Western food makers source Chinese organic ingredients
gradually turning to China as the ambitious country makes strides
in organic production, reports Lindsey Partos.
With 300,000 hectares of organic fields China has just 11 per cent of global organic farmland. But exports of organic beans and edible seeds in particular to Europe, the US and Japan are slicing into local markets.
"Chinese producers have been most successful in the European market where they have become established suppliers of organic ingredients,"writes Organic Monitor, author of a new report on Chinese organic crops.
Demonstrating their determination to penetrate deeply into western organic markets, China has set up a large number of international agencies to provide organic certification services. And the move is paying off.
China has become the number one non-EU source of organic beans and edible seeds to western Europe. Chinese firm now dominate the supply of organic pumpkin seeds, sunflower seeds, kidney beans and black beans.
Inroads have also been made in the organic soya bean market. The report claims that Chinese companies now supply over a third of the organic soya beans used by European food processors.
"The high market share is partly due to poor harvests in South America, especially Brazil. However there has been a large rise in quality of Chinese soya beans in recent years," writes Organic Monitor.
GM concerns about soy sourced from North America has also driven organic food companies in Europe to favour the Chinese option.
With the Chinese government pledging more support for the organic food industry, production of organic crops is expected to rise.
The majority of certified organic foods will continue to target the export market, "as long as they continue to generate hard currency for the emerging economic power". Although a burgeoning home food market is likely to also drive growth in organic farmland. Growing affluence in China is transforming the landscape for food: industry sales have more than quadrupled since the mid 1990s, rising from under 100 billion yuan (€9.2bn) in 1991 to well over 400 billion yuan (€37bn) just ten years later.
Driving the market is the increased spending power and changing eating habits of China's 1.3 billion people who are gradually changing the country's food sector, both domestically and in foreign trade.
There has been an increase in per capita income levels, and the consequent increase in disposable incomes has brought about a shift in favour of branded and packaged food.
Changing lifestyles and growing urbanisation in larger cities have also contributed, bringing a wider acceptance of newer products and driving sales for foods like ready meals, pasta and frozen food.
International ingredients players are looking east to prop up tougher markets in Europe and the US. The Asia Pacific region, supported by China, is slated to advance at about 7.3 per cent, year on year, until 2008. This compares to western Europe and the US with 3.7 and 3.3 per cent growth respectively.
