FRUIT IN CHINA - A MARKET ANALYSIS

TABLE OF CONTNETS

CHINA CONTACT I

CONTENTS II

INTRODUCTION 1

• Report Coverage 1
• Executive Summary 2
• Other Related Reports in the China Contact Series 4
• Free Monthly Online Newsletters 5

1 CHINA's FOOD MARKET 6

• 1.1 Overview 6
• 1.2 China's Total Food Market 7
  • 1.2.1 Total Food Market: Food and Non-food Sales 7
  • Table 1.1 TOTAL CURRENT VALUE RETAIL SALES BY FOOD AND NON-FOOD IN CHINA, 1996-2002 7
  • 1.2.2 Total Food Market: Food/Non-food Sales Split 7
  • Table 1.2 PERCENTAGE BREAKDOWN OF SALES BY FOOD AND NON-FOOD IN CHINA, 1996-2002 7
  • 1.2.3 Total Food Market: Urban and Rural Split 8
  • Table 1.3 TOTAL CURRENT VALUE RETAIL SALES BY FOOD AND NON-FOOD IN CHINA, 1996-2002 8
  • 1.2.4 Total Food Market: Total Value Trends 9
  • Table 1.4 CURRENT VALUE OF FOOD SALES BY MAJOR PRODUCT CATEGORY IN CHINA, 1996-2002 9
  • 1.2.5 Total Food Market: Urban Value Trends 10
  • Table 1.5 URBAN FOOD SALES VALUE BY MAJOR PRODUCT CATEGORY IN CHINA, 1996-2002 10
  • 1.2.6 Total Food Market: Rural Value Trends 11
  • Table 1.6 VALUE OF RURAL FOOD SALES BY MAJOR PRODUCT CATEGORY IN CHINA, 1996-2002 11
• 1.3 China's Fresh Fruit Market 12
  • 1.3.1 Total Fresh Fruit Market: Total Market Size 12
  • Table 1.7 MARKET VALUE SALES OF FRESH FRUIT BY MAJOR SECTOR IN CHINA, 1996-2002 12
  • 1.3.2 Total Fresh Fruit Market: Value Sector Shares 13
  • Table 1.8 PERCENTAGE BREAKDOWN OF VALUE SALES OF FRESH FRUIT BY MAJOR SECTOR IN CHINA, 1996-2002 13
  • 1.3.3 Total Fresh Fruit Market: Value Growth Rates 13
  • Table 1.9 % ANNUAL GROWTH FOR VALUE SALES OF FRESH FRUIT BY MAJOR SECTOR IN CHINA, 1996-2002 14
  • 1.3.4 Total Fresh Fruit Market: Sector Volumes 14
  • Table 1.10 MARKET VOLUME SALES OF FRESH FRUIT BY MAJOR SECTOR IN CHINA, 1996-2002 14
  • 1.3.5 Total Fresh Fruit Market: Volume Sector Shares 15
  • Table 1.11 PERCENTAGE BREAKDOWN OF VOLUME SALES OF FRESH FRUIT BY MAJOR SECTOR IN CHINA, 1996-2002 ...15
  • 1.3.6 Total Fresh Fruit Market: Volume Sector Shares ...15
  • Table 1.12 % ANNUAL GROWTH FOR VOLUME SALES OF FRESH FRUIT BY MAJOR SECTOR IN CHINA, 1996-200215
• 1.4 China's Canned Fruit Market 16
  • 1.4.1 Total Canned Fruit Market: Total Market Size ..16
  • Table 1.13 MARKET FOR CANNED FRUIT BY VALUE & VOLUME TERMS IN CHINA, 1996-200216
  • 1.4.2 Total Canned Fruit Market: Subsector Breakdown 17
  • Table 1.14 PERCENTAGE BREAKDOWN OF CANNED FRUIT BY VALUE & VOLUME TERMS IN CHINA, 1996-2002 ...17
  • 1.4.3 Total Canned Fruit Market: Growth Rates 17
  • Table 1.15 % ANNUAL GROWTH FOR CANNED FRUIT BY VALUE & VOLUME TERMS IN CHINA, 1996-2002...17
• 1.5 Prices 18
  • 1.5.1 Prices: Retail Price Indices..18
  • Table 1.16 RETAIL PRICE INDICES BY BROAD SECTOR IN CHINA, 1996-2002 19
  • 1.5.2 Prices: Average Fresh Fruit Current Unit Prices 20
  • Table 1.17 AVERAGE FRESH FRUIT RETAIL CURRENT PRICES BY MAJOR SECTOR IN CHINA, 1996-2002.20
  • 1.5.3 Prices: Average Fresh Fruit Constant Unit Prices...20
