People's Food quashes rumours

- Last updated on GMT

Related tags: International trade, Milk

The managers of Singapore-listed People's Food have moved to quash
speculation over a profit warning, following rumours that the
company was about to be downgraded by analysts.

Shares sank to a four-month low following the rumours, but a People's Food spokeman in Hong Kong said trading was 'fine' and that there was no cause for any worries, emphasising that the second quarter does not even end until the end of June.

Singapore-based investment group, G K Goh, noted rumours that research houses CLSA and Deutsche (Bank) had downgraded their forecasts significantly. G K Goh also reported that CLSA was expected to cut its earnings forecast 15 per cent.

People's Food is currently one of the largest meat processors in China. Last year's turnover fell 3 per cent to RMB4.9 billion (€487m), after being impacted by SARS.Thai government proposes milk powder plants

Thailand's Agriculture Minister, Somsak Thepsuthin, says the government is planning to invest in two powdered milk plants to dependency on imports and match rising demand.

According to a report from Krungthep Turakij, with the Thai government about to sign a free trade agreement with Australia this July, concerns are rising over the negative effect this will have on Thailand's meat, milk, and fruit producers. By the end of 2004 tariffs on all these imports will be reduced to zero.

In an effort to try and boost the domestic dairy industry, Thailand is proposing to increase the tax on imports of powdered milk imports exceeding 22,000 tonnes a year and then use the revenue from this to build two major production facilities. Each is estimated to cost THB800 million and will have a production capacity of 500 tons of milk powder a day.Minister Thepsuthin has proposed increasing the tax on imports of powdered milk that exceed the quota of 22,000 tonnes a year and using the revenue to build two powdered milk plants. Each plant would cost about THB800 million (€16.1m) to build and would produce 500 tonnes of powdered milk a day.

China makes peace with Brazil over soy

China has said that it has reached an 'understanding' with Brazil over the lucrative trade of soybean with Brazil. Brazilian exports of soybean to China have been banned since fungicide was detected in a shipment.

According to an AFP report Brazil said that the ban had been lifted, although no specific date had been given as to when shipments would resume.

"The Chinese and Brazilian government have reached an understanding,"​ an official at the State Administration of Quality Supervision and Quarantine (SAQSQ) told AFP.

Soy is currently Brazil's third-largest export to China, and was valued at $1.6 billion dollars in 2003. As the commodity is currently one of the country's biggest exports it is understandable that the Brazilian government has been keen to resume trade. However many industry observers believe that the move has been made out of necessity as China's agricultural sector is not expected to be able to meet current levels of demands without relying substantially on imports.

Related topics: Business, South East Asia, Dairy

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