China

Tariff elimination to boost Australian cherries in China, says importer

Australian cherries are set to benefit from the elimination of tariffs in the Chinese market from the start of next year, according to one importer.

A free trade agreement was signed between the two countries in 2014, with Australian cherry exporters to be subject to zero-tariffs in China from Jan. 1, 2019.

Huang Xianhua, general manager of Shanghai Oheng Import & Export Co., told Fresh Fruit Portal Australian cherries would therefore be on a level playing field with Chile in terms of tariffs.

Chile signed an FTA with China in 2005, and sends the vast majority of its cherries to the Asian country.

Xianhua added that Australia’s higher production costs compared to Chile would be partially offset by its relative proximity to the market, while will save freight costs and make the country more competitive.

Australia is expected to produce a record 18,000 metric tons (MT) of cherries this year, with a little under half due to be exported, according to a USDA forecast. Meanwhile, Chile is expecting to export similar volumes to last season, which saw a huge export rise to 180,000MT.

And according to Xianhua, Chile faces numerous challenges with cherries.

“The processing capacity during the peak of harvest is insufficient, production is easily affected by weather conditions, and the quality is inconsistent, but they are hesitant to invest in protection such as rain nets if the investment it too big,” he said.

U.S.-China trade war
Xianhua also said that the U.S.-China trade war has led to a poor performance of U.S. cherries in the Chinese market this year. China has risen tariffs on the fruit by 40% over recent months, with the latest round coming into effect on July 6.

“This is an enormous cost and is unable to completely be shifted to the consumer end. In the end, the importers have to pay this extra bill,” he said.

Many importers stopped bringing in U.S. cherries while those who continued have run into difficulties, he said.

Other origins have been unable to fill the supply gap, he added.

“There is no [country] that can fully replace it. Canada’s supply is still limited, and Central Asian’s season is too early, also the quality is not good enough and they also have to worry about cold treatment,” he said.

 

Source: https://www.freshfruitportal.com

Agriculture leads the future

"Australian agriculture in a golden age, especially for the Chinese market"
The Australia-China Trade Expo 2018 "Australia-China Economic and Trade Expo" (ACTE2018) is a comprehensive economic and trade exhibition initiated by the Australian-Chinese business community. It was held in Melbourne last weekend and has been successfully held for 12 times.

At this exhibition, the President of Royal Fresh International, and CEO of AATI Holding, David Yang, spoke and shared relevant data on major fruit varieties, distribution, the supply season, fruit farm acquisitions, mergers and integrations in Australia. Royal Fresh has been focusing on Australian fruit exports for many years. AATI Holdings was established in November 2017 as an Australian agricultural technology investment holding company.

"Australian fruit exports to the world are increasing every year. The mainland China market continues to top the list of Australia's first export markets for two consecutive years last year. For example, in 2016, grapes exported 23,946 tons to China and 57,194 tons in 2018; citrus: 40,449 tons in 2017, 72,000 tons in 2018, so on and so forth. " Mr. Yang Jianguang said at the exhibition.

"The golden age of Australian agricultural development is not limited to the rapid growth of Australian domestic agricultural products in the international market in recent years and the good reputation it has won. It also confirms that China's investment in Australian farms has entered a golden age. "

For more information, please click here.

Royal Fresh International Pty Ltd will be looking forward to meeting you at the Hong Kong, Asia Fruit Logistica with Taste Australia. Booth: 3-S17/Hall 3D, Taste Australia

Contact information:
Royal Fresh International Pty Ltd
Email: info@royalfresh.com.au

AATI Holding Pty Ltd
Email: david@aatiholding.com.au


Publication date: 8/29/2018

Source: http://www.freshplaza.com 

 

Image from : https://abf.events/ 

U.S. has launched “biggest trade war in economic history”, says China

The U.S. Government has followed through on its threat to implement tariffs on US$34 billion worth of Chinese goods, in a major escalation of a trade dispute that will likely hit consumers and companies in both countries.

The 25% duties, which went into effect at 12:01 am EST, prompted quick retaliation by Beijing, which said it immediately put its own similarly sized tariffs on U.S. goods, including fruits and vegetables.

China’s Ministry of Commerce said in a statement the U.S. “has violated World Trade Organization rules and launched the biggest trade war in economic history to date.”