  • Table 1.18 AVERAGE FRESH FRUIT RETAIL CONSTANT PRICES BY SECTOR IN CHINA, 1996-2002....20
  • 1.5.4 Prices: Average Canned Fruit Unit Values ....21
  • Table 1.19 AVERAGE CANNED FRUIT RETAIL PRICES IN CHINA, 1996-2002.21
  • 1.5.5 Prices: Selected Canned Fruit Retail Prices ...21
  • Table 1.20 SELECTED CANNED FRUIT PRICES IN BEIJING AND SHANGHAI 2003 21
• 1.6 Outlook . 22
  • 1.6.1 Outlook: Forecast Trends....22
  • 1.6.2 Outlook: Fresh Fruit Sector Values ..22
  • Table 1.21 FORECAST VALUE SALES OF FRESH FRUIT BY MAJOR SECTOR IN CHINA, 2003-2007....22
  • Table 1.22 FORECAST PERCENTAGE BREAKDOWN OF FRESH FRUIT SALES BY MAJOR SECTOR IN CHINA, 2003-2007 ..23
  • Table 1.23 FORECAST ANNUAL GROWTH OF FRESH FRUIT SALES BY MAJOR SECTOR IN CHINA, 2003-200723
  • 1.6.3 Outlook: Fresh Fruit Sector Volumes ...24
  • Table 1.24 FORECAST VOLUME SALES OF FRESH FRUIT BY MAJOR SECTOR IN CHINA, 2003-2007....24
  • Table 1.25 FORECAST PERCENTAGE BREAKDOWN OF FRESH FRUIT VOLUME SALES BY MAJOR SECTOR IN CHINA, 2003-2007 ..24
  • 1.6.4 Outlook: Canned Fruit Sector Values & Volumes..25
  • Table 1.26 FORECAST SALES OF CANNED FRUIT BY VALUE & VOLUME TERMS IN CHINA, 2003-2007...25
  • 1.6.5 Outlook: Canned Fruit Sector Value & Volume Breakdown....25
  • Table 1.27 FORECAST PERCENTAGE BREAKDOWN OF CANNED FRUIT BY VALUE & VOLUME TERMS IN CHINA, 2003-2007..25
  • 1.6.6 Outlook: Canned Fruit Sector Value & Volume Growth 26
  • Table 1.28 FORECAST ANNUAL GROWTH OF CANNED FRUIT IN CHINA, 2003-2007 26
• 1.7 China's Agricultural Policy 27
  • 1.7.1 Agricultural Policy: Background .27
  • 1.7.2 Agricultural Policy: Problems in Commercialisation..28
  • 1.7.3 Agricultural Policy: Institutional and Production Policies ...29
  • - Household Production Responsibility System....29
  • - Development of Rural Industry ....30
  • - Governor's Grain-Bag Responsibility System....31
  • - Mayorsf Responsibility System....31
  • 1.7.4 Agricultural Policy:
  • - Domestic and Market Price Policy ..32
  • - Procurement Price Policies ..33
  • - Procurement Contract System..33
  • - Reduction in Government Procurement Quotas .34
  • - Elimination of Fixed Procurement Prices ..34
  • - Elimination of Urban Grain-rationing System....34
  • - Price Support Programme....35
  • - Grain Distribution Reform...35
  • 1.7.5 Agricultural Policy: Agricultural Trade Policy Instruments 37
  • - State Trading.37 Tariffs and value-added tax.37
  • - Import and Export Licensing....38
  • - Foreign Grain Trade Management ....38
  • 1.7.6 Agricultural Policy: Input Policy .40
  • - Chemical Fertilisers ....40
  • - Water....40
  • 1.7.7 Agricultural Policy: Outlook....42
  • - Macro-economy .42
  • - Trends in Food Demand..43
  • - Agricultural Resources and Technology....43
  • - World Trade Organisation (WTO) ....43
• 1.8 Current Issues.... 44
  • 1.8.1 Current Issues: Food Safety44
  • 1.8.2 Current Issues: Organic Production..45
  • 1.8.3 Current Issues: Genetically Modified (GM) Food..46

