On May 6, 2009, COFCO launched a ceremony for signing order contracts for growing Fortune rice, which indicated that COFCO completely adopted the growing order contract model for its Fortune rice business.
COFCO expanded its rice business from merely foreign trade to the whole chain which meant that growing, storage, processing, trade, brand and distribution were integrated by COFCO so that it would control every link to guarantee quality, from farmland to dining tables.
Ms. Yang Hong, General Manager of COFCO’s rice business, signed the order contracts for the year 2009 with major rice farmers from Northeast China and Jiangxi Province which are with natural advantages in growing rice. The order contract specifies requirements for the category, quantity, quality, pesticide residual and purchase price. This practice is adopted originally to meet needs of Japan, Korea and other high end rice importers. Now it is also adopted to meet the domestic market, indicating that COFCO started the whole chain quality control from growing, the very beginning.
According to relevant sources, this was the first step taken by COFCO to guarantee stable supply and quality. COFCO would take similar steps for the other links including processing, logistics and marketing.