Increasing Chinese fresh produce production will have an impact on world markets, but internal consumption means that the main export potential in the short-term might lie with vegetables.

Deborah Perkins, of Rabobank International, said that the increase in production of fruit and vegetables is in line with increased demand, as the consumer pocket gets deeper and tastes widen. “Consumption [changes] are a combination of population and income growth, so the fact that production of fruit and vegetables is rising at a faster rate than population growth worldwide is healthy,” she said.

In 2004, China produced 50 per cent (855 million tonnes) of the world’s vegetables and 15 per cent (497mt) of the world’s fruit. “China has inherent labour-cost advantages, but remains inefficient,” Perkins, pictured, said. “It is the 89th most efficient fruit producer in the world and 46th on the list of vegetable producing nations, so there is substantial supply chain infrastructure potential.”

Land allocated to horticulture in China is still on the rise and productivity will increase as the Chinese industry begins to integrate the processes and technology it is importing from overseas. “China exports just two per cent of its production, but that is enough to have a major impact on global trade patterns,” she said. “Any increase in vegetable volumes will be for the export markets as internal consumption is decreasing. Fruit export potential is more doubtful, as consumption in China is rising rapidly. China does produce 55 per cent of the world’s pears and 35 per cent of its apples, but in some fruit varieties it will be less of an export threat, and in fact an export opportunity for growers elsewhere.”

But as markets become more important to China, everyone else will face more intense competition. Perkins used the Japanese broccoli market as an example. China has only recently entered the previously US dominated space, and has already built a 25 per cent share. Prices per kilo have dropped by more than 30 per cent in the last five years, and she said this trend will manifest itself in other markets.

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