AgriChina Investor 1205

• Publication date: May 2012
• Report size: 14 pages

Internet shopping develops rapidly in China. Chinese consumers spent USD125 billion (RMB785 billion) online in 2011, up 66% year on year, according to a study by China's largest e-commerce company Alibaba. Internet shopping transaction value in China will exceed USD159 billion (RMB1 trillion) in 2012, according to China's Xinhua News Agency. It is estimated that China will be the largest internet shopping market in the world in the near future. ...

Internet shopping develops rapidly in China. Chinese consumers spent USD125 billion (RMB785 billion) online in 2011, up 66% year on year, according to a study by China's largest e-commerce company Alibaba. Internet shopping transaction value in China will exceed USD159 billion (RMB1 trillion) in 2012, according to China's Xinhua News Agency. It is estimated that China will be the largest internet shopping market in the world in the near future.

Many experts said that China has entered the internet era. What changes will this bring to the sale of agricultural produces?

In recent years, many companies and individuals have tried to sell agricultural produces online. However, the e-commerce of agricultural produces faces some challenges. Domestic consumers usually buy clothing, shoes and books online for lower price and convenience. However, the agricultural produces sold online don't have price advantage. Most of the agricultural produces are really heavy and hard to keep fresh, so the cost in delivery and storage of these products is even higher than that in traditional sales channel.

However, some high-end agricultural produces such as organic products sell well online. Consumers of these products are less sensitive to price. With the increasing demand for high-end agricultural produces after a series of food scandals, some companies have set their feet into this market.

ChemChina, a leading agrochemical player in China, has finally released the plan to integrate its pesticide asset.

On May 7, 2012, China Securities Regulatory Commission (CSRC) announced that the IPO application from Jiangxi Huangshanghuang Group Food Co., Ltd. (Huangshanghuang Food) has been passed after review.

Mengniu Dairy plans to set up a dairy processing base and a cow plant in Leiyang, Hunan to enter the dairy industry of this province.

Besides investors, Tony's Farm, the organic agriculture leader in China, is also very attractive to many local governments.

China plans to develop urban modern agriculture to enhance food security.

China is developing woody oil plants to reduce the dependence on imported soybean for edible oil.

Prices of fertilizers, seeds, pesticides, etc. in China have all witnessed increase in 2012, which may impact farmers' enthusiasm for planting.

China's sugar industry has expanded rapidly in the past years, but the raw material supply for sugar falls short of its demand.

The Ministry of Finance and the State Administration of Taxation issued the Circular on Measures for the Pilot Project of Deduction of Input VAT on Processed Agricultural Products in Certain Industries in May 2012.

Fujian provincial government launched a document Eight Measures from Financial Sector to Support Development of Facility Agriculture on May 4, 2012, in order to support its facility agriculture.

China has issued the Draft Proposal on Agricultural Insurance Regulations to solicit public opinions on the measures designed to promote agricultural development.

Forestry property right becomes a new investment field in China.

E-commerce Industry in China

ChemChina to integrate its pesticide asset
Huangshanghuang Food to land on Shenzhen SME Board
Mengniu Dairy to enter Hunan's dairy industry
Tony's Farm: attractive to local governments
China enhances food security by urban modern agriculture
China developing woody oil plants to reduce soybean import
Planting cost increases sharply in 2012
Raw material supply for sugar falls short of its demand
Pilot project of input VAT deduction on processed agricultural products to be launched
Fujian provincial government to support facility agriculture
Draft Proposal on Agricultural Insurance Regulations launched
Promising forestry property right investment in China
China's summer grain output may increase by 2%-3%
Planting period of domestic early rice be over
Import cotton hindering the development of homegrown cotton in Shandong
Father of Hybrid Rice cooperates with machinery company
China continues to promote formula fertilization by soil testing
China to import pork from UK
MOA to promote primary processing projects in agricultural producing areas
China's top philanthropist enters agriculture business

Companies Mentioned
ChemChina, Jiangxi Huangshanghuang Group Food Co., Ltd., Mengniu Dairy, Tony's Farm