It accused the U.S. of bullying and said the move would jeopardize global supply chains and hinder the pace of global economic recovery. It added this would trigger “global market turmoil and will affect more innocent multinational corporations, general enterprises and ordinary consumers.”

“The Chinese side promised not to fire the first shot, but in order to defend the core interests of the country and the interests of the people, we had to be forced to make the necessary counterattacks,” the ministry said.

“We will promptly inform the WTO about the situation and work with countries around the world to jointly safeguard free trade and the multilateral system. At the same time, we reiterate that we will unswervingly deepen reform, expand opening up (of markets), protect entrepreneurship, strengthen IP rights protection, and create a good business environment for Chinese companies in the world.”

The first wave of US$34 billion of tariffs is expected to be followed by a further US$16 billion, with both countries having threatened a total of US$50 billion worth of duties.

With no official talks scheduled between the two countries, and disagreements within the Trump administration about how best to proceed, a quick resolution seems increasingly unlikely, the New York Times reported.

“At the moment, I don’t see how this ends,” Edward Alden, a senior fellow at the Council on Foreign Relations, told the publication.

“This is very much in the president’s hands because he’s got advisers that seem divided, some substantively, some tactically. I just don’t think we’ve had any clear signs of the resolution he wants.”

In terms of U.S. fruit exports, cherries, apples and citrus are likely to be the most affected. However, Produce Marketing Association vice president of global membership and engagement Richard Owen last month said he expected the Chinese market to more easily absorb the higher prices for cherries.


Source: www.freshfruitportal.com

New US tariff threat raises prospect of all-out trade war

US Trade Representative has begun to draw up a list of another $200bn worth of Chinese imports to hit with a 10% duty, while China says it will strike back with combined measures in quantity and quality.

US President Donald Trump has threatened to impose tariffs on another $200bn worth of Chinese goods, adding fuel to the fears about a looming full-scale trade war between the world’s two largest economies.

Mr Trump has requested the US Trade Representative to draw up a list of Chinese imports to hit with a 10% duty.

“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” the president said in a statement.

The move came after Beijing announced its 25% tariff on $50bn of US goods last Friday, responding in “equal scale” to Washington’s earlier hike in customer duty on Chinese products.

“This latest action by China clearly indicates its determination to keep the United States at a permanent and unfair disadvantage, which is reflected in our massive $376bn trade imbalance in goods. This is unacceptable,” Mr Trump added. “Further action must be taken to encourage China to change its unfair practices, open its market to United States goods, and accept a more balanced trade relationship with the United States.”

Should the US unveil another list of Chinese products for extra tariffs, China would have no choice but to resolutely strike back with combined measures in both quantity and quality, a spokesperson of China’s Ministry of Commerce said on Tuesday.

“Such practice of imposing extreme pressure and blackmailing is contrary to the consensus the two sides have reached through rounds of consultations, and disappoints the international community.”

Mr Trump’s initial list includes 818 products worth $34bn in Chinese goods, with the remainder of the $50bn is still to be decided.

The latest back-and-forth measures have sparked concerns that US and China are proceeding into a full-frontal trade war.

The National Retail Federation, a US-based industry group, said in a statement: “This is just what we predicted — a tit-for-tat trade war has erupted and American families are caught in the middle.”

The International Monetary Fund said last week that US trade policies were likely to hurt its domestic economy and undermine the world’s trade system.

IMF director Christine Lagarde said a trade war would lead to “losers on both sides” and might have a “serious” impact.

First published on www.lloydslist.com
Cichen Shen | Wednesday, 20 June 2018

No sign yet of new tariff-related modal shift

High-value global supply chains ‘are well established and will be very difficult to disrupt’ in event of trade war, says FedEx president

There are no signs yet of any significant tariff-related modal shift or plans to alter supply chains as a result of the new US tariffs announced last Friday on imports of Chinese goods, the first of which are due to take effect on 6 July.

In an earnings conference call with analysts yesterday, transcribed by Seeking Alpha, senior executives at US global integrator FedEx were asked whether a trade war could interrupt global growth or whether world was trade too entrenched to allow for any disruption.

