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Business / Industries

LatAm views China as future of agricultural exports

(Xinhua) Updated: 2016-03-22 16:32

MEXICO CITY - Latin America is seeking to put more of its fruit, vegetables and meat on Chinese dining tables as the Asian country continues to unleash its domestic consumption potential.

The region's agricultural exports are dominated by soybeans, but the growing purchasing power of China's middle class and the Chinese people's changing diet are beginning to make a difference.

Chinese shop shelves today feature Mexican avocados, while tequila is gaining market shares there, Mexico's Agriculture Minister Jose Calzada told Xinhua in a recent interview, predicting tequila sales to China will reach $100 million in a little over five years.

The demand for avocados is also growing by leaps and bounds, said Calzada.

"Avocado exports to China will likely rise by 100 percent or 150 percent a year over the next five years. That's the pace (of growth) that avocado exports to China are going to have," said the minister.

For now, Mexico's agricultural exports to China are only worth about $160 million, a fraction of the country's $25 billion in annual agroindustrial exports.

But as Chinese consumers develop a taste for increasingly available imported goods, Mexico finds itself well on the road to diversifying its basket of exports, composed mainly of cotton, seafood, avocados and tequila.

"I am certain that over the coming years (our exports) will rise notably," said Calzada, adding "many Mexican producers place high hopes on China and other Asian markets in general."

The Organization for Economic Cooperation and Development (OECD) recently recommended Latin America to diversify its exports by moving beyond raw materials and looking to meet the needs of China's growing middle class, which could represent close to 1 billion people in the next 20 years.

Latin America has an abundance of natural resources and could become a principal source of high-quality foodstuffs for the Asian giant, which already imports close to $122 billion of food a year, said the OECD.

Carlos Furche, Chile's Agriculture Minister, told Xinhua his country clearly understands China's transformation and is aiming to make it the main destination for Chilean food exports in the next decade.

"China has become the third-largest market for Chilean food exports and is the fastest growing one. In all probability, in five to 10 years, China will become the largest market for Chilean food exports," said Furche.

A decade ago, when Chile and China signed a free-trade agreement, foodstuffs were barely discussed as exports were focused on copper, of which Chile is the world's leading producer.

Now, food exports to China have reached over $2.5 billion a year, said Furche.

"Everything indicates that the demand for food in China is going to continue to grow, mainly because of its significant national development strategies," said Furche.

China has recently announced key policy changes, including promoting economic growth by stimulating stronger domestic consumption and scrapping its one-child policy.

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