Dairy giant Fonterra said on Thursday [15 December 2016] that it had established a 1.5 billion yuan ($216.36 million) multi-currency facility with Bank of China. Fonterra, the world’s largest dairy exporter, said the facility will provide diversity in its yuan funding sources for its operations in China, its largest market…Full Article: The Global Times Dec 2016

Key Point

  • In November 2014, Bank of China established operations in New Zealand (Auckland).

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  • On 21 September 2016 (the day before China’s US beef ban was lifted), for the first time ever China’s central bank permitted a US-based bank to clear Chinese CNY (yuan) transactions. The New York branch of the Bank of China was given permission to begin yuan clearing services. During the same month, Fonterra opened a new dairy hub in Shanxi Province According to New Zealand’s Food Minister, Fonterra’s dairy hub in Shuozhou, Shanxi Province will have 30,000 cows, of which 16,000 will be dairy cows.
  • In July 2016, Fonterra’s Chinese business partner, Hangzhou’s Beingmate, announced profit losses relating to the April 2016 milk powder scandal. Beingmate had projected a NZ$21 million profit, but revised this figure to a NZ$44.5 million to NZ$48 million loss in the wake of a counterfeit infant formula scandal.
  • On 11 August 2015, in order to kick-start its economy, the People’s Bank of China (PBC) devalued the yuan (CNY) by approximately -1.86%. The devaluation continued on for two more days, dropping a total of nearly -4.6% (USD/CNY) by the end of August 13th.
  • In April and June 2014, China cut its reserve requirement ratio (RRR) for banks that lend to agricultural enterprises by 2% and 0.5%, respectively.
  • In August 2014, Fonterra announced plans to purchase a 20% stake (US$467 million) in Beingmate (based in Hangzhou, Zhejiang Province). Beingmate in return would hold a 51% stake in Fonterra’s Gippslands milk powder factory in Victoria, Australia (near Melbourne).
  • In March 2014, China’s central bank announced the establishment of a credit system for serving small and micro-sized companies and farming households. The system, which will aid farmers to receive small loans, was to be piloted in 31 cities and 32 counties, including Gaoling County, Shaanxi Province.
  • In February 2014, China’s central bank, the People’s Bank of China (PBC) announced they will institute customized financial services in order to modernize farming practices. For example, farmers who cultivate fruit or other crops will long growth cycles will be eligible to receive loans that have a maturity length of up to 10 years.
  • In September 2013, Fonterra announced a 3,000 cow (dairy) farm in Ying County, Shanxi Province, would be completed by mid-2014. It was to be the second such dairy hub after Fonterra’s hub in neighboring Hebei Province.

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