Getting a taste

Chinese diners are reshaping global agriculture


Going nuts for macadamias

As China’s population has grown, so has its appetite. And as people become wealthier, their tastes become more varied too.

In WiC294 we reported on Fruit Day, an online retailer of fresh products trying to outmaneouvre supermarket supply chains. Its founder Zhao Guozhang chose the cherry as its flagship fruit, signing deals with American producers to bring cherries to China at a cheaper rate, and even rebranding the fruit locally by creating a trendy new name for it.

Chinese demand for cherries has soared. In addition to the North American growers, Global Times reports Chilean farmers now export 85% of their cherry harvests to China, compared to precisely nothing 10 years ago.

Fruit shipments to China as a whole have risen from just 2% of Chile’s exports in 2007 to 25% in 2016.

New Zealand has bumped up its exports as well, sending 30% of its cherries to the Chinese market. According to the Global Times, some of the farms on New Zealand’s south island are now using helicopters to force dry air across their cherry trees to ensure they’re ripe in time for the peak sales season during the Chinese New Year.

In neighbouring Australia exports of macadamia nuts have swollen eleven-fold to China over the last five years, reports CBN. And in Mexico it’s the avocados that have become the hot product, with demand from China increasing about 250% a year since 2012, according to the Financial Times (see WiC276 for our original mention of the surge in sales of the ‘crocodile pear’). Chinese imports of avocados from Mexico and Chile reached 154,000 tonnes last year.

The Chinese are hungry for more than fresh fruit and nuts. The value of the country’s meat imports surpassed those in the US last year, totalling over $10 billion (the China Daily reported this week that McDonald’s now sells 1,600 burgers a minute to Chinese consumers).

And one particular dish where Chinese appetite notably outweighs America’s is offal. Bloomberg reports that offal accounts for just 3.6% of American meat imports, but it constitutes nearly a quarter of Chinese meat purchases from overseas, a boon for foreign livestock farmers whose own domestic consumers generally regard these as low value waste products.

But perhaps the biggest impact of China’s increasingly meaty diet (which averages 50kg per person today versus 20kg of meat consumed annually in 1989) has been on foreign soyabean farmers. Imported soya has been on the rise to feed China’s pigs and chickens – the two principal meats consumed by Chinese – for which it’s the best protein feedstock. Local supply of soya is insufficient to meet demand, with imports this year forecast to reach 93 million tonnes (the equivalent of five cargo vessels per day).

Brazil has been the biggest beneficiary of the upsurge, notes the FT, accounting for about half of imports, while Argentina provided 10%. The remainder is largely provided by the US with the FT reporting “delegates from China’s commerce ministry are due in the soyabean-rich state of Iowa next month to sign an agreement that could include a record purchase, the US Soybean Export Council says”. And no one expects Chinese demand to let up – with the USDA forecasting imports will reach 121 million tonnes within a decade, up more than 30% from current levels.

A hungry nation isn’t content to rely on imports of food from foreign producers, however. For years Chinese agricultural companies have been heading overseas and buying farmland with the intention of shipping some of the harvests back home. However, these deals haven’t always borne fruit. So the other prong in China’s battle for food security is to resolve its domestic challenges of undersized farms, outdated technology and contaminated soil. Reuters reports that Agricultural Development Bank of China is pledging Rmb3 trillion ($437 billion) in loans by 2020 to finance innovative projects, for instance.

One of the ideas for a green revolution is vertical farms. The Japanese have taken the lead in growing vegetables hydroponically, and vertical farms have won supporters in China because they don’t use the same kinds of fertilisers and they can be housed in urban areas: a practical solution to some of China’s main farming challenges. One such farm is due to start construction in Shanghai this year. So maybe in the near future China’s trendy urbanites will be picking their favourite cherries from a farm downtown, rather than waiting for them to arrive from Chile.

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