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Chinese food makers learn to swallow scrutiny, controls

September 24, 2007|Don Lee | Times Staff Writer

SHANGHAI — Chinese exports of foods including garlic, honey and fish fell sharply this summer as Beijing officials tightened health and safety regulations. That has meant increased revenue for some American growers whose products are now in greater demand -- but also higher prices for U.S. consumers.

Stepped-up enforcement by Chinese officials, who are trying to restore confidence in the Made in China label after a series of product-safety scares, has included aggressive inspection of certain food producers and new requirements in some cases, such as putting tracking stickers on every outbound box and increasing testing for a wider range of food- and soil-borne diseases.

In China's garlic capital in Shandong province, many of the larger exporters were forced to stop production during much of the summer while inspectors went through their plants and books. Some were ordered to install stainless-steel ceilings in factories and add new record-keeping systems. They said every container headed for the U.S. was being checked before loading, instead of 1 of every 15 or so, as before.

The result: Chinese garlic exports to the U.S. fell 39% in July from a year earlier -- a stark contrast to the 59% year-over-year increase in the first half of 2007, the latest Chinese customs data show. August figures weren't likely to be much different.

"It's a heavy burden for us, but we have no choice," said Yang Shenming, trade manager at Hongchang Fruits & Vegetable Products Co., which resumed shipping this month.

Yang, though, worries about the future. He said that before this summer he could fill an overseas order in seven days. Now it takes at least three weeks because of new inspections and lab tests. Among his added costs: dinner for government inspectors working late.

U.S. importers haven't reported quality problems with Chinese garlic. But Chinese officials aren't taking chances with some of their biggest food exports. China is the world's largest producer of garlic, supplying more than 80% of the crop imported into the U.S.

The influx of Chinese garlic in recent years has been a sensitive issue because it often sells for about half the price of U.S.-grown garlic. That's hurt farmers in Gilroy, Calif., the self-proclaimed U.S. garlic capital. But the latest slowdown in Chinese shipments has reduced supplies, pushing up demand -- and prices -- for California-grown garlic.

Effects from the slide in Chinese garlic exports have been a bit of a boon to Garlic Co. in Bakersfield, where co-owner Joe Lane said he had raised prices.

A year ago, the garlic supplier sold whole bulbs for 80 cents to $1 a pound, he said. Now, Lane is able to sell them for $1.20 to $1.50 a pound.

"We're pleased with the price but the sad thing is, we can't react quick enough to increase our supplies to really take advantage of the situation," he said, adding that it took a year to grow a crop of garlic.

China's government has said that 99% of the nation's food exports to the U.S. -- totaling about $3.8 billion in 2006 -- passed muster in each of the last three years. But after tainted pet food ingredients from China sickened and killed thousands of dogs and cats in the U.S. this year, scrutiny of Chinese-produced food has intensified.

U.S. regulators have restricted Chinese imports of shrimp, eel and catfish because they were found to have unacceptable amounts of antibiotics and other chemical residues. California importers have recalled ginger and fish from China, adding to the list of recalls of Chinese-made goods this year, including toothpaste, tires and toys.

Although some of the problems stemmed from design flaws and differing drug regulations, Chinese officials have acknowledged that their country needed to raise standards, modernize food production and strengthen inspection and supervision of exports.

China's chief inspector of exported food, Wang Daning, said this month that he was adding 300 workers at ports to his bureau's overall current staffing of about 7,000. He said he was trying to get many inspectors out of desk jobs and into the field, although he was rotating inspectors making plant visits to reduce corruption. Companies that don't measure up would be blacklisted.

But Wang and his crew face significant challenges, and nobody expects speedy improvements. Analysts say China's rapid economic growth has simply outstripped Beijing's capacity to regulate the food industry.

Wang said about 12,700 processors had export licenses. An undisclosed number are monitored very closely at their factories and loading docks. But China has about 450,000 food-processing companies, most with fewer than 10 employees. It's some of these small, unlicensed and unscrupulous manufacturers, such as the two blamed in the pet food scandal, that present the biggest problem for China's efforts to improve food safety.

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