lower yields for Soft Red Winter wheat. Durum and other spring wheat production are forecast higher as abundant moisture and lack of heat stress in the Northern Plains support above trend yields. Feed and residual use is projected 20 million bushels lower as higher prices limit the competitiveness of wheat in livestock and poultry rations. Exports are projected 100 million bushels higher with lower expected production in several major exporting countries and strong early season export sales. Despite increased foreign demand for US wheat, ending stocks for 2010/11 are projected 102 million bushels higher and remain at an expected 23-year high. The season-average farm price for all wheat is projected at $4.20 to $5.00 per bushel, up 20 cents on each end of the range as tighter world supplies and higher corn prices support wheat values.

This month's 2009/10 changes reflect the latest export and seed use data and reported June 1 stocks. Projected exports are lowered 20 million bushels and estimated seed use is lowered three million bushels. Based on these changes, June 1 stocks indicate feed and residual use 21 million bushels lower. The 2009/10 wheat farm price is estimated at $4.87 per bushel, up two cents from last month's projection.

Global wheat supplies for 2010/11 are reduced with world production projected 7.5 million tons lower as smaller crops in FSU-12, Canada, EU-27, India and Turkey more than offset higher production in the United States and China. Production for Canada is lowered four million tons as persistent June rains limited seeding in the Western Prairies. Production is lowered 4.5 million tons and 3.0 million tons, respectively, for Russia and Kazakhstan as continued drought and high temperatures reduce yield prospects for spring wheat. EU-27 production is lowered 1.1 million tons reflecting early indications of lower-than-expected yields in northern Europe. India production is lowered 1.0 million tons on indications that heat during late grain fill reduced yields. Production is lowered 0.5 million tons for Turkey as early harvest results indicate disease has reduced expected yields. Production is raised 2.5 million tons for China where favorable June weather boosted harvested area and yields.

World wheat imports and exports are nearly unchanged for 2010/11, but substantial shifts are projected among the major exporting countries. Exports are reduced for Canada, Russia, Kazakhstan, and Turkey with lower production. Exports are raised for the United States, Australia, EU-27 and Ukraine. Global wheat consumption declines slightly with lower expected feeding in Canada, EU-27, Ukraine, and the United States mostly offset by increases for Russia and China. Global ending stocks are projected 6.9 million tons lower.

Coarse Grains
Projected US feed grain supplies for 2010/11 are lowered with reduced carry-in and lower projected production. Beginning stocks for corn are projected 125 million bushels lower reflecting higher use in 2009/10. With forecast harvested area down, corn production is lowered 125 million bushels, leaving supplies down 250 million bushels and 60 million below the 2009/10 record. Exports for 2010/11 are projected 50 million bushels lower as tighter domestic supplies, strong demand from ethanol production, and rising prices reduce the export competitiveness of US corn. Ending stocks for 2010/11 are projected down 200 million bushels at 1,373 million, 105 million below the 2009/10 projection. The season-average farm price for corn is projected 15 cents higher on both ends of the range to $3.45 to $4.05 per bushel.

Other 2010/11 feed grains changes mostly reflect lower forecast area, which is partly offset by higher expected yields. Barley and oats yields, as reported in the July 9 Crop Production, are forecast above trend. Sorghum yields are raised to reflect adequate to abundant soil moisture in the southern and central Plains. Production, however, declines slightly for all three crops. Barley and oats imports are lowered with reduced supplies expected in Canada. Projected ending stocks are lowered for all three crops and farm prices are projected higher.

US corn use for 2009/10 is projected 125 million bushels higher as increased feed and residual use more than offsets a reduction for ethanol. Feed and residual use is projected 175 million bushels higher as June 1 stocks indicated higher-than-expected disappearance during the March-May quarter. Corn use for ethanol is lowered 50 million bushels reflecting the latest ethanol production data from the Energy Information Administration (EIA). Although daily ethanol disappearance set another record in April, daily production slipped below March's record pace. EIA's new weekly ethanol production data series (first reported for the week ending June 4) suggests June production, while up from April, will not reach the March pace.

