China food industry set to grow 20 per cent

- Last updated on GMT

Related tags: Industry

China's food industry grew by 26.2 per cent in the first six months
of this year. And despite rising power and ingredients prices, The
China National Food Industry Association says that continued
economic strength, backed by strong food sales should mean that the
industry will achieve year-on-year growth of 20 per cent.

"The food sector generated an industrial value of 869.89 billion yuan (US$104.8 billion) in the first seven months of this year, contributing nearly 10 per cent to the country's total industry,"​ Wang Wenzhe, president of the China National Food Industry Association, told a press conference.

Wang backed his forecast up by stating that figures from the National Bureau of Statistics showed that food firms had recorded sales up 28.3 per cent for the first half of the year, to RMB 838.1 billion (€82 billion).

The good performance for the sector had also been attributable to the government's aims to boost the country's agriculture sector, which has had a significant impact on this year's harvests. On top of that government support and funding has encouraged food manufacturers to expand their operations.

The good news has come in a year when the industry has been unnerved by a series of food poisoning outbreaks, including a fake baby food scandal which affected Eastern provinces and led to the deaths of as many as 200 babies. Added to that manufacturers have been hit by rising costs attributed to both global grain prices and power prices, which in turn has led to steep increases in food prices; but economists say that this has been offset by incomes rising in line with inflation.

However, the rapid rise of the China food industry has not been enough to curb a sharp rise in food imports, which, according to customs officials have risen by over 50 per cent in the first six months of the year to reach $11.47 billion. Likewise food exports rose 7.7 per cent during the period to reach $10.7 billion, reflecting the fact that, despite the growth, China's food manufacturers have been unable keep up with demands.

Related topics: Business, East Asia, Industry growth, China

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