Melamanic China

Melamine is a nitrogen(66%) based toxic, which tends to cause reproductive damage, kidney or bladder stones leading to possible cancer in the long term.

The recent economic news has been the surge of Melamine in various dairy products across China and this has had a significant effect on business activities locally and globally. On a local level, Heinz has withdrawn 270 cases of baby food and declared thats its milk supply will be diverted to non-chinese sources. The global level has seen the European Commission test all dairy products with more than 15% milk powder. In addition, the commission has imposed a ban on all EU imports of chinese baby food. However, one must not forget the impact it has on human life with the death of four babies and over 53,000 ill.

The milk sector in China is worth over $20bn in less than 5 years and this figure illustrates the scope of China's strength but with the current commercial actions in China, this figure maybe rapidly declining.

Trust plays a major role in strengthening business ties with the West to entice investments in China but with recent events has that trust been lost. If one looks at the figures, it has rocked such relations with 12% of milk products in China containing melamine. In addition, the leading quality control in China has reported that of the 265 products tested in China 11.7% of them contain the chemical. Various sources give their figures but the highest being reported so far is 20%.

The source of the problem has been reported to be on the conditions of the market with many milk farmers being small firms unable to influence the market in terms of price and quality control. This has subsequently resulted in the middle men, who are the purchasers placing pressures on the farmers to produce more and more in order to cut down price and maximize profit. This has resulted in the farmers diluting the milk by 30% and becoming more vulnerable to contamination.