Merger to create grain trading force

Combining the SOEs forms a bigger rival to compete with ABCD companies

The State-owned Assets Supervision and Administration Commission on Friday announced the merger of China National Cereals, Oils and Foodstuffs Corp with Chinatex Corp, in the process creating a bigger rival to compete with the so-called ABCD companies.

The term ABCD refers to the companies that dominate global grain trading, serving as middlemen between farmers and buyers. The groups are ADM Co, Bunge Ltd and Cargill Inc from the United States, and the Netherlands-based Louis Dreyfus SAS. Chinatex, one of the nation's main textile and grains trading groups, will become a subsidiary of COFCO, the country's biggest food trader after the merger, the SASAC said on its website, indicating that the central government would push further ahead with its efforts to restructure State-owned enterprises this year.