Global coarse grain supplies for 2010/11 are projected 14.9 million tons lower with nearly half of the decline driven by reductions in carry-in and production in the United States. Global coarse grain production is lowered 10.8 million tons with barley, corn and oats production lowered 6.9 million tons, 3.4 million tons, and 0.9 million tons, respectively. Partly offsetting, is a 0.6-million-ton increase in EU-27 mixed grain production. Outside the United States, the biggest reductions are for Russia, Canada, EU-27 and Kazakhstan. Russia barley production is lowered 2.5 million tons as continued drought and high temperatures reduce yield prospects. Russia corn and rye production are lowered 0.5 million tons and 0.3 million tons, respectively. Canada barley and oats production are lowered 1.1 million tons and 0.9 million tons, respectively, as persistent June rainfall limited plantings. Barley production is lowered 2.4 million tons for EU-27 mostly reflecting lower reported area. Kazakhstan barley production is lowered 0.8 million tons as extended drought and high temperatures sharply reduce expected yields.

Global coarse grain imports and exports are nearly unchanged for 2010/11. Corn imports are lowered for Mexico with exports increased for Ukraine, partly offsetting the US export reduction. World barley imports and exports are raised slightly with shifts expected among exporting countries. Barley exports are reduced for Russia, Canada, and Kazakhstan, but raised for EU-27 and Australia. Global coarse grain consumption is lowered for 2010/11 mostly reflecting reduced barley and corn use in Russia and EU-27. Global coarse grain ending stocks for 2010/11 are projected sharply lower with world corn ending stocks down 6.2 million tons and barley ending stocks down 5.7 million tons. At the projected 180.2 million tons, coarse grain stocks would be the lowest since 2007/08.

Oilseeds
US oilseed production for 2010/11 is projected at 100.8 million tons, up 1.7 million tons from last month, with increased soybean production accounting for most of the change. Soybean production is projected at 3.345 billion bushels, up 35 million due to increased harvested area. Harvested area is estimated at a record 78 million acres in the June 30 Acreage report, 0.9 million above the June projection. The soybean yield is projected at 42.9 bushels per acre, unchanged from last month. Increased exports and crush offset increased supplies, leaving projected 2010/11 ending stocks at 360 million bushels, unchanged from last month. Higher soybean exports reflect increased import projections for China for 2010/11.

The US season-average soybean price for 2010/11 is projected at $8.10 to $9.60 per bushel, up 10 cents on both ends of the range. Soybean meal prices are projected at $240 to $280 per short ton, up 10 dollars on both ends. Soybean oil prices are projected at 34 to 38 cents per pound, unchanged from last month.

Global oilseed production for 2010/11 is increased 0.5 million tons to a record 440.7 million tons. Foreign oilseed production is projected down 1.2 million tons to 340 million mostly due to lower rapeseed production. Global soybean production is projected at a record 251.3 million tons, up 1.4 million due mostly to higher production in the United States. Soybean production is also raised for Canada based on higher planted area reported by Statistics Canada. Rapeseed production is sharply reduced for Canada due to lower harvested area. Despite a record planted area estimate reported by Statistics Canada based on producer surveys conducted in late May and early June, significant crop area in the provinces of Saskatchewan and Manitoba did not get planted due to excessive rainfall through late June. As a result, the Canada rapeseed crop is projected at 10.2 million tons, down 1.8 million from last month. Other changes include reduced rapeseed production for China and EU-27 and increased cottonseed production for the United States, Brazil and Uzbekistan.

US soybean exports for 2009/10 are projected at a record 1.46 billion bushels, up five million from last month in part reflecting additional sales to China. Crush is increased five million bushels to 1.745 billion due to stronger-than-expected domestic disappearance for soybean meal. Soybean ending stocks for 2009/10 are projected at 175 million bushels, down 10 million.

