Opinion: the future of blueberries in China
By Álvaro Aspée, Chilean agricultural attaché to China - Beijing
China is a very attractive market for fruit exports, given the growing importance of fruit in the population's diet.
From the total value of fruits imported to China in 2011, 16% was bananas, 13% grapes, 13% longan, 9% durian, 8% dragon fruit, 7% cherries, 5% apples. In all of this, Chile ranked second among fruit exporters to China with 18% participation and 78.5% growth from the previous year. Chile is outranked by Thailand and followed by the United States, the Philippines and Vietnam.
It should be noted that not all fruits can enter China and authorities do not accept imports from just anywhere. Fruit entry into China has sanitary barriers that require work to allow the product.
Opening the market for new fruits is an intense job and demanding on resources. It requires the exporter to determine phytosanitary conditions and then negotiate logistical and health standards. In the case of fruits already approved for Chile, the authorized countries vary depending on this process, but the country has come out in a top position.
Blueberries in China
After more than two years of technical studies and negotiations with Chinese health authorities, a protocol was signed to allow the entry of fresh Chilean blueberries in June 2011 during a visit by Chinese Vice President Xi Jinping.
Work began on the agreement's implementation, which required a bilateral meeting between the Chilean Ministry of Agriculture (SAG) and the Chinese General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), alongside two Chinese inspectors for the first shipments.
Exports recently began in mid-January 2012, reaching US$1.5 million in just three months. This has motivated other countries to join in. Canada, the United States and Argentina have requested an opening into this market.
Local industry executives are optimistic about the blueberry's future in China. Among other advantages, there is a freerade agreement, imports can be made during important holidays like Chinese New Year, arrivals come during the counterseason and there is increasing urbanization with over 200 cities of more than one million inhabitants. China also has significant growth in purchasing power with a growing middle class, and a public concerned with its health, safety and product traceability, complemented by local scandals that favor imported fruits.
The latter creates important opportunities for the Chilean offering, especially in terms of product visibility and consumer education. Information related to the local crop is limited, however, in great part due to the absence of sector representation and a lack of statistics.
With available information from interviews with Chinese industry executives, we can determine that the outlook is good for Chilean exports. For 2011, wild and cultivated blueberry production in China is estimated at 10,000 and 4,000 tons (MT), respectively.
The total area of cultivated blueberries is estimated at 6,700 hectares, with 16% of the area and 40% of the volume concentrated in the four biggest companies, Wallen, Jie Cheng, Wang Min Chang Fu and Bei Lai Te. New Chinese actors are entering the industry, which has become very profitable compared to other crops. The industry is in an adjustment process, however, since many have come onto the market with varieties inappropriate for China, as indicated by industry executives.
The main blueberry producers are found in Shandong (25% of cultivated area), Liaoning (22%), Jilin (10%), Zhejiang, Jiangsu, Sichuan, Guizhou, Yunnan and Heilongjiang. The final region is characterized by wild blueberries.
With currently announced investments, blueberry production is hoped to reach 50,000MT by 2016. The blueberry harvest season in China starts in mid-April and lasts until the end of July, extending until August 20 in the case of wild varieties from Heilongjiang.
North Korea was the main supplier of imported blueberries to continental China until recently. Imports have fallen sharply, however, due to competition from growing Chinese plantations, commercial doubts and questionable North Korean production standards, where most crops are wild.
For cultivated blueberries, harvesting is done mainly by hand.
Each season, between 50% and 70% goes to the fresh fruit market and 30% to 50% goes for processing, most of which is frozen. Afterward, the fruit goes through two marketing channels, direct and indirect.
The direct channel goes to products like jams, juices, dried fruit and wine. In the indirect channel, jams, juices and dried fruit go to the growing dairy and baked goods industries.
The main determinants of consumption are health, nutrition and importation, rather than taste or price.
Per capita consumption in main cities like Beijing, Guangzhou and Shanghai is estimated at 46 grams and 7 grams throughout China. In comparison, per capita consumption in the U.S. and Canada is 770 and 2,531, respectively. Total 2011 consumption is estimated at 10,000 MT, 4,000 of which were fresh.
Demonstrating the appeal of the sector, many real estate companies are investing in the market. At the same time, companies with clear food industry strategies are getting involved.
Among them, the business Legend Holdings stands out. The agricultural attaché visited Chile with the company in March. The business stands out in the IT sector as the owner of Lenovo.
In 2010, it decided to enter the food sector with an investment in 500 Ha of kiwifruit. A few weeks ago, the company acquired 60% of Wallen, a leading blueberry producer and importer with 600 planted Ha. The purchase stresses the market role of this fruit in the Chinese population.