May 15, 2014
Australia eyes share of premium pork exports to China
With a burgeoning middle class, China represents a huge opportunity for premium Australian pork exports, according to Australian Pork Limited (APL) chief executive officer Andrew Spencer, North Queensland Register reports.
Spencer was one of 700 Australian business representatives in the high level trade delegation, led by Trade Minister Andrew Robb and Prime Minister Tony Abbott that attended the Australia Week in China event early last month.
The delegation visited five major cities - Beijing, Shanghai, Guangzhou, Chengdu and Hong Kong - to explore opportunities ahead of potentially signing a free trade agreement between the two countries by the end of this year.
Spencer said the China tour showed him the extraordinary opportunity that exists for Australian top end pork products in the fast growing market.
"I've been going to China for the past 20 years, every two or three years, and the change in the place and the things that they've been able to achieve, are just remarkable."
"And with that wealth generation and demand for high quality food, there's clearly a major food opportunity for the future."
According to Austrade, China is Australia's largest trading partner with two-way trade reaching US$122 billion last year.
But Minister Robb said the focus of China's economy is moving away from export and investment towards domestic consumption of "an exploding middle class".
Spencer said China already produced about half of the world's pork, whereas Australia produces about a mere one third of a percent of the world's total.
He said China's pork production capacity was "enormous" and therefore Australia could never hope to be a significant volume provider.
That is why APL is aiming to win an ultra premium market segment comprising wealthy consumers and high-end food service providers, he added. Any share of that premium market would be a significant volume and potentially huge earner for Australian pork production.
Spencer said a key point to the trade negotiations was China being "acutely aware of food safety issues".
"The Chinese people, especially at the wealthier end, are extremely sensitive to food safety issues because they've had some real disasters, not only with pork products but with the melamine in milk scandal and the use of illegal hormone growth promotants," he said.
Spencer said China recognised Australia as a "fantastic market for healthy, natural and safe food and pork is no different".