Chalk to cheese: China’s massive import growth shows changing tastes
Between January and October 2014, China imported 56,028 tonnes of cheese—not a huge amount by world standards, but already almost 10,000 tonnes more than the entire previous year’s total.
Moreover, this growth is likely to continue as increasingly affluent Chinese consumers look towards western tastes.
Baidu.com, China’s most popular internet search engine, has reported a 60% increase in searches for the word “cheese” over the last three years, while pizza, cheesy baked sweet potatoes and baked broccoli with cheese are becoming ever more popular.
FTAs kicking in
The main beneficiaries of China’s newly-acquired taste for cheese so far have been New Zealand, Australia and the US, with Europe’s cheesemakers trailing far behind, says Guangzhou-based business analyst CCM.
Volume of cheese exports to China (tonnes)
Value of cheese exports to China (US$)
Source: China Customs; Range: January-October 2014
New Zealand, with its established beneficial tariff system, remains China’s preferred source of cheese, with imports from New Zealand between January and October 2014 totalling 24,013 tonnes, a 44% increase over the same period in 2013.
However, Australia is catching up fast. Its total cheese exports to China rose 78% year on year to 15,189 tonnes, and its exports are likely to be boosted further in 2015—again thanks to a recently signed China-Australia free-trade agreement.
Imports from the US also increased, rising 27% year-on-year to 10,084 tonnes; though the US has now fallen decisively behind its Australasian rivals.
New Zealand, one of the world’s dairy giants, now exports more than twice as much cheese to China than the US, and the gap between Australia and the US widened from 593 tonnes in 2013 to 5,105 tonnes in 2014.
Meanwhile, China is steadily developing a taste for European cheeses, having seen imports from France, Italy, Denmark, Germany and the Netherlands each rise by at least one-quarter over the last year, though in absolute terms this is a drop in the ocean.
The total volume of imports from the top five European nations added up to just 4,696 tonnes, less than one-fifth of the amount imported from New Zealand.
Europe’s relatively poor performance could be due to the fact that much of the demand in China is currently for food service and processed cheese, whereas many European cheese makers focus on higher-value products for retail.
China is currently importing cheese from the US, New Zealand and Australia at an average of US$4.71 per kilo, US$5.10 and US$4.69 respectively, compared to US$8.14 from France, US$8.27 from Italy and US$8.51 from Denmark. This suggests that European suppliers are currently focusing on higher-quality retail products.
In addition, US and Australasian suppliers hold strategic advantages over their European competitors. In addition to New Zealand and Australia’s free-trade agreements, the country benefits from superior market access due to lower freight costs from the two countries, along with west coast US suppliers.