ChemChina's Acquisition of Syngenta

choi

Geoff Colvin, China's $43 Billion Bid for Food Security; ChemChina's acquisition of ag-tech giant Syngenta is part of a broader strategy that could change food supplies and costs worldwide. Fortune, May 1, 2017.
http://fortune.com/2017/04/21/ch ... a-acquisition-deal/

Quote:

"The worst famine in human history occurred in China from 1959 to 1961. An estimated 34 million people starved to death.  * * * Hundreds of millions of Chinese people today, including most of China's top leaders [?], survived that famine.  The legacy of that searing experience * * * [is] a major factor behind China’s biggest-ever foreign corporate acquisition: ChemChina's planned takeover, for $43 billion in cash, of Syngenta

"China today maintains massive stockpiles of corn, rice, and wheat—the world's largest reserves, the government claims, though it doesn't release figures. * * * The US, which produces so much food that it's the world's top food exporter, holds no government stockpiles at all. Consultants believe China keeps reserves equaling a huge 45% to 60% of annual consumption, just in case. * * * For the first time [though], the country overall is decently fed.

"Their [Chinese people's] protein of choice is pork; they consume half of all the world's pork * * * Feeding people meat requires three to four times as much grain in the form of livestock feed as does feeding people grain directly.

"The government would love to produce all the food it needs within its borders, but it's acknowledging that it can't [and hopes to import the balance].

"China's poor crop yields must be increased * * * So far China has raised yields mainly by using commodity agricultural chemicals and fertilizers—far too many of them. They've polluted the soil and water even worse than industrial activity. The most effective way to raise yields now is to use genetically modified seeds. * * * 123 Nobel Prize winners have signed a letter endorsing the safety of GMO foods.

"China's lack of domestically developed GMO seeds, though the country actually spent years in the 1990s trying to develop them.  Since then the government has banned virtually all GMO seeds in China because of public fear.

"ChemChina's own presence [without Syngenta] in global agriculture is wide but paper-thin; it mostly sells low-profit commodity agrochemicals.

"the country's [China's] food imports have increased sharply since 2008. Yet global prices haven't spiked. On the contrary, they've declined [this report does not explain why]. If the Syngenta deal raises yields in China and maybe elsewhere too, it will ease upward pricing pressure globally.

"After thousands of years, China has likely suffered its last famine. How well it can meet its next challenge, feeding its people a rich-country diet, is a big question the Syngenta deal addresses but doesn't answer ['doesn't answer' means 'answer somewhat': my guess].

Note: searing (adj): "marked by extreme intensity, harshness, or emotional power  <searing pain>"
https://www.merriam-webster.com/dictionary/searing