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Beside the export of traditional agricultural products like spice and sugar, Indian companies can now look forward to supplying high-quality foodstuff to China, with consumers there becoming more quality conscious.
“Indian companies can scout for business opportunities in China,” said Ping Chew, Asia head for food & agricultural research at Rabo Bank, in an interview to Business Standard. “Following the increasing demand due to safety concerns among Chinese consumers, producers/ distributors there are looking for outsourcing safer and quality products and also tying up with foreign companies.”
E-commerce there has grown to 10 per cent of retail sales. Last year, China’s per capita income was $7,500 per annum; measured by purchasing power parity, it was $13,000-14,000. Despite a slowing economy, consumption remains a main driver. Higher disposable income has also has made consumers more choosy about quality, safety and protein rich products. Chew said, “Several incidences of issues emerging in food safety were reported in China.” This is another reason why more Chinese companies source good brands, mainly from the US and Europe.
China’s economy is now expected to grow at six to seven per cent annually till it stabilises, “a new normal for the economy”, said Ping. He foresees further consolidation in China’s food and agriculture sector. It will increase import of soybean and feedgrain. At the downstream side, e-commerce will continue to play a big role. “There are enormous opportunities in China for foreigners to invest or tie-up with local companies, and Indian companies can look forward for such opportunities,” said Ping. Products in this regard include high-value dairy, cashew, processed seafood, basmati rice and sesame seeds.