2 MARKETING AND DISTRIBUTION. 48

• 2.1 Marketing .. 48
  • 2.1.1 Marketing: Trends .48
  • 2.1.2 Marketing: Consumer Profile ..49
  • Table 2.1 ATTRIBUTES INFLUENCING FOOD PURCHASE IN SHANGHAI, 2000.51
• 2.2 Distribution.... 52
  • 2.2.1 Distribution: Free (Wet) Markets.52
  • - Initial Development ....52
  • - Four-tier Distribution System ..53
  • - Wholesale Markets.53
  • - Types of Free Market .54
  • - Market Fees and Turnover Taxes .54
  • Table 2.2 TYPICAL BREAKDOWN OF FREE MARKET RETAIL SALES BY PRODUCT TYPE IN CHINA, 2001 55
  • 2.2.2 Distribution: Retail Sales by Outlet..55
  • Table 2.3 PERCENTAGE BREAKDOWN OF FRUIT VALUE SALES BY OUTLET TYPE IN CHINA, 1996-2002..56

3 SOURCES OF SUPPLY. 57

• 3.1 Total Fruit Production.... 57
  • 3.1.1 Production Sector Breakdown: Sector Volumes 57
  • Table 3.1 PRODUCTION OF FRUIT BY MAJOR SECTOR IN CHINA, 1995-200160
  • 3.1.2 Production Sector Breakdown: Utilisation by Retail Trade 60
  • Table 3.2 PERCENTAGE OF FRUIT VOLUME PRODUCTION USAGE BY CONSUMPTION CHANNEL IN CHINA, 1995-2001 60
• 3.2 International Trade 61
  • - Agricultural and Trade Policy 61
  • - Tariff Reductions 64
  • - Recent Trade Statistics 64
  • Table 3.3 IMPORT AND EXPORT OF MAJOR FRUITS IN CHINA, 2001* 65
  • "Fake" Produce 65

4 SWOT ANALYSIS 66

• 4.1 Strengths 66
• 4.2 Weaknesses 66
• 4.3 Opportunities 67
• 4.4 Threats 67

5 CONTACTS 68

• 5.1 Trade Organisations 68
  • 5.1.1 China National Cereals, Oils & Foodstuffs Import & Export Corporation 68
  • 5.1.2 All-China Federation of Industry & Commerce 68
  • 5.1.3 China Canned Food Industry Association 68
• 5.2 Government Departments 69
  • 5.2.1 Agriculture Ministry 69

