Mark Tanner
Mark Tanner
24 February 2016 0 Comments

If you were to ferret through the kitchen of a wealthy urban consumer’s apartment in China, there’s a good chance you’d find a host of imported goods. You’d be a third more likely to find a bottle of foreign wine than a year ago. Even in the countryside, the humble farmer may have a sack of imported grain to feed the pigs and cows.

Although city dwellers and villagers’ motivations for imports are notably different, the common theme is that Chinese are continuing to demand more foreign food.  Annually, China imports $115 billion worth of agricultural goods alone – not far off the $150 billion it spends on crude oil imports.

China accounts for just 8% of the world’s arable land and 19% of the world’s population.  A good portion of that land is polluted, and much of it is farmed using rudimentary practices and technology. That doesn’t bode well for feeding 1.35 billion people who are collectively growing wealthier and more educated by the day, and as a result, demanding more protein and higher quality fare.

Although foreign food brands and commodity traders may be rubbing their hands, Beijing doesn’t share the same enthusiasm. Food security is a key strategic goal of the Chinese Government. Few things can mobilise a population into unrest more than insufficient or unaffordable food supplies.

Evidence of China’s quest for food security doesn’t come much clearer than its largest ever foreign acquisition.  State-owned China National Chemical Corporation announced this month that it will shell out $43 billion to buy Swiss company Syngenta, one of the world’s biggest producers of crop protection products, including pesticides, fungicides and seeds that can increase harvests of corn, rice, and wheat.  That is more than six times the size of China’s much-debated 2013 acquisition of American’s biggest pork company Smithfield.

Although some would suggest that Genetically Modified Organisms such as Syngenta products are China’s best shot at ensuring food security, Beijing policy has, until now, indicated a distinct lack of support, with not one GM crop being approved in a decade. Similarly, as many as 84% of Chinese consumers are opposed to Genetically Modified food.

The Syngenta purchase is another step for China to increase yields from its farms, but foreign food exporters shouldn’t be too worried just yet.  China has increased its agricultural productivity 300% since 1961, but the increased supply has still fallen well short of soaring demand.  And even if it did, it will take many years and significant changes in production processes before Chinese consumers trust local producers and supply chains in feeding themselves and their children. Go to Page 2 to see this week’s China news and highlights.

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