On 2 June, 2015, the disclosure of investor
information of COFCO Limited (COFCO) reveals that the gross profit margin of
COFCO's grain, oil and sugar businesses is further decreasing. In 2012, 2013,
2014 and Jan.-March 2015, COFCO's gross profit margin from its main business
segments, grain, oil, sugar and other agricultural produces concerning the
trade, processing and related businesses was 6.96%, 6.56%, 3.89% and 3.11%
respectively. The falling gross profit margin leads to serious loss of the
company. For this, COFCO explained that since 2009, China continuously
increases the purchase price of grain, in order to stabilize the production and
enhance farmers' initiative in planting. This has increased the operating costs
of the company. In addition, for maintaining the people's livelihood, the
government also controls the sale price of finished grain products. Therefore,
China's grain industry is greatly affected by the national administrative
interference. Also, in 2014, the cost price of China's sugar industry was lower
than the market price, resulting in over USD1.63 billion (RMB10 billion) loss
in the whole industry. COFCO also suffered.
COFCO, established in 1952, is China's
largest grain and oil import & export company and food manufacturer. Its
businesses involve corn deep-processing, grain & oil trading and sugar. In
recent years, COFCO's grain, oil and sugar businesses have suffered from loss,
so the company hopes to improve its market competitiveness and profit level by
the listing of its assets of grain, oil and sugar, which draws wide attention
from media.
About CCM:
CCM is the leading market intelligence
provider for China’s agriculture, chemicals, food & ingredients and life
science markets. Founded in 2001, CCM offers a range of data and content
solutions, from price and trade data to industry newsletters and customized
market research reports. Our clients include Monsanto, DuPont, Shell, Bayer,
and Syngenta. CCM is a brand of Kcomber Inc.
For more information about CCM, please
visit www.cnchemicals.com or get in
touch with us directly by emailing econtact@cnchemicals.com or calling +86-20-37616606.