Tag:sweet spots,Australian farm exports,rising affluence
A number of opportunities exist for Australian farm exports to China but the prime focus in most cases should be on 'sweet spots' in niche areas, rather than on the mass market, according to a visiting authority on Chinese food and agribusiness.
Although China looks set to remain largely self-sufficient in its food staples, Chenjun Pan, senior analyst with Rabobank in China, says these opportunities exist, especially, for Australian-produced beef and grain and, to a lesser extent, pork.
"A sweet spot is where you see three conditions coincide ¨C strong demand potential, insufficient supply and an accessible market," she says.
Ms Pan, who was in Australia as part of Rabobank's Visiting Experts program, says sweet spots for beef include the high-end of the market and offal products.
In pork, in the sweet spots occurred for high-end processed meat and pig offal products.
Thee are others opportunities in grain, in barley, oats and durum wheat.
China's current food and agribusiness imports are mainly in resource and land-intensive commodities (such as soybean, cotton and palm oil) or products for processing (such as frozen fish).
The rapidly-growing affluent sector in China is also driving a change in eating habits ¨C with an increase in meat consumption and a rising concern about food safety.
And this also offered opportunities for Australian producers.
"Overall, meat demand is driven by rising affluence, population growth and urbanisation," Ms Pan says.
"Moreover, with rising income level, food safety, nutrition and other value-adds are increasingly important considerations for meat consumption."
However, Ms Pan warns Australian players face a number of challenges in cracking the prized Chinese export market with issues including price (with the strong Australian dollar relative to the RMB), competition from lower-cost producers and market access barriers.
Also, the Chinese central government is committed to the long-term policy goal of self-sufficiency in food staples, although China is expected to import corn in the foreseeable future.
"With only seven per cent of the world's land, but 22 per cent of the world's population, China has been surprisingly successful at feeding its population," she says.
"It's achievied self-sufficiency in the past three decades under severe conditions such as lack of water and land resources. "Indeed, the country has gone even further to step up as a major processed food exporter."
But Ms Pan says the long-term feasibility of remaining self-sufficient is now under question with China's grain reserve at record lows and demand for food growing.