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Market Overview – China

July 2018

Market snapshot

  • China was the most populous country in the world with 1.38 billion people in 2017. The population is expected to reach 1.46 billion by 2030.
  • China was the world's second-largest economy and the world's largest all merchandise exporter in 2017. China was also the world's second-largest importer of agri-food and seafood products (considering the EU 28 as a single market).
  • China’s gross domestic product (GDP) increased 6.9% to US$12.2 trillion in 2017. China’s GDP is expected to grow by 6.3% in 2018.
  • Annual consumer expenditure was US$3,363 per capita in 2017, with food and non-alcoholic beverages representing US$739 or 22% of that total.
  • Chinese consumers are increasingly purchasing health and wellness food products, including organics and fortified / functional foods. Packaged foods are also increasingly popular, especially dairy, baby food, and confectionary products.

Contents

Production

In the past few years, corn has overtaken rice as China's primary domestic crop. Volume production grew by a compound annual growth rate of 3.0% from 2012 to 2016.

Meat production is dominated by pork which has grown by a compound annual growth rate of 0.3% from 2012 to 2016. Chicken, the second-largest meat category, grew by a compound annual growth rate of 0.1% over the same period.

Pig numbers have decreased from 2012 to 2016, while sheep, goat, cattle, and buffalo numbers have increased.

Top Ten Crops Produced in China (That Are Also Produced in Canada), ‘000 tonnes
Crops 2012 2013 2014 2015 2016 CAGR* % 2012-2016
Corn 205,719.3 218,621.9 215,812.1 224,795.3 231,837.5 3.0%
Rice 205,936.3 205,201.7 208,239.6 209,811.7 211,090.8 0.6%
Fresh Vegetables 160,916.8 161,936.7 163,405.8 168,408.9 170,168.9 1.4%
Wheat 121,030.0 121,930.5 126,215.2 130,192.3 131,696.4 2.1%
Sugar cane 123,691.4 128,735.1 126,153.5 117,632.9 123,059.7 -0.1%
Potatoes 92,807.9 95,993.6 95,571.0 94,916.7 99,122.4 1.6%
Watermelons 70,955.7 73,156.5 75,054.3 77,357.5 79,244.3 2.8%
Sweet potatoes 71,415.6 70,741.1 71,540.0 71,355.3 70,793.7 -0.2%
Cucumbers 51,933.5 54,361.6 56,995.1 60,868.9 61,949.1 4.5%
Tomatoes 48,168.6 50,694.1 52,595.0 54,920.0 56,423.8 4.0%

Source: Food and Agriculture Organization – Statistics Division (FAOSTAT) Agricultural Production, February 2018.

*CAGR: Compound annual growth rate.

Top Five Meats Produced in China, ‘000 tonnes
Meat indigenous ('000 tonnes) 2012 2013 2014 2015 2016 CAGR* % 2012-2016
Pork 54,435.7 55,917.3 57,661.8 55,834.8 55,040.6 0.3%
Chicken 13,198.5 13,327.0 12,829.6 12,631.0 13,262.4 0.1%
Beef 6,306.3 6,410.4 6,566.8 6,670.5 7,012.0 2.7%
Duck 2,950.0 2,998.5 2,887.2 2,840.3 3,032.7 0.7%
Goose 2,544.6 2,578.0 2,465.5 2,420.6 2,411.8 -1.3%

Source: Food and Agriculture Organization – Statistics Division (FAOSTAT) Agricultural Production, February 2018.

*CAGR: Compound annual growth rate.

Top Five Livestock Produced in China, ‘000 head
Livestock ('000 head) 2012 2013 2014 2015 2016 CAGR* % 2012-2016
Pigs 475,067.8 482,102.7 480,095.8 471,550.1 456,773.3 -1.0%
Sheep 139,615.7 143,680.0 150,017.4 158,490.2 162,062.7 3.8%
Goats 142,933.5 141,529.3 140,506.9 144,817.7 149,091.1 1.1%
Cattle 80,403.0 80,328.8 80,653.0 82,265.7 84,523.4 1.3%
Buffaloes 23,347.9 23,253.5 23,347.8 23,662.3 23,800.6 0.5%

Source: Food and Agriculture Organization – Statistics Division (FAOSTAT) Agricultural Production, February 2018.

*CAGR: Compound annual growth rate.

