China: Hunan’s rice sales plummet amid reports of cadmium-polluted crops

Hunan’s rice sales plummet amid reports of cadmium-polluted crops

Staff Reporter, 2013-04-09

Rice sales in parts of Hunan province in south-central China have plunged and local farmers are giving up planting following reports of rice being tainted by excessive levels of cadmium.

The amount of rice sold in parts of the province is said to have dropped by 60%, resulting in a decline in prices, after domestic media reported at the end of February that 10,000 tonnes of cadmium-tainted rice from Hunan was sold to Guangdong province.As part of the fall-out from the incident, workers were put on leave at some rice processing plants, according to Guangzhou’s Time Weekly.

At a plant owned by Sun Youliang in Lanxi township, employees were asked to work one day and given two days off, or even work one day and rest for three to four days afterwards.

Sales dropped from a monthly average of between 2,000 and 3,000 tonnes to less than 100 tonnes in March, according to Sun.

Sun’s company, which used to sell at least 15,000 tonnes of rice to Guangdong every year, has withdrawn entirely from the province, owing to reports of the food scare.

Sun, who earned more than 2 million yuan (US$322,000) in profits last year from his business, estimated that he would lose close to 6 million yuan (US$967,000) this year.

Farmers, on other hand, are either planting rice in smaller areas or giving up planting entirely.

Zeng Wenliang, who has been planting a 2,000-acre rice field that he has been renting since 1999 in parts of Hunan, said he was planning to plant on just half of the field this year.

Some farmers who have much smaller areas of land to work on are even mulling giving up planting altogether to stem their losses.

Sun Zhong, a member of the committee monitoring the agricultural produce market in Hunan, told Time Weekly that he was worried that reduced planting might spread, which could adversely impact food production in the province.

Sun said the Hunan government had launched measures to reduce the impact and was aiming for more than 30 million tonnes in crop output this year.

According to Time Weekly, the city of Zhuzhou in Hunan is severely polluted with cadmium, with over 160 square meters of land in the city containing levels of the heavy metal five times the permissible limit.

Possible causes of the pollution were associated with the setting up of trash dumps and sewage plants in rural areas, which reportedly discharged industrial waste water into the ground.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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