Rice Wholesaler Knew About Cadmium Contamination Since 2002; Hunan Rice Markets Collapse [View all]

[hatrack]

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The problem was apparently detected in 2002 by a major Guangdong wholesaler, Shenzhen Cereals Group (SZCG), according to Chen Jian, business manager of the Changsha Grain Depot run by China Grain Reserves Corp., also called Sinograin. He recently told the Nanfang Daily newspaper that SZCG officials' knowledge of Hunan's cadmium problem dated to their 2002 cooperation agreement with his company.

For business reasons, Chen said, SZCG chose to ignore the problem for seven years through a stable period for rice prices. But in August 2009, and shortly after newly harvested crops of Hunan rice had filled SZCG warehouses, the market caught wind of the contamination issue, pushing rice prices down sharply. SZCG had purchased batches of seven varieties of Hunan-grown rice, altogether 15,415 tons, in 2009. While the grain was being shipped from Sinograin's Hunan facilities to Shenzhen, state media reported that cadmium poisoning had sickened hundreds of people and killed two in villages near the Hunan city of Liuyang.

Less dramatic but equally serious that year were results from a Nanjing Agricultural University study that found about 10 percent of all rice grown and sold in China had failed to meet government standards for cadmium. Shaken by the Liuyang report and fearing a market backlash, SZCG sent samples of its recently delivered Hunan rice to the Shenzhen Municipal Quality Inspection Research Institute. Tests found excessive levels cadmium.

Company officials scrambled to salvage their investment. Indeed, Chen said if not for a contract adjustment with Sinograin, SZCG would have lost more than 10 million yuan on some 100,000 tons of Hunan rice in its stocks.

EDIT

http://english.caixin.com/2013-06-05/100537850.html