President and COO Dave Bronczek replied: “We believe global supply chains, especially those of high-value items, are well established and will be very difficult to disrupt. We are hopeful, of course, that amenable solutions to trade policy issues will be found.”

In terms of any threat to his own company’s business model, Bronczek said: “Our global assets are at such a large scale now that it’s relatively easy for us to reposition our networks, really all around the world, should any (new) trade patterns evolve.”

Asked whether US customers were seeking expedited imports of items from China that will fall under the new tariffs on 6 July, EVP and chief marketing and communications officer Raj Subramaniam responded: “We have not seen any changes from the customer behaviour directly related to these new tariffs.”

He said technology sales were among the key indicators that FedEx monitors and it is “very highly correlated to Asia-US exports”. But it was difficult to discern any clear underlying trend because of the background noise of variables such as cell phone product cycles.

As reported in Lloyd’s Loading List, despite an agreement last month to suspend planned punitive tariffs against one another after achieving “meaningful progress” towards a new trade framework, the Office of the United States Trade Representative (USTR) last Friday released a list of products imported from China that it said would be subject to additional tariffs of 25% as part of the US response to China’s unfair trade practices related to the forced transfer of American technology and intellectual property”.

The list of products covers around 1,100 separate US tariff lines valued at approximately $50 billion in 2018 trade values. It generally focuses on products from industrial sectors that contribute to or benefit from the ‘Made in China 2025’ industrial policy, which include industries such as aerospace, information and communications technology, robotics, industrial machinery, new materials, and automobiles, USTR said.

USTR said list of products consists of two sets of US tariff lines: The first set contains 818 lines of the original 1,333 lines that were included on the proposed list published on April 6. These lines cover approximately $34 billion worth of imports from China.

USTR said it had determined to impose an additional duty of 25% on these 818 product lines after having sought and received views from the public and advice from the appropriate trade advisory committees. Customs and Border Protection will begin to collect the additional duties on 6 July.

The second set contains 284 proposed tariff lines identified by the interagency Section 301 Committee as benefiting from Chinese industrial policies, including the ‘Made in China 2025’ industrial policy. These 284 lines, which cover approximately $16 billion worth of imports from China, will undergo further review in a public notice and comment process, including a public hearing. After completion of this process, USTR will issue a final determination on the products from this list that would be subject to the additional duties.

And yesterday, US president Donald Trump threatened to impose tariffs on another $200bn worth of Chinese goods, adding fuel to the fears about a looming full-scale trade war between the world’s two largest economies. Trump has requested the US Trade Representative to draw up a list of Chinese imports to hit with a 10% duty.

“After the legal process is complete, these tariffs will go into effect if China refuses to change its practices, and also if it insists on going forward with the new tariffs that it has recently announced,” the president said.

The move came after Beijing announced its 25% tariff on $50bn of US goods last Friday, responding in “equal scale” to Washington’s earlier hike in customer duty on Chinese products.

Will Waters | Wednesday, 20 June 2018

Shippers voice concerns over latest US-China tariffs

CBP will begin to collect duties from 6 July on 818 additional product lines covering $34bn worth of imports from PRC

Representatives of US retail importers have voiced their concerns about the impact of the latest US-China tariffs after the US last Friday said it would go ahead with new 25% taxes on $50 billion of Chinese imports.

Despite an agreement last month to suspend planned punitive tariffs against one another after achieving “meaningful progress” towards a new trade framework, the Office of the United States Trade Representative (USTR) last Friday released a list of products imported from China that it said would be “subject to additional tariffs as part of the US response to China’s unfair trade practices related to the forced transfer of American technology and intellectual property”.

US Customs and Border Protection will begin to collect the additional duties on 6 July on 818 lines of the original 1,333 lines that were included on the proposed list published on 6 April. These lines cover approximately $34 billion worth of imports from China, USTR said.

US president Donald Trump reportedly also said the US would impose another $100bn of Chinese imports if Beijing “engages in retaliatory measures, such as imposing new tariffs on US goods, services, or agricultural products; raising non-tariff barriers or taking punitive actions against US exporters or US companies operating in China”.

