Food & Agribusiness Talking Points | 05/01/2017

food-agribusinessIn today’s talking points: China takes advantage of ChAFTA with Australian Agribusiness; Australian hay exports destined for China’s dairy industry; A Leading Grocer chain sells is shares to an E-commerce Firm; Government Promises to Improve Food Production.


China takes advantage of ChAFTA with Australian Agribusiness

Since the implementation of the China-Australia Free-Trade Agreement, the number of Australian mangoes, cherries and abalone being shipped over to China has doubled, with the exports of table grapes increasing six-fold. As Australia loses it’s reliance on the previously dominant wheat, beef and wool industries, smaller markets such as avocados, almonds and aquaculture have flourished with the new demand for quality high value, counter-seasonal produce across the globe. Many niche markets are now becoming mainstream horticulture, with significant growth in fields such as Western Australian black truffles expected for the future.

Read More at: The Australian

Australian hay exports destined for the China’s dairy industry

Over the last three years, Australia exports of hay to China have risen from 30,000 tonnes to an estimated 220,000 tonnes. In previous years, China has sought to import only the top-quality hay, but since the fall in global milk prices, lower grade fodder has been in high demand. Farmers brought in big yields in 2016, but a cooler than average season provided a longer curing process, which meant much of the produce did not meet export standards. This has left a lot of stock in an the domestic market where demand is not strong. While figures have not yet been released, the market is still set for a record one million tonnes of Australian hay exports for 2016.

Read More at: The Weekly Times

A Leading Grocer chain sells is shares to an E-commerce Firm

Yonghui Superstores Co. Ltd. Announced it had agreed to transfer the entirety of its shares in Lianhua Supermarket Holding Co. Ltd. To Shanghai Yiguo E-Commerce Co. Ltd.
Since April 2015, Yonghui was the second largest shareholder of Lianhua, involving itself in helping to improve Lianhua’s branch-level retail management. However Lianhua has been steadily losing money, and in 2016 it lost 188 million yuan.
According to Hong Tao, analyst at GF securities, e-commerce in china is one of the greatest competitors for supermarkets.  ‘Supermarkets in general are being influenced by e-commerce’, said Hong.
The failure of e-commerce firms to make significant inroads into the fresh-food sectore has seen online shopping giants come offline. Deals such as’s physical store, and Alibaba Group Holding Ltd.’s recent investments into the Sanjiang Shopping Club are indicative of this trend.

Read more at: Caixin

Government Promises to Improve Food Production

China’s top leaders have promised to improve the quality of agricultural production and for future development to be more environmentally sustainable. The government has called for the agricultural industry to shift away from a system that focuses on quantity and pivot toward a system that prioritises quality.
Agriculture minister, Han Changfu, expressed that ‘our country has a lot of average-quality agricultural produce, but not enough top-quality and branded products.’ He added that as consumers develop a finer taste for agricultural products that there exists a growing demand to cut excess production in certain crops and focus more on upgrading quality.
In particular, the government will reduce the production of corn. The Agriculture Ministry set a goal to cut corn production by about 4.9 million acres of farmland and it aimed to increase the cut to 6.6 million in 2017.

Read more at: Caixin