More Melamine

http://www.nytimes.com/2010/01/26/world/asia/26china.html

With the following, who would think NFDM price would fall in the CME today?

January 25, 2010
More Tainted Dairy Found in China
By MICHAEL WINESJ

BEIJING — Health officials in southern China have swept frozen confections and other dairy products from stores after discovering they contained melamine, the industrial compound at the center of a tainted-food scandal that rocked China’s dairy industry in 2008, news reports said Monday.

It was the third time in a month that Chinese authorities had announced problems related to melamine, suggesting that producers are still making and selling tainted food ingredients despite outrage over the 2008 scandal and what the government heralded as a crackdown.

The former head of the Guangdong Provincial Dairy Association, Wang Dingmian, confirmed the recalls in a telephone conversation. Mr. Wang, who has often taken on the role of spokesman for dairy companies in southern China, refused to provide further details.

The latest case took place in Guizhou, a province in the south of China’s interior. The provincial newspaper Guiyang Daily reported that food companies from Hebei, Liaoning and Shandong Provinces and the city of Shanghai had produced the tainted products in March and April 2009. The companies’ officials were reported to have said that the melamine was in milk powder they bought elsewhere to use as an ingredient.

The state-run newspaper China Daily reported Monday that the three companies were banned from selling products in Guizhou.

Melamine is commonly used in plastics and fertilizer, among other products. Its high nitrogen content can make foods appear to be protein-rich in standard nutrition tests. When eaten, however, the chemical can cause kidney stones and kidney failure, especially in infants and toddlers.

At least six children died and 300,000 were sickened in 2008 before investigators discovered that 22 major food companies were selling products laced with melamine to make them appear more nutritious. The revelation set off worldwide recalls of Chinese products, from dairy goods to dog food, and bankrupted China’s biggest dairy company, Sanlu. In November, China executed two people in connection with the scandal.

In interviews this month with Chinese news outlets involving an earlier recall, Mr. Wang was quoted as saying that officials had failed to monitor a large batch of melamine-tainted products left on the market after the 2008 scandal, and that the lapse had been kept quiet “to safeguard the good image of the dairy industry.”

Shanghai government officials said last month that they had closed one firm, Shanghai Panda Dairy Company, and arrested three of its executives after some batches of products made in 2008 were found to contain melamine. Journalists later reported that government officials had learned of the contamination in December 2008, but took no action.

Late last month, officials in Shaanxi Province arrested three dairy executives after discovering that 200 bags of their company’s milk powder were laced with melamine.