As reported today in Lloyd’s Loading List, China has published its own list of threatened tariffs on $50bn in US goods, including soyabeans, aircraft and autos, threatening it would hit back if Washington followed up with further measures. And now Washington has completed a second list of possible tariffs on another $100bn in Chinese goods, in the expectation that China will respond to the initial US tariff list in kind, sources told Reuters.

The Guardian said China’s commerce ministry said China did not wish to have a trade war, “but the Chinese side has no choice but to strongly oppose this. We will immediately introduce tariff measures of the same scale and strength. All the results from the negotiations previously reached by the two parties will be invalid.”

It added: “It is deeply regrettable that in disregard of the consensus between the two sides, the US has demonstrated flip-flops and ignited a trade war.”

National Retail Federation (NRF) president and CEO Matthew Shay said tariffs are taxes on American consumers, noting: “These tariffs won’t reduce or eliminate China’s abusive trade practices, but they will strain the budgets of working families by raising consumer prices.

“Tax reform has encouraged US companies to expand and invest in their workforces and unleashed the strongest levels of consumer confidence in a generation. Unfortunately, these tariffs and the retaliation China has promised put all this economic progress at risk. Once again, we urge the administration to change course and develop a clear and comprehensive strategy to hold China accountable.”

A study commissioned by NRF and the Consumer Technology Association found that tariffs on $50 billion of Chinese imports, coupled with the impact of retaliation, would lead to four job losses for every job gained and reduce US gross domestic product by nearly $3 billion.

NRF testified before the Office of the US Trade Representative during a hearing last month to share the retail industry’s concerns over tariffs.

USTR explained on Friday that president Trump had stated on 29 May that USTR would announce by 15 June “the imposition of an additional duty of 25% on approximately $50 billion worth of Chinese imports containing industrially significant technologies, including those related to China’s ‘Made in China 2025’ industrial policy. Today’s action comes after an exhaustive Section 301 investigation in which USTR found that China’s acts, policies and practices related to technology transfer, intellectual property, and innovation are unreasonable and discriminatory, and burden US commerce.”

The list of products issued last week covers around 1,100 separate US tariff lines valued at approximately $50 billion in 2018 trade values. It generally focuses on products from industrial sectors that contribute to or benefit from the ‘Made in China 2025’ industrial policy, which include industries such as aerospace, information and communications technology, robotics, industrial machinery, new materials, and automobiles, USTR said.

USTR said list of products consists of two sets of US tariff lines: The first set contains 818 lines of the original 1,333 lines that were included on the proposed list published on April 6. These lines cover approximately $34 billion worth of imports from China.

USTR said it had determined to impose an additional duty of 25% on these 818 product lines after having sought and received views from the public and advice from the appropriate trade advisory committees. Customs and Border Protection will begin to collect the additional duties on 6 July.

The second set contains 284 proposed tariff lines identified by the interagency Section 301 Committee as benefiting from Chinese industrial policies, including the ‘Made in China 2025’ industrial policy. These 284 lines, which cover approximately $16 billion worth of imports from China, will undergo further review in a public notice and comment process, including a public hearing. After completion of this process, USTR will issue a final determination on the products from this list that would be subject to the additional duties.

USTR said it “recognizes that some US companies may have an interest in importing items from China that are covered by the additional duties. Accordingly, USTR will soon provide an opportunity for the public to request the exclusion of particular products from the additional duties subject to this action. USTR will issue a notice in the Federal Register with details regarding this process within the next few weeks.”

Source: https://www.lloydsloadinglist.com

Will Waters | Monday, 18 June 2018

Season of Australian orange exports to China about to kick off

"Bleak finish for Egyptian orange import season"

China has entered the final week for the selection and packaging of late-season oranges. The 2017 orange production season has come to an end. At the same time, US oranges, Egyptian oranges, and Spanish oranges are all entering the final stage of their production seasons. The overall condition of the Chinese orange market during the last production season was depressed. The market condition was similarly disastrous for imported Egyptian oranges. Most importers suffered losses from the beginning of the production season until the very end. Only the quality of late-season Spanish oranges was relatively good and had some potential for profit.