6 RELEVANT EXHIBITIONS & TRADE FAIRS 70

• 6.1 International Packing, Printing, Food Processing & Packaging & Plastic Machinery Fair (Hangzhou) 70
• 6.2 Tianjin Exhibition on Food Machinery & Packing 70
• 6.3 Trade Show of Machinery for Print, Packaging, Plastic Products & Food 70
• 6.4 Food Ingredients & Food Ingredients Asia 70
• 6.5 Agro-Foodtech 70
• 6.6 SIAL China 70
• 6.7 International Fast Food Products Exhibition 71
• 6.8 Zhengzhou Sugar, Alcoholic Drink & Food Trade Show 71
• 6.9 Guangzhou Exhibition on Machinery for Food, Packaging, Printing & Plastics 71
• 6.10 China Northeast International Exhibition on Food, subsidiary Material, Processing Technology & Equipment 71
• 6.11 International Exhibition For Food & Drink South China 71
• 6.12 International Exhibition For Hotel & Bakery South China 71
• 6.13 International Quick Frozen Food Exhibition 72
• 6.14 Beijing National Food & Food Processing Machine & Packaging Machinery Show 72
• 6.15 Food China 72
• 6.16 International Food, Packaging, Print, Plastic Products Exhibition 72
• 6.17 Zhejiang Food & Drink Summer Sales Show 72
• 6.18 Dalian International Food Manufacturing & Packaging Machine Exhibition/Dalian International Food, Raw Materials & Food Additives Show 72
• 6.19 Shanghai International Food Machine & Package Machine Expo 73
• 6.20 China International Fair For Food, Food Processing & Packaging 73
• 6.21 Shanghai International Supermarket Expo 73
• 6.22 Shanghai International Food Expo 73
• 6.23 Packtech & Foodtech 73
• 6.24 Liaoning Food Show 74
• 6.25 Food & Hotel South China 74
• 6.26 Chengdu International Food , Food Processing & Packaging Show 74
• 6.27 International Food Show 74
• 6.28 Interfood Shanghai 74
• 6.29 International Food Processing & Packaging Machinery Exhibition 74
• 6.30 China Food Industry Exhibition 75

