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Ketchup Companies Open Raw Materials Battle

May 28, 2018

"A piece of 120 acres of tomato field surrounded by a train to pull tomatoes, and the tomato picking machine waiting for the operation, the red picking machine is open from Xinjiang Tianye, the green is the COFCO Tunhe." According to Xinjiang The Metropolitan Consumer Morning News reported that Han Qixin, deputy general manager of COFCO Tun Ha tomato department, came to the site personally and brought an order contract signed with the farmers. He said that the seeds for the planting area were provided by COFCO Tunhe. Provide technical guidance and other supportive help, but can only watch the fruit stolen by competitors.


As for the reason, the report quoted Han Qixin as saying: "We have heard that the 143th has ordered that the tomato planted in the group can only be given to the Corps; we can't pull it out even if we pick it." At the same time, the COFCO Tunhe part of the 27th delegation of the Xinjiang Bingtuan 27th order contract tomatoes were also snatched by local companies.


It is reported that COFCO Tunhe signed an order contract of 2064 mu this year with the tomato cooperatives of the above-mentioned farmers, involving 22 growers. 60% of the raw tomatoes of COFCO Tunhe come from the order agriculture and 40% from the species. COFCO Tunhe insiders told the reporter of Daily Economic News that the dispute is still being handled. The COFCO Tunhe side requested that the contract be executed according to the order.


However, the staff of Xinjiang Tianye Board of Directors told the reporter of Daily Economic News that they were unaware of the competition for raw materials, and said that most of the companys raw materials were also acquired by the order model, and some farmers sent their own impossible No."


The origin of raw materials competition has come from the drastic decline in the production of tomato sauce and the dramatic increase in the price of tomato sauce.


According to public statistics, in 2012, China's tomato products companies generally adopted the strategy of limiting production and insuring prices, reducing the area of raw tomato cultivation, and reducing the output of raw materials. Among them, the output of tomato raw materials in Inner Mongolia fell by more than two-thirds and Xinjiang decreased by 1/2.


The sharp drop in raw material production triggered a rebound in ketchup prices. According to public figures, the price of tomato sauce on the international market has risen sharply this year, about 40% year-on-year, and the price of new sauce has been above US$1,000/ton.


The reporter learned that there are more than 110 tomato ketchup manufacturers in Xinjiang, and there are even eight tomato processing companies within 20 kilometers. The two are less than 500 meters apart. Qin Gang told the reporter of Daily Economic News that a large number of sauce factories faced raw material shortages and price increases and began vicious competition.