Australia and South Africa have begun to select and package oranges for the upcoming, scorching hot Chinese summer. Mr. Xie Jinshan, CEO of the Shenzhen GoldAnda Agricultural Technology Development Co., Ltd. (hereafter GoldAnda) recently visited Nippys farms in Australia and the Gogo farms in South Africa. He stated that Australian orange production has slightly decreased this year, but the fruit size is slightly larger than last year. A larger share of the production volume meets the requirement for export to China. The taste and sweetness is also better than last year.

The production volume of South African oranges increased, but the fruit size is slightly smaller than last year. The area recently suffered from hail and other extreme weather conditions, but this only had limited influence on the overall production volume.

GoldAnda is a global leader in orange retail. They annually sell more than 1000 shipping containers full of oranges. GoldAnda has developed a strong cooperation with Australian Nippys in recent years. Together they have worked hard to make Nippys the number one Australian orange brand in China. At the same time, GoldAnda developed a good working relation with high-end South African brand Gogo. Their import volume has increased by 30%. Australian and South African oranges are already underway to Chinese ports and will soon arrive.

Xie Jinshan - CEO
GoldAnda
Shenzhen GoldAnda Agricultural Technology Development Co., Ltd.
Website: www.goldanda.com
Telephone number: +86 755 2515 4488
E-mail address: goldanda@goldanda.com

Publication date: 6/7/2018
Source: www.freshplaza.com

'It's like a licence to print money' — Citrus industry urges Government to help preserve China trade

The citrus industry has called on the Federal Government to not "trip up" their trade with China, as Australian orange and mandarin growers enjoy the best prices in years.
Citrus Australia chief executive Nathan Hancock said the industry was experiencing boom times, with growers getting twice to three times as much for their fruit as they were five years ago.

The citrus harvest started in early May and this season demand is expected to outstrip supply, largely due to increasing exports to China.

China accounted for almost a quarter of the total 273,000 tonnes of citrus fruit exported last year.

"In 2013 we were close to zero export tonnes to China … In 2017, we exceeded 70,000 tonnes to China," Mr Hancock said.

But Mr Hancock was concerned about the fragility of the current world order, and Australia's relationship with our most lucrative trading partner.

"I'm not the only one in industry who is nervous about that," Mr Hancock said.

"We can't do anything much about those political machinations except to say to our government we don't want them tripping things up."

Mr Hancock said the industry's peak body, Citrus Australia, along with growers and packers had put "a lot of work" into supplying China's needs.

'It's like a licence to print money'
The on-farm protocols the Chinese government demanded, primarily to prevent pests and diseases, had been difficult to enact but the hard work has paid off.

Of the 25,000 hectares of citrus trees planted across the growing regions of Queensland, the Northern Territory, New South Wales, Victoria, South Australia and Western Australia, 9,200 hectares have been registered for export to China.

Second generation fruit grower John Hederics at Trentham, near Mildura, said one variety of pink-fleshed navel orange was particularly popular.

"It's like a licence to print money," he said.

The pink navel, which looks like any other orange from the outside, can fetch as much as $1,300 a tonne, Mr Hederics said.

"China's been a big change for us in the last four years with that market opening up and the demand for our fruit, they really love our fruit, especially the pink navels," he said.

"The Australian dollar has been good to us the last couple of years, it has really made a difference to the profitability of us growing citrus and exporting it."

Close view of a man's hands holding hald a pink navel orange, with a knife sliding into a section of fruit
PHOTO: Grower John Hederics says pink navels can fetch as much as $1,300 a tonne. (ABC News: Prue Adams)
Mr Hederics grows 130 hectares of citrus on his property adjacent to the Murray River, and he is clearing more land to expand the orchards to 350 hectares over the next three years; he wants to increase his production of seedless mandarins and pink-fleshed navels.

"It's a big investment," he said.

"You can't just plant a tree and harvest it next year — you've got to wait five to seven years to come into full production, so it's a real gamble guessing the varieties and what you should be doing."

Mr Hederics is one of the Mildura Fruit Company's (MFC) 130 contracted growers.

MFC is the country's biggest single supplier to the China market — accounting for about one third of the overall citrus trade.

MFC general manager Perry Hill said the Mildura-based packing plant first shipped fruit to China in 2011, after the export trade to the United States collapsed.

"Going back ten or more years ago, the biggest market for the premium grade fruit was the US," Mr Hill said.