APPENDIX - MARKET BACKGROUND 76

• A.1 Fast Facts 76
• A.2 Regions of China 77
  • Map A.1 CHINA: PROVINCES AND MUNICIPALITIES 77
• A.3 Demographics 79
  • A.3.1 Demographics: Total Population 79
  • Table 1.1 TOTAL POPULATION, 1996 2002 79
  • A.3.2 Demographics: Population by Location 79
  • Table A.2 POPULATION BY URBAN-RURAL DIVIDE, 1996 2002 80
  • A.3.3 Demographics: Population Breakdown by Location 80
  • Table A.3 POPULATION BREAKDOWN BY URBAN-RURAL DIVIDE, 1996 2002
  • A.3.4 Demographics: Population by Province 81
  • Table A.4 POPULATION BY PROVINCE, 1999-2002 81
  • A.3.5 Demographics: Population Density by Province 82
  • Table A.5 POPULATION DENSITY BY PROVINCE, 1999-2002 82
  • A.3.6 Demographics: Population Concentration 82
  • Map A.2 POPULATION CONCENTRATIONS BY PROVINCE, 2002 83
  • A.3.7 Demographics: Population by Gender 83
  • Table A.6 TOTAL POPULATION BREAKDOWN BY GENDER, 1996 2002 84
  • A.3.8 Demographics: Population by Age Group 84
  • Table A.7 POPULATION BY AGE GROUP, 1996 2000 84
  • Table A.8 POPULATION BY AGE GROUP (PERCENTAGE), 1996 2002 85
• A.4 Consumer Attitudes 86
  • A.4.1 Consumer Attitudes: Overview 86
  • A.4.2 Consumer Attitudes: Response to Political Change 86
  • A.4.2 Consumer Attitudes: Response to Economic Change 87
  • A.4.3 Consumer Attitudes: Changes in Lifestyle 88
  • - Livelihood 88
  • - Individual loans 88
  • - Housing 88
  • - Possessions 89
  • - Travel 90
  • - Entertainment 90
  • - Health and Fitness 91
  • - Purchasing Influences 92
  • - Taboos 93
• A.5 Consumer Wealth 94
  • A.5.1 Consumer Wealth: GDP and Cost of Living 94
  • - Dealing with WTO 94
  • - Confident Shoppers 95
  • Table A.9 GDP AND COST OF LIVING INDEX, 1996 2002* 95
  • A.5.2 Consumer Wealth: Provincial Differences in GDP 96
  • Table A.10 GDP RANKED BY PROVINCE, 1996 2002* 97
  • A.5.3 Consumer Wealth: GDP Growth by Province 97
  • Table A.11 GDP GROWTH RANKED BY PROVINCE, 1996 2002* 98
  • A.5.4 Consumer Wealth: GDP Per Capita by Province 98
  • Table A.12 PER CAPITA GDP RANKED BY PROVINCE, 1999-2002 99
  • A.5.5 Consumer Wealth: Concentration of Wealth by Province 99
  • Map A.3 VALUE OF GDP PER CAPITA BY PROVINCE, 2002 100
  • A.5.6 Consumer Wealth: The Major Cities 100
  • Table A.13 LEADING CITIES KEY ECONOMIC INDICATORS, 2002 101
• A.6 Households 102
  • A.6.1 Households: Overview of Household Conditions 102
  • A.6.2 Households: Total Households by Size 102
  • Table A.14 NUMBER OF HOUSEHOLDS BY SIZE, 1996 2002 103
  • A.6.3 Households: Total households by Urban/Rural Split 103
  • Table A.15 NUMBER AND SIZE OF HOUSEHOLDS BY LOCATION, 1996 2002
  • A.6.4 Households: Income Earners Per Household 104
  • Table A.16 AVERAGE NUMBER OF INCOME EARNERS PER HOUSEHOLD,1996 2002 104
• A.7 Employment 105
  • A.7.1 Employment: Number of Workers by Sector 105
  • Table A.17 NATIONAL EMPLOYMENT BY SECTOR, 1996 2002 105
  • A.7.2 Employment: Growth by Sector 105
  • Table A.18 GROWTH IN EMPLOYMENT BY SECTOR, 1996 2002 106
  • A.7.3 Employment: Number of Workers by Gender.106
  • Table A.19 TOTAL NATIONAL WORKFORCE BY GENDER, 1996 2002..106
  • A.7.3 Employment: Number of Workers by Habitation 107
  • Table A.20 NATIONAL WORKFORCE BY HABITATION, 1996 2002...107
  • A.7.4 Employment: Urban Unemployment .107
  • Table A.21 URBAN UNEMPLOYMENT RATES, 1996 2002..108
• A.8 Consumer Income ....109
  • A.8.1 Consumer Income: Average Incomes by Sector..109
  • Table A.22 AVERAGE INCOMES BY SECTOR, 1996 2002...109
  • A.8.2 Consumer Income: Growth by Sector109
  • Table A.23 GROWTH IN AVERAGE INCOMES BY SECTOR, 1996 2002 .110
  • A.8.3 Consumer Income: Average Incomes by Region.110
  • Table A.24 AVERAGE INCOMES BY REGION, 1998 2002 ...111
  • A.8.4 Consumer Income: Growth by Region....111
  • Table A.25 GROWTH IN AVERAGE INCOMES BY REGION, 1998 2002 .112
• A.9 Consumer Market....113
  • A.9.1 Consumer Market: Spending Trends..113
  • Table A.26 CONSUMER EXPENDITURE* BY BROAD SECTOR AT CURRENT PRICES, 1996-2002..113
  • A.9.2 Consumer Market: Per Capita Consumer Expenditure .113
  • Table A.27 PER CAPITA CONSUMER EXPENDITURE* BY BROAD SECTOR AT CURRENT PRICES, 1996 2002....114
  • A.9.3 Consumer Market: Retail Sales and Consumer Spending.114
  • Table A.28 RETAIL SALES AS A PROPORTION OF CONSUMER EXPENDITURE, 1996 2002 114
  • A.9.4 Consumer Market: Urban Income and Spending Compared .114
  • Table A.29 URBAN AVERAGE ANNUAL INCOME/EXPENDITURE, 1996 2002 115
  • A.9.5 Consumer Market: Average Urban Weekly Shopping Basket....116
  • Chart A.1 AVERAGE WEEKLY URBAN SHOPPING BASKET, 2002116
  • A.9.6 Consumer Market: Average Rural Weekly Shopping Basket117
  • Chart A.2 AVERAGE WEEKLY RURAL SHOPPING BASKET, 2002.117
  • A.9.7 Consumer Market: Average Urban & Rural Weekly Shopping Baskets Compared..118
  • Chart A.3 URBAN & RURAL SHOPPING BASKETS COMPARED, 2002 ...118
• A.10 Exchange Rates..119 A.10.1 Exchange Rates: China...119
  • Table A.30 AVERAGE ANNUAL EXCHANGE RATES, 1997 2002 ....119
  • A.10.2 Exchange Rates: Hong Kong...119
  • Table A.31 AVERAGE ANNUAL EXCHANGE RATES, 1997 2002 ....119