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Meat consumption set to grow in China

Meat consumption in China, the highest in the world, will continue to grow even as the economy slows, sustaining demand for feeds made from corn and soybeans, according to Cargill Inc, the biggest US agricultural company.

"We are looking at a mega-trend of increasing consumption of meat, milk, eggs," said Christopher Langholz, president of Cargill Animal Protein China.

Rising incomes in China have increased demand for meat, including pork, making the nation the largest buyer of soybeans, which are crushed to feed pigs and chicken. Soybean and corn surged to record prices in Chicago last month as the worst US drought in half a century cut supplies.

"China has been very transparent in soybeans, so the market can respond," Langholz said. The transparency allows exporters to increase their ability to produce, reducing price volatility over time, he said.

Soybean meal hits record as US drought cuts crop

Soybean-meal futures in China advanced to a record on concern that the worst US drought in 56 years may cut oilseed supplies available to the biggest importer. Soybeans in Dalian, Liaoning province, climbed to the highest level since 2008.

Meal for January delivery rose as much as 3 percent to 4,361 yuan ($687) a metric ton on the Dalian Commodity Exchange, the highest price for a most-active contract since trading began in July 2000. The contract ended at 4,341 yuan a ton.

"The US drought and a reduction in global crops are the backdrop," Shi Yan, an analyst at Xinhu Futures Co, wrote in an e-mailed report. "As global prices jump, domestic prices for spot and futures markets have to follow."

Chalco gives up effort to buy SouthGobi

Aluminum Corp of China Ltd, the nation's largest producer of the metal, said it dropped its C$925 million ($938 million) bid for coal producer SouthGobi Resources Ltd as it's unlikely to win regulatory approval.

"The proposed transaction has minimal prospect of obtaining the necessary regulatory approvals within an acceptable time frame," Vancouver-based Turquoise Hill Resources Ltd, SouthGobi's largest shareholder, said on Monday in a statement. "As a result, Turquoise Hill and Chalco have agreed to terminate the lockup agreement, including Chalco's obligation to make a proportional offer."

Chalco's plans to acquire a stake in SouthGobi have been hindered by the Mongolian government, which passed a law in May restricting foreign State-owned companies from controlling key assets. The Chinese company was due to make a takeover bid by Tuesday after it agreed with Turquoise Hill to extend the deadline for a second time.

Government starts business credibility initiative

A total of 16 governmental authorities jointly on Monday jointly launched a month-long initiative to promote a business culture of honesty, a move to establish a level playing field as well as a favorable atmosphere for domestic consumption.

Domestic exporters with credibility will spend less time in customs clearance under the reformed clearance system, while risky exporters will face strict supervision, according to Chen Jianxin, deputy head of the anti-smuggling bureau of the General Administration of Customs.

Businesses in catering services will receive differentiated supervision based on their service quality, while the country's first group of food safety demonstration counties will be selected this year, according to Chen Xu, deputy head of the food safety supervision department of the State Food and Drug Administration.

Chengdu Motor Show now bigger and better

The Chengdu Motor Show is taking place through Sept 9 in the capital city of Sichuan province. The largest auto show in western China, it has attracted 420 auto dealers - both domestic and foreign - and is expected to have 600,000 visitors.

Participation in this year's event is the strongest in the show's history.

Low-sulfur marine fuel in the pipeline

China Marine Bunker (PetroChina) Co, the country's largest supplier of ship fuel, is to expand its provision of low-sulfur bunker to Yangshan port near Shanghai to satisfy increased demand, according to a company official.

China Marine Bunker may start selling bunker with 1 percent sulfur content at Yangshan next week, said the official, adding the company had just imported 8,000 metric tons of fuel oil from Singapore.

Demand for low-sulfur marine fuel in Asia is rising as air pollution standards are tightened for vessels traveling to North America.

Ships sailing in US and Canadian waters are required to use bunker with a maximum sulfur content of 1 percent starting this month under rules set by the North American Emission Control Area. Vessels outside the controlled areas typically use a maximum sulfur content of 3.5 percent.

The country's only low-sulfur bunker provider started offering the fuel at Tianjin port in July after it bought 8,000 tons from Russia.

PICC float could be delayed in favor of $3b HK IPO

People's Insurance Company (Group) of China may seek as much as $3 billion in an initial public offering in Hong Kong in October or November while postponing a Shanghai listing, according to two well-placed industry sources.

The State-owned insurer, which initially planned a dual listing in the two cities, may put the Shanghai portion of the sale on hold as mainland regulators have yet to approve the deal, according to the sources, who asked not to be identified.

According to industry estimates, PICC had aimed to raise as much as $5 billion through the IPO in Hong Kong and Shanghai.

The figure would have made it this year's third-biggest stock market debut after Facebook Inc and Japan Airlines Co, and the largest in Hong Kong since October 2010, show data compiled by Bloomberg. The company, based in Beijing, is believed to have received approval from Hong Kong Stock Exchange in June to sell shares in the city.

Pilot projects for mobile payments launched

The People's Bank of China said it would launch pilot projects for mobile payment services in China's rural areas, according to a report in the China Securities Journal.

In order to use the services, rural residents have to apply for a credit card, along with a SIM card that will be linked to the account. The mobile services will be able to process taxes, remittances and withdrawing small amounts of cash.

Agricultural Bank of China, Postal Savings Bank of China, China UnionPay and three Chinese telecom operators are among the first batch of companies participating in the pilot projects, the paper added.

China UnionPay is conducting training programs for some agricultural product dealers, to promote mobile payment services in rural areas, sources told the paper.

The authorities are likely to establish an upper limit for the transactions, the sources said. For example, the amount for a single cash transfer will have to be less than 1,000 yuan, and each personal account will not be able to transfer more than 10,000 yuan in total within a year.

China Daily - Agencies

(China Daily 09/04/2012 page14)