"That diminished because of the likes of South Africa and Chile pushing a lot of fruit into that market, so all of a sudden we couldn't get the premium prices we were looking for, so we turned our mind elsewhere."

Source: http://www.abc.net.au

Author: Prue Adams

Australian stone fruit producers taking advantage of new improved Chinese protocols

New protocols, and an improved growing season has helped the imports of Australian stone fruit into the Chinese supply chain increase 167 per cent in volume, compared to last year.

Summerfruit Australia says the figures, as of March 2018, recognise the addition of peaches and plums for the first time, after the industry gained access for all categories of stone fruit from November 2017, adding to nectarines, which started supply the year prior.

"Due to our protocol conditions and current limitations, our industry quickly seized on the new access for peaches and plums," CEO of Summerfruit Australia John Moore said. "Apricots are a very delicate fruit and will need more protocol improvements to successfully deliver first class quality to Chinese consumers. With nectarines in the second year of access, there was a significant increase in exports due to a much improved growing season over 2016/17."

He adds that the late announcement in 2017 for access of peaches, plums and apricots was very much welcomed, by both Australian producers and Chinese customers.

"Detailed surveillance of the key Chinese markets - Guangzhou, Shanghai and Beijing - heard positive feedback of quality, price points and consumer satisfaction for eating quality across the spectrum of nectarines, both yellow and white flesh; peaches both yellow and white flesh; and the spectrum of plums, inclusive of sugar plums," Mr Moore said. "The Australian Summerfruit sent to China this season re-established our distinguishing quality factor, eating characteristics and freshness over southern competitors.”

Summerfruit Australia's General Manager for Intellectual Property and Business Development Rowan Little says overall the season was an improvement in terms of timing and fruit quality on the year prior. Early fruit was almost two weeks earlier than the year prior which proved a good introduction into the season.

"I think the general consensus was that peaches were in heavy supply which resulted in some low grower returns," Mr Little said. "Nectarines were in good supply but not in over production. Plums were a little lighter than the previous season while Apricots returns were overall slightly lower."

The main challenge from a quality perspective was early season frosts in most districts and a few hail events which primarily affected the Cobram district. Other than that a few rain events had impacts at various times but overall the summer growing season was good.

However, Mr Little says domestic demand was relatively flat, but flavour and fruit size remain the primary drivers of domestic consumer demand.

"Nectarines continue to dominate the Australian domestic market in terms of volume of sales," he said. "In this space, yellow nectarines are also preferred over white. Sales were strongest for nectarines through January. During this period demand off shore for large white nectarines was also strong though grower returns were only average. Nectarines performed much better in China than the year prior with better fruit flavour driving demand and increased volume. Formal access for Plums and Peaches was not granted until mid-season, but with the benefit of a full season of access in 2018/19 this situation is expected to improve."

For more information:
Summerfruit Australia
Phone: +61 2 6041 6641
ceo@summerfruit.com.au
www.summerfruit.com.au

Publication date: 5/28/2018
Author: Matthew Russell
Copyright: www.freshplaza.com

Costa scoops Aus-China business award

Leading Australian group recognised for pioneering investment in Chinese agriculture at AustCham Westpac Business Awards


Costa Group, Australia’s leading horticulture company, was announced as the winner of the Business Excellence Award for Agriculture, Food & Beverage at the 25th Annual AustCham Westpac Australia-China Business Awards on Thursday night in Shanghai.

Peter McPherson, general manager of Costa’s international business, accepted the award on behalf of Costa and told the assembled audience of local and international dignitaries that it was a great honour to be recognised with such a prestigious accolade.

“The footprint Costa has established in China working together with Driscoll’s has taken a lot of hard work,” said McPherson. “Most importantly this has involved a commitment to work cooperatively and harmoniously with local stakeholders, including government officials, our employees and local villagers.”

The award recognised the agronomic practices Costa has brought to China, including its world-leading blueberry intellectual property and substrate growing methods, according to a media statement from Costa. Such ground-breaking moves have not only been a game changer for the way berries are grown in China, but also for the way agriculture is conducted in general, the group noted.

“Importantly, the award is also a recognition of how Costa has worked with all local stakeholders in helping to realise their commitment to agricultural policies and practices that improve economic development by creating jobs in agriculture, have a positive environmental impact and benefit the greater social good,” said McPherson.