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Livestock Review: Viet Nam
VIET NAM - This weekly International Egg and Poultry Review report by the USDA's Agricultural Marketing Service (AMS), looks at international developments concerning the poultry industry. This week's report focuses on the Vietnamese poultry and livestock industries.

 

In Viet Nam, about 74 per cent of the population lives in rural areas and 65 per cent depend on agriculture for their livelihood. Small-scale household based production accounts for about 70 per cent of the total livestock production in Vietnam. Livestock plays an important role in generating rural income in Vietnam; an estimated 8.3 million households produce poultry and seven million households produce pigs. Increasing incomes have resulted in a higher demand for livestock products. The average annual meat consumption in Vietnam is about 40kg per capita and is projected to increase to 57kg per capita by 2020. Pork accounts for the majority of meat consumed (76 per cent) followed by poultry meat (13 per cent) and red meat (nine per cent).

According to the General Statistics Office of Vietnam, the husbandry survey results on 01/04/2010 noted that the country had 277.4 million fowls, up 8.1 per cent from the same period a year earlier, and 27.3 million pigs, up 3.1 per cent. The June 2010 report, Socio-economic statistics in the first half of 2010, stated that feeding products in six months increased considerably as epidemic diseases had been controlled in a timely manner; pork (live weight) gained 1.79 million tons, up 4.7 per cent; poultry meat (live weight) gained 330,700 tons, up 17 per cent; 3,278.8 million eggs, up 7.1 per cent.

In 2008, the Vietnamese government adopted a Development Strategy for the Livestock Industry in order to reorganise and industrialise livestock production and processing in Viet Nam. Under this Development Strategy, Viet Nam plans to increase livestock production from the current 30 per cent of total agricultural output to 38 per cent in 2015 and 42 per cent by 2020. The target for 2020 is production of 5.5 million tons of meat, 14 billion eggs and over one million tons of milk. At that time, the livestock population is expected to total 35 million pigs, 300 million chickens and 500,000 dairy cows.

Highly Pathogenic Avian Influenza (HPAI) was first reported in Vietnam in January 2004 and is currently considered endemic in the country. The World Animal Health Organization (OIE) reported five outbreaks that were still recorded as unresolved as of 29 April 2010.

(Source: UN Food and Agriculture Organization; General Statistics Office of Vietnam; World Bank; OIE; CIA World Factbook; FAPRI; news wires.)


*Jan-Apr
Source: Department Trade Statistics




Source: General Statistics Office of Vietnam

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Virginia Foods to expand operations
[16 July 2010] Virginia Foods Inc, a Cebu, Philippines based meat processor, plans to spend PHP 80 million (USD 1.73 million) this year to expand operations and improve product quality. Virginia Foods Vice-President Stanley Go said in a statement that his company is looking at further expanding its distribution network in the Visayas and Mindanao, where its different products have entered the market. Mr Go said the company “still foresee the need to extend our consumer base” in the region. The company manufactures the Virginia, El Rancho, Winner, Champion, and Australian brands of canned goods and frozen processed meat.

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Capture the genetic potential of today's modern poultry
[20 July 2010] The Poultry Feed Quality Conference has been designed to help Asian poultry nutritionists and feed mill managers learn how to buy the best corn & DDGS and use their milling capabilities to capture the genetic potential of today's modern poultry, says Program Director, Bob Swick. The conference is being held in Kuala Lumpur on August 2-3, 2010.

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San Miguel gets four bids for Pure Foods
[23 July 2010] San Miguel Corporation (SMC) received and is now studying four bids for its 49% stake in its subsidiary San Miguel Pure Foods Co Inc.  Although SMC President Ramon Ang did not name the bidders, he admitted that they included three local firms and one international investor. Earlier reports  said that they include Carlyle Group LLC and CVC Capital Partners, Universal Robina Corp, and Del Monte Pacific Ltd. Mr Ang also declined to reveal the value of the bids.

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Commission Authorises Six GM Maize Varieties
EU - The European Commission has authorised six genetically modified (GM) varieties of maize for food and feed uses.