Trade

China is a net importer of agri-food and seafood products. In 2017, China's agri-food and seafood trade deficit was C$65 billion with imports valued at C$162 billion, and C$96.9 billion in exports. China's agri-food and seafood imports increased at a compound annual growth rate of 2.9% from 2015 to 2017.

China's top agri-food and seafood imports in 2017 were soybeans, baby food, palm oil, frozen boneless beef, and wine. Key supplying countries were Brazil, the United States, Australia, Canada, and New Zealand. Canada was China's fourth-largest supplier of total agri-food and seafood products in 2017, with 5.5% market share.

Canada's agri-food and seafood exports to China were valued at C$8.1 billion in 2017. Top exports were canola seed, soybeans, canola oil, dried peas, and canola oilcake. In 2017, Canada registered an agri-food and seafood trade surplus of C$6.5 billion with China.

China’s Top Agri-Food and Seafood Imports from the World, 2017
Commodity Import Value C$ millions Top Suppliers & Market Share 1 Top Suppliers & Market Share 2 Top Suppliers & Market Share 3 Canada's Share
Soybeans 51,580 Brazil 52.8% United States 35.3% Argentina 6.6% 2.2%
Baby food 5,265 Netherlands 28.7%  New Zealand 16.8% Ireland 16.1% 0.0%
Palm oil 4,516 Indonesia 63.2% Malaysia 36.7% Thailand 3.7% 0.0%
Frozen boneless beef 3,506 Brazil 32.2% Australia 19.6% Uruguay 18.4% 2.9%
Wine 3,306 France 41.1% Australia 26.7% Chile 10.4% 0.5%
Greasy shorn wool 3,301 Australia 79.7% South Africa 8.1% New Zealand 4.3% 0.0%
Fish Meal 2,889 Peru 57.6% United States 7.2% Vietnam 7.1% 0.0%
Cotton 2,837 United States 45.3% Australia 22.2% India 8.9% 0.0%
Frozen edible pork offal 2,737 United States 41.2% Denmark 10.4% Germany 10.1% 8.7%
Canola seed 2,733 Canada 98.7% Australia 1.2% - -

Source: Global Trade Tracker, 2018.

China's processed food imports were valued at C$65 billion in 2017. Canada's share was 3.7%. The United States, New Zealand, Indonesia, Australia, and France were the largest suppliers of processed food to China in 2017, providing 40.3% of the market. China's processed food imports grew by a compound annual growth rate of 5.6% from 2015 to 2017.

Retail sales

Packaged food sales increased at a compound annual growth rate of 4.4% over the period from 2013 to 2017 and are expected to continue increasing at a rate of 5.7% from 2018 to 2022. Within this category, the best performing segments in the last five years were baked goods, sauces, soup, baby food, and breakfast cereals.

Chinese consumers are increasingly purchasing health and wellness food products as shown by the compound annual growth rate of over 5% on most types of health and wellness food products over the period from 2013 to 2017, particularly organics, which grew by 20%. Although retail sales of organics are relatively small compared to naturally healthy and fortified/functional foods, there is great potential for growth with organic sales forecasted to increase at a compound annual growth rate of 13% over the forecast period of 2018 to 2022.

Supermarkets and hypermarkets are the main distribution channels for packaged food and are outperforming small independent grocers. However, these channels have lost market share in packaged food sales in recent years due to rising competition from e-commerce sites, which are experiencing growth thanks to the increasing number of smartphone and Internet users.

Health and Wellness Food Retail Sales in China Historic in US$ Millions, Fixed 2018 Exchange Rate
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Total 83,131 92,552 97,933 101,796 107,632 5.3%
Better For You 1,879 2,011 2,097 2,300 2,481 5.7%
Fortified/Functional 38,135 43,188 45,269 46,501 48,866 5.1%
Free From 9,515 9,643 9,523 9,218 9,124 -1.0%
Naturally Healthy 32,463 36,176 39,111 41,425 44,323 6.4%
Organic 1,139 1,534 1,933 2,351 2,839 20%

Source: Euromonitor International, 2018.

*CAGR: Compound annual growth rate.