McPherson also flagged the great work Costa’s local employees had done to establish three farms in Yunnan Province, and their willingness to learn and apply new skills.

Costa’s investment in China is one of the largest made by a foreign-owned company in Chinese agriculture in recent years, according to the media statement. Key factors underpinning the investment include: introducing world leading high-tech growing and management systems; recognition of key national agricultural policies focusing on sustainable production; improvement in the economic and social well-being of the local population; strong and harmonious working relationships with local authorities; and implementation of safe and healthy work practices. 


Earlier this week, McPherson also spoke on the horticultural potential of Yunnan Province, and Costa’s investments in this region of southwest China, at Fresh Produce Forum China, China’s leading fresh produce conference event, which took place at the inaugural edition of China Fruit Logistica in Shanghai on 14-16 May.

The AustCham Westpac Australia-China Business Awards recognise the success of Australian and Chinese businesses in China across a broad spectrum, from small entrepreneurs to large publicly listed companies. Besides agriculture, food and beverage, the awards are given in a range of other sectors including: business innovation and the digital economy; construction and infrastructure; consumer services; cross-border investment; professional and business services; and sustainability, diversity and social responsibility.

The awards evening formed part of the Australia-China business week, which concludes with an Australian Rules (AFL) football match to be played in Shanghai between Port Adelaide and Gold Coast Suns on Saturday (19 May). The match at Jiangwan Stadium will be attended by Australian Trade and Tourism Minister Steve Ciobo.

Source: http://www.fruitnet.com/asiafruit

Author: John Hey

E-retail, not e-commerce: China’s fast-changing online market for fresh fruit

In China the question isn’t whether you sell online but how. In the fruit trade it pays to understand the nuances of various e-commerce platforms, so much so that Frutacloud CEO George Liu believes ‘e-retail’ is a better term for the phenomenon which is sweeping its way towards 20% penetration in the fresh produce market.

“If you do business in China you have to use WeChat,” said Liu early on in his presentation at the Global Cherry Summit in Chile last week.

For the experienced China hands Liu was merely stating the obvious but for others his comment was likely a wake-up call to get accounts with the service, which is like Facebook meets Whatsapp with a digital payment element as well.

And in modern China digital payments have become the norm. Liu highlighted there were now 731 million Chinese citizens on the internet, which is more than the United States and India combined. Of these people, 70% make regular payments online.

“And with many of these Chinese internet users, they first went online through their mobile phones,” Liu said.

“A lot of these people don’t have email accounts. So we call these people mobile digital natives – they conduct their daily lives through mobile apps.

“It is very common in China that the small merchant will only accept digital payments.”

He said this evolution meant shopping habits could be tracked, analyzed and charted.

“This gives a huge advantage to those people who hold the data. Here’s another thing for consideration – the national disposable income growth has been increasing every year,” he said.

“Some of you may have heard that GDP growth is slowing down in China, but I think this [disposable income growth] is a better indication of the overall growth in China.”

Liu pointed to a 9% growth rate in the national resident disposable income level last year, up from 8.4% growth in 2016.

“Such high growth of income is what you would call the consumption upgrade,” he said.

“Consumption upgrade means that Chinese people with money now want to buy better food, they want to buy imported product instead of domestic, and they want to buy fresh fruit instead of mass-produced junk food.

“This is wonderful for the Chilean cherry industry.”

The disposable income growth measure also helps for understanding opportunities in the interior. It is now common knowledge that fruit exporters need to break through the first tier cities, but Liu made a deeper argument than the sheer business case.

“The disposable income here is rising faster compared to the first tier cities, and the housing cost is more affordable so people have more money to spend on other items,” he said.

“In the past one of the obstacles in developing market share was the lack of cold chain logistics, but now many players including us are investing heavily in the distribution network.

And while in the first tier cities of Beijing, Tianjin, Shanghai, Guangzhou and Shenzhen there are around 78 million people, Liu emphasized the population in second tier cities was around 236 million.

A brief summary of China’s e-retail platforms

Liu broke down China’s e-retail market into four broad categories that have evolved over time. The original of these is ‘comprehensive e-commerce’, dominated by Alibaba’s Tmall.com and Tencent’s JD.com.

