Growing demand of olive oil in China

By 2018, China will become the world`s largest consumer of imported food with a market valued at up to US$80 billion. According to forecasts by the Association of Food Industries, AFI, food imports in China will see a growth spurt for the next decade. This forecast seem to be particularly true after the success of last edition of World of Food Beijing fair at the end of November.

As a matter of fact with China`s economic development, the domestic market has increasingly strong demand for imported food with growing acceptance for the imported food market. For the past five years, food imports into China grew at an average annual rate of more than 20%. In 2011, the value of China’s imported food amounted to US$36.89 billion, a year-on increase of 37.1%. From January to November 2012, food imports were valued at US$40.8 billion, an increase of 25.1%. Food imports for Northeast China and North China, together with Shandong region reached US$19 billion (of which, Beijing accounted for US$7.66billion; Tianjin, US$3.39 billion; Liaoning, US$2.58 billion; Shandong, US$6 billion and Northeast China and North China as well as other regions, US$900 million), taking up approximately 45% of the entire country’s food imports.In 2012, these figures were US$7.66 billion for Beijing, an increase of 52.7%, US$6.52 billion for Shanghai, an increase of 20.2% and US$8.75 billion for Guangdong, an increase of 18.8%. No surprise, as Beijing is one of the largest and wealthiest cities in China (20 million people, GDP/head 11,000 USD, double the China average) and influences a market of at least 200 million people in surrounding provinces.

The good news for olive oil sector is that the regional demand in Beijing saw an annual growth of 55% and has high margins, with low entry barriers. An untapped market potential to pay attention to, as in this area there is a radial growth driving consumption. Other agri-food products that can be imported with wide margins are: meat (meat imports grew 214% in 2012/13 as China consumes ¼ of all meat worldwide) and snacks&sweets (still underdeveloped market but with a growth 20% higher than other segments). But most of all wine: with lower import duties since China became member of WHO, this sector registered explosive growth rates of 50-100% since 2007. If we consider that China is importing wine for 1.5 billion USD, this country is expected to be largest importer worldwide very soon.

(Source: World of Food Beijiing Fair 2014-powered by Anuga)

Olio Officina