Packaged Food Retail Sales in China Historic in US$ Millions, Fixed 2018 Exchange Rate
Category 2013 2014 2015 2016 2017 CAGR* % 2013-2017
Total 186,514 202,516 209,246 218,910 231,641 4.4%
Baby Food 14,994 17,370 18,811 19,703 21,490 7.5%
Baked Goods 17,979 20,323 22,210 24,980 28,571 9.7%
Breakfast Cereals 671 747 827 914 1,002 8.4%
Confectionery 14,710 16,160 15,679 15,725 16,006 1.7%
Dairy 45,237 49,965 51,066 52,917 55,221 4.1%
Edible Oils 13,883 13,565 13,798 14,102 14,404 0.7%
Ice Cream and Frozen Desserts 6,706 7,177 7,057 7,244 7,496 0.0%
Processed Fruit and Vegetables 1,021 1,120 1,210 1,336 1,466 -2.1%
Processed Meat and Seafood 13,053 12,817 12,539 12,732 13,070 3.0%
Ready Meals 1,110 1,179 1,081 1,013 996 7.4%
Rice, Pasta and Noodles 25,780 27,486 28,007 28,853 29,911 5.9%
Sauces 10,979 12,345 13,541 14,554 15,670 8.9%
Savoury Snacks 12,922 14,050 14,953 16,065 17,230 5.9%
Soup 51.5 58.5 67.6 73.7 78.9 8.9%
Spreads 965 1,027 1,085 1,155 1,225 4.9%
Sweet Biscuits 6,454 7,127 7,314 7,546 7,804 3.9%

Source: Euromonitor International, 2018.

*CAGR: Compound annual growth rate.

Health and Wellness Food Retail Sales in China Forecast in US$ Millions, Fixed 2018 Exchange Rate
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Total 114,567 122,295 131,142 140,701 151,026 5.7%
Better For You 2,701 2,979 3,289 3,629 3,999 8.2%
Fortified/Functional 51,959 55,308 59,023 62,995 67,303 5.3%
Free From 9,220 9,453 9,857 10,369 10,989 3.6%
Naturally Healthy 47,302 50,559 54,292 58,283 62,513 5.7%
Organic 3,385 3,996 4,682 5,426 6,223 13%

Source: Euromonitor International, 2018.

*CAGR: Compound annual growth rate.

Packaged Food Retail Sales in China Forecast in US$ Millions, Fixed 2018 Exchange Rate
Category 2018 2019 2020 2021 2022 CAGR* % 2018-2022
Total 246,123 263,109 282,123 302,921 325,368 5.7%
Baby Food 23,535 25,624 27,770 29,991 32,332 6.6%
Baked Goods 32,222 36,465 41,447 47,019 53,252 10.6%
Breakfast Cereals 1,084 1,170 1,265 1,365 1,468 6.3%
Confectionery 16,624 17,449 18,521 19,806 21,310 5.1%
Dairy 58,163 62,246 66,432 71,033 75,897 5.5%
Edible Oils 14,743 15,125 15,577 16,076 16,624 2.4%
Ice Cream and Frozen Desserts 7,838 8,173 8,549 8,921 9,288 3.4%
Processed Fruit and Vegetables 1,592 1,733 1,886 2,047 2,213 6.8%
Processed Meat and Seafood 13,412 13,866 14,480 15,195 15,953 3.5%
Ready Meals 992 1,012 1,045 1,083 1,122 2.5%
Rice, Pasta and Noodles 31,007 32,292 33,853 35,612 37,530 3.9%
Sauces 16,926 18,212 19,588 20,990 22,407 5.8%
Savoury Snacks 18,494 19,828 21,305 22,844 24,459 5.8%
Soup 84 89 94 98 101 3.7%
Spreads 1,295 1,367 1,446 1,526 1,606 4.4%
Sweet Biscuits 8,112 8,457 8,866 9,315 9,806 3.9%

Source: Euromonitor International, 2018.

*CAGR: Compound annual growth rate.

For more information

International Trade Commissioners can provide Canadian industry with on-the-ground expertise regarding market potential, current conditions and local business contacts, and are an excellent point of contact for export advice.

Overview of Trade Commissioner Services in China

For additional intelligence on this and other markets, the complete library of Global Analysis reports can be found on the International agri-food market intelligence page, arranged by region.

Resources

Market Overview - China
Global Analysis Report

Prepared by: Kris Clipsham, International Market Research Analyst

© Her Majesty the Queen in Right of Canada, represented by the Minister of Agriculture and Agri-Food (2018).

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