China’s appetite for fruit and vegetables, dairy and meat is expected to increase by 17% between 2015 and 2025, according to Rabobank.
According to Rabobank, China’s growing demand for fresh food offers huge opportunities for imports from Europe’s well-reputed food industry.
This increase in demand is being driven by continued economic growth and urbanisation with the Chinese economy expected to grow by 6-7%.
This equates to an increase of 38m households in the upper middle class, it says.
According to Rabobank’s Food and Agribusiness Supply Chain Analyst, Paul Bosch, this increased demand from China will be beneficial to European producers.
China’s demand for fresh, safe and high-quality food is outstripping its capacity to produce and deliver domestically. Europe is able to address this need.
“However, the growth in consumption of perishable food in China will only continue if supply chains deliver on quality and safety.
“To a large extent this depends on the proper cooling of products during storage handling and transport,” said Bosch.
New railroad to reduce transport time by 30 days
To deal with this increased demand, a new railroad will be developed, connecting Chongqing and Rotterdam, which has the potential to reduce transport by over 30 days between Europe and China compared to conventional shipping.
According to Rabobank’s Wiebe Draijer, Chairperson of the Executive Board, the new railroad or the ‘New Silk Road’ will be beneficial to both European and Dutch agriculture.
“The ‘New Silk Road’ provides tremendous opportunities for Sino Dutch agricultural trade.
With 20% of the world population, but only 10% of its arable land and 6% of its water, China faces enormous challenges on food security and safety. That’s why Rabobank has to be here, said Draijer.
According to Draijer, China has made massive investments in cold food infrastructure, which has increased by 733% over the past five years.
But, according to Draijer, China’s cold chain sector is still lagging and needs to improve in terms of both quality and capacity.
Rabobank also says that once the ‘New Silk Road’ has matured it has the capability to stabilise China’s food system by enhancing international trade and reducing the vulnerability to regional events.
It will also have the potential to enhance competition, changing the competitive positions of current trading partners like the US, Brazil and Australia, as well as improving the price stability of the food system, it says.