As food sovereignty is an important issue to the Chinese government, the production of grain crops has been strictly controlled and maintained to a high level to meet the basic nutritional needs of the population. However, mainly due to the rising living standards of the Chinese people, consumption patterns have shifted from a grain heavy diet to growing amounts of meat and other animal proteins, vegetables, fruits and nuts. Domestic production of these value-added products experienced the highest growth rates among all types of foodstuff.
It is mainly these value-added food products which were responsible for a dramatic increase in agricultural imports to China in recent years. Imports of meat, dairy products, fruits, and nuts had the highest growth rates and saw another upturn in 2020. In contrast, both imports of bulk commodities, such as soybeans and cotton, and intermediate products, such as vegetable oils, hides and skins, which had increased considerably until 2012, remained relatively flat thereafter. It is very unlikely that these bulk and intermediate products will regain their former market share in the future.
Another major shift has occurred among suppliers. While North America held a market share of roughly 30 percent in 2012, with the United States alone accounting for about 26 percent, this share has declined to only 15 percent in 2019, with a U.S. share of only about 9 percent. On the contrary, imports from the European Union and South America have increased and Brazil is now by far the largest exporting country of agricultural products to China.
Due to its agricultural limitations and growing consumer demand, China’s food imports will most likely further increase in the future. Value-added food products have the largest growth potential, as median income levels are forecast to experience steady growth. However, competition among suppliers is strong and market participants need to adjust well to consumer preferences and market regulations to gain market share.