Both these companies incidentally own or have connections to various alternative e-retail platforms as well as conventional retail, with notable examples being Tencent’s partnership with Walmart in China as well as investments in Fruitday.

“However I think this type of [comprehensive] e-commerce is getting very saturated. Growth has slowed down and also the delivery and packaging costs for this type of e-commerce, especially for fresh fruits, are very high,” Liu said.

He said these services tended to use third-party providers like DHL, with the cost of using a box, a bag and including ice packs making up approximately 30% of the final selling price.

The second category is known as ‘vertical fresh produce’, involving players like Benlai, Fruitday and Missfresh which “don’t sell anything else except fresh product”.

“Usually they build their own logistics system to deliver better fruit to the customer,” Liu said.

Vertical integration requires heavy investment in cold chain logistics and warehousing, according to Liu, so players in this space tend to focus on specific geographies, such as Missfresh in the north and Fruitday in Shanghai.

“They’re facing similar challenges including high building costs, high packing costs so a lot of them are diversifying through acquisition in traditional retail, or they invent something new like a self-service kiosk,” he said.

The third type of platform is ‘fresh specialty O2O’, which stands for online-to-offline.

“Here there are two leaders. Pagoda and Xianfeng combined have about 4,000 stores in China. These stores are small and close to residential areas, so in such close proximity they can deliver fruit to their customer within an hour,” he said.

Liu described the final category as ‘new retail’, including such outfits as Hema, 7Fresh and Super Species.

“This was started only three years ago by Hema Fresh, which is also owned by Alibaba, and this is no doubt the hottest and most competitive retail space in China,” he said.

“I think there are three key aspects that differentiate new retail from the regular supermarket – first these stores are built from the ground up to support online development.

“They often have a unified imagery management system and some mechanism to support fast pick-up from within the store. Second of all they place a big focus on fresh product and shopping experience. Fresh produce will usually account for more than half of the floor space.”

But in Liu’s view the most important aspect of new retail is that you can only make digital payments, and the experience serves as a hook for mobile digital natives.

“Together with all the data they have about you they can give you the most personalized suggestions,” he said.

“The eventual goal for all the ‘new retail’ is for you to first experience in store but then for the repeat purchase to go through your mobile phone.

“You place an order on your mobile app and somebody in the store will pick up all your products, put it in a little bag, and it will be transported to one of these guys on a bike or a motorbike outside to deliver to you.”

Liu said the model required a lot of capital investment, which is why most of the players involved are large companies.

“In the U.S. people have heard big news about Amazon buying Whole Foods but this has happened on a much bigger scale in China.”

www.freshfruitportal.com

Costa Group recognized for efforts in China

Costa Group has been announced as a finalist in the prestigious 25th Annual AustCham Westpac Australia-China Business Awards.

Nominated for the Business Excellence Award for Agriculture, Food & Beverage, Costa has been recognised for its operations in China with its focus on the development of large scale berry fruit (blueberries, raspberries, blackberries) farms in Honghe and Xishuangbanna Yunnan Province.

Costa’s investment to date represents one of the largest by a foreign owned company in Chinese agriculture in recent years with land secured for further expansion as demand in the market grows.

Costa was nominated for the award due to the success of its agricultural developments in China based on a number of key factors including:
The introduction of high tech growing and management systems
Recognition of key national agricultural policies focusing on sustainable production and improvement in the economic and social well-being of the local population
A strong and harmonious working relationship with local authorities
Implementation of safe and healthy work practices


Paul Lai, Westpac’s Regional Head and Head of Corporate & Institutional Banking Greater China said, “Given its size and incredible pace of transformation, it’s fantastic to see these Australian businesses that have worked hard to get their China strategy right, reaping the rewards and propelling their business forward.”

The presentation of the 25th Annual AustCham Westpac Australia-China Business Awards is to be made at a Gala Dinner in Shanghai on Thursday 17th May.

For more information:
Costa Group
Business Support Centre
275 Robinsons Road, Ravenhall
VIC 3023
T: 03 8363 9000
info@costagroup.com.au
www.costagroup.com.au

Publication date: 4/23/2018

 

Source: www.freshplaza.com

Image from http://costagroup.com.au