The European Commission adopted today five Decisions authorising GM maize 1507×59122, 59122×1507×NK603, MON88017×MON810, MON89034×NK603 and Bt11×GA21 and one Decision renewing the authorisation of Bt11 maize.

These six decisions cover the authorisation for food and feed uses and import and processing but not for cultivation.

The six GM maize in question received (between February 2009 and September 2009) a positive safety assessment from the European Food Safety Authority (EFSA) and underwent the full authorisation procedure set out in the EU legislation.

As Member States did not succeed to return qualified majority decisions for or against these six authorisations/renewal in the Standing Committee on the Food Chain and Animal Health (SCoFCAH) of February 2010 and April 2010 and then in the Council meeting of 29 June 2010, the dossiers were sent back to the Commission for decision.

The authorisations are valid for 10 years, and any products produced from these GM maize will be subject to the EU's strict labelling and traceability rules.

The six adoptions of today are the result of a usual and standard procedure concerning the authorisation of GMOs to be used in food and feed and have no link with the recently adopted package on cultivation since they do not cover cultivation.

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Jollibee forms joint venture for commissary in China
[4 August 2010] Jollibee Foods Corp (JFC) has forged a joint venture with Singapore’s Hua Xia Harvest Holdings Pte Ltd to build its first commissary in China. The JV will set up Jollibee Foods Processing Pte Ltd, which will be 70% owned by JFC with the remainder held by Hua Xia. Both companies will invest USD 7.37 million for the new facility, which is expected to become operational within 2011. To be located in Shucheng County in Anhui Province it will initially supply Yonghe King stores in Beijing.

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Philippine feed production to drop 23%
[9 August 2010] Lack of demand from livestock, poultry and aqua producers will lead to a drop of about 23% in Philippine feed production, a local industry official said, adding that hog production has not picked up but declined as piglet production is also down. Earlier, industry stakeholders projected a 10% decline in production. If demand does not pick up, it is unlikely that local feedmillers will import more raw materials like feed wheat despite the expected drop in local corn production this year.

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Philippines lifts ban on MBM from Canada
[10 August 2010] The Philippine Department of Agriculture (DA) has lifted the ban on meat and bone meal (MBM) from Canada. In a memorandum, the agency said the World Organisation for Animal Health (OIE) has designated Canada as a Bovine Spongiform Encephalopathy (BSE or Mad Cow Disease) "controlled risk" area, which means the OIE deems the country’s mitigation measures sufficient to minimise the risk of transmission of the BSE agent. Canada can now export to the Philippines MBM and other processed animal protein. The Philippines banned the entry of MBM from Canada in May 2004, after a BSE-incident there that was verified and documented by the OIE.

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FAO forecasts void in lamb supply
[13 August 2010] The Food and Agricultural Organisation (FAO) has said that within five years there could be a 300,000-tonne void in lamb supply due to growth in demand of 1.6 million tonnes, mostly from China. Meat and Livestock Australia is looking to fill this gap, but Beef and Lamb NZ chairman Mike Petersen said demand was starting to slip as well in traditional lamb export markets such as Europe. He said two things were needed to capture younger consumers - hey had to be educated on the taste of lamb and how to cook it, and exporters had to supply the meat in consumer-ready packs. Sheep flocks around the world were shrinking, creating new opportunities and Mr Petersen said New Zealand should be able to capture some of that global demand by improving on farm productivity.

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Andok’s Manok approves new franchisees
[16 August 2010] Andok’s Litson Corp of the Philippines, which operates Andok’s Manok, one of the Philippines’ leading chicken rotisseries, is expanding further with the approval of seven new franchise deals. The new franchisees will add to 300 dine-in and take-out branches already operating all over the country. Andok’s Litson Corp’s President Leonardo Javier said that a new commissary is being planned to meet the requirements of the new franchisees. Currently the company has commissaries in Metro Manila and Iloilo province that can support only 100 franchised outlets.