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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (4611)	3/28/2005 2:10:14 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

Higher Incomes Changing China's Food Demands, U.S. Officials Say By Kathryn McConnell Washington File Staff Writer This article is one in a series on U.S.-China economic relations. Washington - Rising incomes and continued urbanization during the past decade have led to a broader diversity of diets in China and in the types of food the country imports from the United States and elsewhere, say two U.S. agricultural researchers. The change is both good and worrisome for U.S. agricultural exporters as they adjust to meeting China's new food demands and face increasing competition from other food-exporting countries, according to Fred Gale and Francis Tuan, economists with the U.S. Department of Agriculture (USDA) Economic Research Service. Farmers and food-related exporters that can keep up with the rapid pace of change will be best prepared to make further inroads in the China market, Gale and Tuan said during an interview with the Washington File. Changes in the structures of agricultural production, food processing and food distribution in China are transforming the agricultural trade of the world's largest agricultural country, the economists wrote in USDA's Amber Waves magazine. The large size of China's food market offers opportunities for foreign agribusiness companies but could also give Chinese companies a platform to develop into major competitors in world food markets, they said. Food consumption in China has changed from a reliance on basic staples such as rice and noodles accompanied by small amounts of vegetables and meat to more meat, eggs, dairy, oil, fruit, seafood, bread and crackers, Gale said. Chinese consumers also eat more restaurant and processed foods, he said. China's cotton imports are also on the rise as the country seeks more raw inputs for its growing textile manufacturing industry, the economists said. Although China has increased its cotton production by expanding the number of hectares devoted to growing the crop and by adopting higher-producing and pest-resistant gene-enhanced varieties, China's cotton growers still cannot keep up with the country's textile industry's demand for the crop, he said. China's increased demand for protein has translated into more import demand for soybeans, which are processed mostly into cooking oil and livestock feed, Gale said. In spite of growing millions of tons of soybeans each year, China is the world's largest soybean importer, surpassing the European Union in 2003, he said. The U.S. stake in soybean trade with China is high. Soybeans are the largest U.S. agricultural export to the country, totaling $2.4 billion in 2004, according to Tuan. But lower-cost soybeans now on world markets - produced by such countries as Brazil and Argentina - are increasingly becoming an important part of China's agricultural imports, he said. A growing number of supermarkets in China are replacing traditional farmers' markets and family corner stores - a change that is having an effect on demand patterns, Tuan said. Supermarkets offer a wider variety of foods - such as frozen, canned, ethnic and snack foods - at reasonable cost and in attractive packaging that increases consumers' awareness. Another factor affecting demand is the increase in convenience stores located near public mass-transit stations. The stores offer easy-to-prepare meal options that have proved convenient for families in which all adults work outside the home, he said. Nearly every major U.S. food company, including restaurant chains such as Pizza Hut, now has operations in China, producing most of its products locally to keep costs down and save on transportation time, Gale said in a recent interview. Yet Japanese agricultural companies are posing growing competition for the United States in China and other Asian markets, Gale said. Japanese firms have developed several bases in China for producing products such as vegetables, mushrooms, garlic and poultry to meet demand for such high-value products domestically and in other countries in the region. See related article “China's Food Import Standards Often Unclear, U.S. Officials Say” tokyo.usembassy.gov