COFCO hun­gry to beef up its pres­ence in global food trade

China Daily (Hong Kong) - - BUSINESS - By ZHONG NAN and REN XIAOJIN zhong­nan@chi­nadaily.com.cn

China Na­tional Ce­re­als, Oils and Food­stuffs Corp, the coun­try’s big­gest food trader by rev­enue, will ac­cel­er­ate its pace of build­ing ware­houses and lo­gis­tics fa­cil­i­ties in the world’s ma­jor grain-pro­duc­ing re­gions this year, said a se­nior ex­ec­u­tive on Wed­nes­day.

The State-owned group plans to build new ware­houses and pro­cess­ing fa­cil­i­ties in coun­tries in­clud­ing Myan­mar, Kaza­khstan, Ukraine and In­done­sia to en­hance its abil­ity to ac­quire global food re­sources.

COFCO has al­ready pur­chased and built ports, lo­gis­tics com­pa­nies and store­houses in the world’s main grain-pro­duc­ing ar­eas such as Australia, South Amer­ica and the Black Sea re­gion.

Wan Zao­tian, COFCO’s vi­cepres­i­dent, said China has be­come the world’s largest mar­ket for food trade. Sup­ported by the Belt and Road Ini­tia­tive, food trade be­tween China and its part­ners is ex­pected to grow rapidly. It is crit­i­cal for the group to build ef­fi­cient global sup­ply and lo­gis­tics net­works.

“The food in­dus­try has gained a grow­ing in­flu­ence in the coun­try’s econ­omy in the past six years. It plays an im­por­tant role in boost­ing do­mes­tic con­sump­tion and ac­cel­er­at­ing sup­ply-side struc­tural re­form,” said Wan.

COFCO’s rev­enue amounted to 216.12 bil­lion yuan ($32 bil­lion) in the first half of 2017, up 7 per­cent year-on-year. Its net profit in the same pe­riod also reached 5.51 bil­lion yuan, surg­ing 112 per­cent from the same pe­riod a year ear­lier.

“Coun­tries and re­gions in­volved in the Belt and Road Ini­tia­tive and China are strongly com­ple­men­tary in agri­cul­ture,” said Ding Lixin, a re­searcher at the Chi­nese Academy of Agri­cul­tural Sci­ences in Bei­jing,

All of the com­pa­nies that dom­i­nate global grain trad­ing — ADM Co, Bunge Ltd and Cargill Inc from the United States, and Nether­lands-based Louis Drey­fus SAS — serve as in­ter­me­di­aries be­tween farm­ers and buy­ers. They are pro­fi­cient in oper­at­ing bulk ship ser­vices or even own a fleet to con­trol the whole in­dus­trial chain

In this re­gard, COFCO has signed a long-term co­op­er­a­tive agree­ment with China COSCO Ship­ping Corp Ltd to safe­guard its grain ship­ping op­er­a­tions world­wide.

COFCO be­gan to im­port beef from the United States at the end of last month and has so far pur­chased 2,200 met­ric tons from Kaza­khstan through a freight train ser­vice launched in March.

The food in­dus­try has gained a grow­ing in­flu­ence in the coun­try’s econ­omy in the past six years.” Wan Zao­tian, vice-pres­i­dent of COFCO

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