News Content

Food scares, growing middle class boosts China's grain imports

CHINA's appetite for higher quality products that would sustain consumption of protein-rich farm commodities is increasing due to a string of food safety scandals.

China is toughening its fight against food safety violators in the face of rising incidents of food scares since a deadly scandal in 2008 when dairy tainted with industrial chemical melamine led to the deaths of at least six infants.

It is also prompting the country, the world's top importer of soybeans and a major buyer of corn, to move from backyard hog farms to mechanised modern plants requiring higher volumes of grain-based compound feeds, reported Reuters.

"The Chinese population has become highly sensitised to food safety and rightly so," said Cargill vice chairman of commodities trading Paul Conway. "For commodities which go into direct human consumption or via meat, we don't see a slowdown in China."

A growing middle-class that craves high-protein and safe food products would also ensure China's consumption of agricultural commodities would remain high even as economic growth slows to six to seven per cent.

"We are positive not only on China but on the region generally about the emergence of a stronger and more vibrant middle class who demand more variety and better quality in their food," Mr Conway said.

China's shift to a consumption-driven economic expansion and away from infrastructure that could see rapid growth in its environment, healthcare and education sectors will also require more higher quality food, said Mr Conway.

With sales of US$134.9 billion in fiscal 2014, Cargill expects its global grain business to double in seven to eight years with Asia growing at twice the pace, supported by thriving consumption in China, India and Indonesia, he said.