Published on : Mar 28, 2014
China, the world’s second-largest economy is projected to spend a whopping USD 1.75 trillion on foodstuffs by 2050. This presents a massive opportunity to agricultural nations across the world to gear up for a chance to make profits from this impending consumption boom in China. Competition between agricultural producers across the Americas, Europe and Australia-New Zealand is heating up with every country trying to make the most of this opportunity. The estimates of China’s expenditure on food over the next three decades feature in a new study carried out by the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES). China’s expenditure on food amounts to twice that of its food spends of USD 870 billion in 2009.
China boasts sufficiency in the domestic availability of food staples such as poultry, grains, vegetables, and pork. However, the same cannot be said with products such as fine meat and dairy products that are witnessing a high demand from the millions of people that comprise the rich middle-class in China. This is where a lucrative export opportunity exists for foreign producers of meat, dairy, and other such products.
Australia is aggressively working towards cashing in on this requirement given its reputation as a ‘green and clean’ producer of dairy products, meat, wine, and grains. It also has an advantage over other European and American players in terms of proximity from China, a similar time zone, and the presence of several producers in the meat, dairy and grains sector. However, the country also faces constraints in the form of its high dollar value that hinders its ability to be cost-competitive, as well as high cost of production.
Other countries that are strategizing to meet this ready-to-explode food demand include: Brazil, United States, France, Germany, the Netherlands, New Zealand and Denmark.