Foreign investment purchase grain at high prices in China, domestic food processing industry facing difficulties
Posted on Oct-03-2010· by china investor
Large foreign capital poured into the food business of China, to snatch the market through price competition, not only made the survival of domestic grain enterprises facing difficulties, but food processing industry are also in difficulties, a number of private small and medium food enterprises less competitive and only face the closure or a merger. At present, more than 2000 rice processing enterprises will close down or discontinued. Once this intense competition continues, the small processing enterprises are clearly difficult to maintain, and foreign institutions will likely eventually get more market share.
Foreign institutions to enter food processing industry of China, not only impacted the food processing industry, in the main producing areas of wheat and rice, and grain accumulated acquisition of food enterprises decreased significently compared with that last year, reducing rate reached 40%. the reason for the acquisition amount of rice reducing this year, in addition to farmers see rising food prices, be reluctant to sell grain, the large amount of acquisitions of foreign enterprises is also an important reason. Since foreign processing enterprises have relatively strong financial forces, more competitive than domestic private and state-owned processing enterprises, if this trend continue, then no doubt will influence China’s food security in a certain extent.
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