China Organic Agriculture Completes Acquisition of Dalian Huiming Industry Ltd.

All-Cash Acquisition of Major Agricultural Trading Company Expected to Enhance CNOA's Newly Expanded Business Model

SOURCE: China Organic Agriculture, Inc.

Last update: 8:51 a.m. EDT Oct. 31, 2008

LOS ANGELES & LIAONING, China, Oct 31, 2008 (BUSINESS WIRE) -- China Organic Agriculture, Inc. , a diversified food products company capitalizing on China's consumer revolution, today announced that it has completed the previously announced acquisition of Dalian Huiming Industry, Ltd. ("Dalian Huiming").

China Organic acquired 60% of Dalian Huiming for $10.6 million in an all cash transaction dated October 31, 2008. The transaction was completed within the timeframe set forth by the company's new Chief Executive Officer, Jinsong Li, and will be reflected in China Organic's fourth quarter financial results.

"The completion of this acquisition marks an important milestone in the history of China Organic Agriculture," said Mr. Li. "We're now able to focus on the successful integration of Dalian Huiming into CNOA's operations, allowing us to expand distribution channels and diversify our product offerings."

Dalian Huiming is a major agricultural trading company with broad distribution and product lines that will substantially expand China Organic's revenue-building opportunities. Dalian Huiming focuses on soybeans, corn, and cereal crops, which are all major agricultural products in China's northeast. Sales to consumers are made in regions including the provinces of Liaoning, Jilin, Heilongjiang, Sichuan, Fujian, and the cities of Beijing and Shanghai.

Based on net earnings, Dalian Huiming is one of the top-tier agricultural trading companies in the Northeast provinces of China. For fiscal year 2007, revenue was $40.2 million and net income was $2.7 million, a fourfold increase from the comparable period in 2006. China Organic expects to gain operating efficiencies through the acquisition, while also expanding the diversity of the products it offers.

"The highly synergistic acquisition of Dalian Huiming dovetails perfectly into our expanded business model," said Mr. Li. "We believe our plans to distribute soybeans and mushrooms under the recently acquired 'Xiaoxinganling' brand name will greatly benefit from China Organic's enhanced reach and influence through Dalian Huiming."

About China Organic Agriculture

China Organic Agriculture is an active trader of agricultural products in China. The Company's high-growth business plan is designed to enable it to capitalize effectively on China's burgeoning economy and expanding class of consumers with the ability to acquire upscale products. The Company has developed an extensive distribution network throughout many of China's major cities, including Beijing, Shanghai and Nanjing, and is positioned to leverage those networks to establish broad distribution of a number of agricultural, food and related premium products. The Company has experienced significant growth since its inception in 2002 and has implemented a number of strategic initiatives to expand sales and revenues. For more information, please visit: www.chinaorganicagriculture.com

FORWARD-LOOKING STATEMENTS: This document includes forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning future acquisitions, estimates of, and increases in, production, cash flows and values, statements relating to the continued advancement of China Organic Agriculture's products and other statements which are not historical facts. When used in this document, the words such as "could," "plan," "estimate," "expect," "intend," "may," and similar expressions are forward-looking statements.

Although China Organic Agriculture Inc. believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that actual results will be consistent with these forward-looking statements. Important factors that could cause actual results to differ from these forward-looking statements include, but are not limited to, those set forth in our reports filed with the Securities and Exchange Commission, together with the risks discussed in our press releases and other communications to shareholders issued by us from time to time, such as our ability to raise capital as and when required, the availability of raw products and other supplies, competition, the costs of goods, government regulations, and political and economic factors in the People's Republic of China in which our subsidiaries operate.

SOURCE: China Organic Agriculture, Inc.

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