Fresh Australian Produce in Demand in China

Imported fruit prices increase 36%
Food prices are continuing to soar in China in the midst of an agricultural boom.
In the year to April 2019, food prices grew 6.1% in China. Vegetable prices jumped 17.1% and pork prices grew 14.4%. The domestic price increases are making imported alternatives more attractive, for example imported fruit prices grew 36%.
Well-branded food and beverages command a higher premium and are less susceptible to fluctuations in commodity prices. Sophistication of branding and marketing are essential, and with Australia’s reputation for high quality food, Aussie products can command a higher premium in a huge marketplace.

Alibaba selling drive
During the recent “selling drive” by Alibaba and JD, small well-packaged cartons of fresh fruit increased in price by 11%-36%. They are becoming a popular gift package sent by children to their parents. The small packs contain up to 10 pieces of fruit, and with a usual delivery time of around 24 hours, these packs are quickly growing in demand.

New wholesale centre
Prices at the Xinfadi Wholesale Centre (Beijing), which supplies 70% of Beijing’s vegetables, have grown 78% since April 2018. With a population of 18.5 million people, Beijing has recently developed a new wholesale centre in its south eastern suburbs.

China’s food problem
China has to feed 20% of the world population with just 7% of arable farmland; it is having a hard time keeping up with supplies. Added to this is the drift of Chinese agri workers moving to the bright lights of the cities, causing local food costs to increase substantially. Therefore, China needs to import food now and more in the future. For example, with China’s population becoming wealthier, and eating “better food”, and with Australia recognised as “clean and green” there are huge opportunities for agri producers to secure market share in China.

Opportunity for Australian agri products
In China, grocery home deliveries are growing at the rate of 36% annually with a value of over $30 billion(USD) in 2018. Alibaba has two online grocery stores, Hema and JD 7Fresh. Others getting involved include Meituan and Suning. Younger consumers and families with high incomes are using the service four times per week or more. It’s another opportunity for Australian agri products and fresh fruits with brand recognised, quality packaging, to secure premium prices for their product in a high growth market.