Tainted baby milk, rat meat and gutter oil bring challenges and opportunities for China’s agricultural producers
Food scandals have brought winners and losers for the sector
Too many recent food scandals have brought huge distrust among Chinese consumers over local food production. That has brought opportunities and challenges for the country’s agricultural sector.
From baby milk powder tainted with melamine and rat meat passed off as lamb to gutter oil recycled from sewers and used for cooking oil, Chinese consumers have many reasons to worry about the quality of the food on their table.
In 2013, the Ministry of Public Security said the police had arrested more than 60 people who had sold rat and fox meat as mutton. In 2011, the Chinese dozens of people were taken into custody, suspected of collecting oil from restaurant gutters and selling it as cooking oil again. In 2008, the country reported hundreds of thousands of victims of tainted baby milk powder. Six babies died from kidney stones.
The growing concerns over food safety have changed people’s consumption patterns, as they turn to higher-quality imported food they consider a safer option. And this has led to surge in imports of agricultural products in recent years.
In light of the huge increase in trade, winners are downstream importers, retailers, and further upstream input companies, Natixis analysts Iris Pang and Gary Ng said in a recent research note.
“Importers and retailers enjoy the ride of surging demand for higher quality food, while input companies have increased sales as government policies focus on increasing production volumes,” they said.