Mengniu jumps after testing clears milk

CHINA Mengniu Dairy Co, the country's largest producer of liquid milk, rose the most in four months in Hong Kong trading yesterday after some of its products were cleared of melamine contamination in government tests.

Mengniu climbed 5 percent, the most since June, to HK$9.09 (US$1.16). Hong Kong's benchmark Hang Seng Index fell 5 percent, Bloomberg News reported.

Competitor Inner Mongolia Yili Industrial Group Co climbed 5.7 percent to 9.81 yuan in Shanghai trading.

Dairy products tainted with the chemical melamine killed four babies and sickened more than 54,000 others in China.

The Chinese food safety watchdog cleared some products of Mengniu, Yili and Bright Dairy & Food Co made after September 14. No melamine was found in 2,093 samples of liquid milk taken from more than 20 cities including Shanghai, Beijing and Tianjin, the General Administration of Quality Supervision, Inspection and Quarantine said on Sunday.

Mengniu, Yili and Bright Dairy, which make up 70 percent of China's liquid milk market, were found to have sold contaminated products.

Melamine, a chemical used in lamination and plastics, was added to diluted milk to increase protein readings, the government said.

Drastic decline

Mengniu had plummeted 60 percent on September 23, the first trading day after the government said Mengniu had produced melamine-tainted milk. The food-safety regulator also said in a separate statement that some baby milk powder and other powder products produced after September 14 by companies including Mengniu and Yili were cleared of melamine contamination. The regulator had tested 340 samples from more than 10 cities, according to the statement.

Police detained six people in Hohhot, capital of the northern Inner Mongolia Autonomous Region, for involvement in the production of tainted milk, Xinhua news agency reported on Sunday.

The detentions were part of an investigation of tainted milk sold by Yili and Mengniu, both based in the autonomous region, according to the report.

South Korea has completed testing 94 percent of 428 products picked for melamine inspection, the nation's food watchdog said yesterday.

The agency found melamine in 10 products, all of which had been recalled and destroyed.

Singapore's Agri-Food and Veterinary Authority said it would prosecute two retail outlets of a minimart chain for allegedly selling milk products from China.