Presentation on theme: "China: Opportunities & Challenges for Produce from South America"— Presentation transcript:
1 China: Opportunities & Challenges for Produce from South America Mabel ZhuangDirector, M.Z. Marketing CommunicationsPMA China Consultant
2 Agenda A Little Background: China’s Economy Overview Setting the Context: China’s Fruit ImportsThe Opportunities for South American Produce to China
3 China’s GDP in 2011 has reached $7 China’s GDP in 2011 has reached $7.5 trillion with annual growth rate at 9.2%China has surpassed Japan and become the second largest economy over the world only next to the United StatesThe predicted growth rate for would be 7.5%
7 China Opportunities - The Magic of 22/7 China has 22% of the worlds population …yet only 7% of the world’s arable land.Over 200 cities in China with a population 1+ million people…only 35 in all of EuropeIn early 2012 became the largest grocery market in the worldThird largest ag importer…and moving up
8 Chinese Imports are Outpacing Exports Source: WTO
9 Rising Middle Class in China – Import Opportunities
10 Food trade deficit begins In short, here is the opportunity for suppliers…Net food importInitial Industrialization periodInterim industrialization periodLate industrialization periodTimeFood trade deficit beginsChina joined WTONowReform and opening upNet food exportSource: COFCO
11 China Fruit Imports (2010 [blue] vs 2011 [red]) Source: China Ministry of Commerce
13 Future OpportunitiesFruit and vegetable imports well positioned – especially for branded products.Large and growing middle classDomestic production costs risingWillingness to source globally
14 Consumer Fruit Consumption Trend Daily consumption habits & recognition of its generalhealth benefitsFruits used as a major gift item for holidays, familyvisits, and specials occasionsPreference over imported fruits and more choices of varieties compared with two decades agoGrowing concerns over the food safety
15 South American Fruit Export to China, 2011 Statistics (Source: Ministry of Commerce, PRC)CountryImport Volume(kg)Import Value($)PercentageChile172,693,095451,858,04589.84%Peru15,777,08443,387,9788.63%Ecuador9,105,7735,475,5371.09%Argentina874,5172,206,3790.44%Columbia19,23740,2360.01%Total198,469,706502,968,175
16 Peru Fruit Export to China In 2011, Peru achieved growth of 126%, which increased its market share from 1.2 to 1.7 percent.Peru is the third largest exporter of grapes to China after Chile and the U.S.
17 Chile Fruit Export to China Chile is the number one supplier of cherries and grapes to China, and one of the major suppliers of apples along with the U.S.In 2011, Chile’s fruit export to China has enjoyed a growth rate at 78.5%, increasing their market shares to 18% next to Thailand only.
18 Permissible Fruits to China Import countryCatalogPanamaBananasEcuadorColombiaCosta RicaUruguayCitrus (mandarin, orange, grapefruit, lemon)ArgentinaCitrus (orange, grapefruit, tangerines and their hybrids), apples, pearChileKiwifruit, apples, grapes, plums, cherries, blueberryPeruGrapes, mangoes, citrus (tangerines, orange, grapefruit, lime)
19 South America Advantages Good bilateral relationshipMore market accessCounter SeasonLow Tariff for fruits (Peru 5.2%, Chile 3.9%)Competitive PriceImproved QualityStrong Interest from the Chinese Trade
20 China Challenges Language & distance barriers Low consumer awareness-South AmericanFruits often labeled as from other originsUnder-developed cold chain infrastructure
21 Fruit Distribution in China Export to H.K. still dominates but declined last year due to tight government controlJiangnan Wholesale Market in Guangzhou is the largest for imported fruit in China, distributing to many secondary wholesale markets in ChinaDirect Import from major wholesale markets with on-site CIQ office：-Shanghai Longwu Fruit Wholesale Market- Shanghai Agricultural Products Wholesale Market (SAP)Importers on the wholesale market makes the purchasing decision, while the market provides logistic service.
23 Fruit Retail in ChinaModern Retailers Chains, like Walmart, Tesco, Metro, Carrefour, along with local chains mostly sourcing from whole-sale marketMom & Pop Stores/Wet MarketSpecials channels:--Fruit Shop Chain Stores growing fast--On-line Fruit Shops with home delivery---TV shoppingFood Service: Restaurants, Bakeries & Juice Bar
26 Import Documents Required Phytosanitary CertificateCertificate of OriginInvoicePacking ListBill of LadingNon-wood packing materials certificate or FumigationCertificate if wooden Pallet used
27 Quarantine Requirement The only stricter quarantine requirement to Chilean fruit: Pallet must bear the pallet number and the pallet number must show on the phytosanitary certificate for air shipments. Cold Treatment: only to fruits from V & RM, conditions normally 0.5 degree Celsius for 15 days. Ocean - Air: this is forbidden to all origin, but other origin does not use this transportation, while Chile does. On the site inspection, the same to all origins.
28 Projection for FutureIncreased consumption for both domestic and importedfruits, per capital fruit consumption is expected to increase from 40 kilos to 48 kilos in 2020.More direct import to mainland China.Volume will continue to increase, but the growth rate will slow down.High value products will have good future, like blueberries.
29 Commitment to the Market & Exploration of New development Some SuggestionsCommitment to the Market& Exploration of New developmentTrade Education-seminars, trade delegation, trade shows in ChinaConsumer Promotion & Branding-retail promotion, Advertising, P.R., Social MediaChinese-speaking supporting staff on the market
30 PMA in China Two-day Produce Cold China Training, Sep., 2012 Extensive Research & Market DevelopmentStrong relations with Chinese associations and importersPMA Roundtable with China Produce Industry, June, 2012Two-day Produce Cold China Training, Sep., 2012Chinese Buyer’s Delegation to Fresh SummitPresentation at the Logistic Forum of China Chain Storeand Franchise Association’s annual conventionPresentation at China Fruit and Vegetable Trade FairEngagement with American/Chilean Embassies inChinaGlobal Development Council Meeting in Shanghai,March，2013
31 E-mail: email@example.com Thank You!For More Information:Mabel Zhuang