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Chinese Pay Double for Organic Kale After Food Scandals

March 14, 2014

March 14 (Bloomberg) -- Shanghai housewife Yang Huaixin began buying organic food from farms on the outskirts of the metropolis not long after a relative had a brush with cancer.

"It’s an investment in one’s health," said Yang, 36, who uses organically farmed vegetables and meat in soups and steamed buns for her husband and 8-year-old son. "I can’t change my overall environment, but I can control what’s around me."

Demand for organic food is surging in China as food-safety scandals and rising nutritional awareness drive health-conscious consumers to search out safer options. Like their counterparts in the U.S. and Europe, Chinese increasingly are prepared to pay a premium for organic food. Looking to meet the demand, farmers are ditching pesticides, while markets and stores devoted to naturally raised food are opening in cities across the country. Wal-Mart Stores Inc. and other global grocers are selling more organic merchandise.

"This is the first market I’ve worked in where food safety is a more important consideration than price," Rob Chester, chief compliance officer at Wal-Mart in China, said in an interview.

Food and drug safety was voted as the third-biggest concern for ordinary Chinese this year, up from seventh place in 2013, according to an annual online poll of 3.26 million people by the state-run People’s Daily last month.

A series of scandals from melamine-laced baby formula and rat meat sold as mutton have stoked food-safety fears in China. Thousands of dead pigs found in a Shanghai river, the city’s water source, raised concerns about water contamination.

China’s State Council announced a plan last month to enhance food quality and prioritize development of organic and pollutant-free agriculture over the next six years.

Sales Jump

Though the definition for organic varies by country, it typically means foods produced with no pesticides or fertilizers, or with only natural ones such as manure instead of synthetic fertilizers. The number of certifications issued to organic products more than doubled in four years to the end of 2013, according to data from a government department.

Sales of those items reached 80 billion yuan ($13 billion) at the end of 2012, the most recent year for such figures. Sales of packaged organic foods such as honey and cereals jumped 46 percent in China last year to 5.94 billion yuan, after rising 40 percent in 2012, according to Euromonitor International.

The Beijing LohaoCity food chain, whose name stands for "lifestyle of health and organic," has 27 outlets in the city selling organic produce and boosted sales 40 percent last year to a record, said Nancy Song, a spokeswoman for the chain.

Xinjiang Red Dates

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