January 2013
Produced by the Canadian Trade Commissioner Service
Agriculture and Agri-Food Sector Profile
- Shanghai, China
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1. Sector Overview
The East China region (municipality of Shanghai, provinces of Jiangsu, Zhejiang, Anhui and Hubei) is an
important gateway to the mainland China market, and is already a major importer of Canadian agrifood
products. Approximately a third of Canadian exports to China enter the country through the port of
Shanghai. This includes Canada's top 10 agricultural products exported to China, such as grain and
oilseeds, meats, fish/seafood, edible oils, wine/Icewine/beverages and other processed food. Demand
has grown at more than 10 per cent every year for more than a decade. Fast development in
transportation infrastructures and logistics facilities combined to raising incomes and rapid urbanization
contribute to increase the attractiveness of several second tier cities in this region. Indeed, cities like
Ningbo, Hangzhou, Nanjing, Suzhou, Wenzhou and Wuhan are becoming more and more interesting in
terms of market for imported foods.
Shanghai
With a GDP growth of 8.2% in 2011, a population of 23 million and a per capita GDP exceeding
$12,000, Shanghai is an important market for processed food and beverage products in China. Five of
ten largest supermarket companies in China are headquartered in Shanghai (Bailian, Carrefour, Metro,
RT Mart and Aushan). According to the “2010 Shanghai Retail Market Report”, four ales products were
meat, wine and beverage, dairy and confectionery.
In 2010, imported agrifood products entering China through Shanghai were valued at U$2.565 billion,
an increase of 37.2% over 2009. According to Shanghai Customs statistics, France was the largest
exporters of food products to China in 2009 with U$555 million worth of foods export going through
Shanghai. New Zealand was number #2 with U$453 million, Singapore number #3 while Canada was
number #20.
2010 Major Products/Countries Exported to China through Shanghai
Food Category
Major Export Countries
Source: Shanghai Import Food Enterprise Association
Dairy Products
New Zealand, Singapore, Australia, USA
Wine & Liquor
France, UK
Beverage & Water
France, Italy, USA
Vegetable & Fruit
USA, Australia, Brazil
Chocolate & Candy
Japan, USA, EU
Refrigerated Drink
USA, Brazil, Israel
Biscuit & Cookies
Denmark, Italy, Japan
Seasoning
Japan, EU
Sugar
Korea, USA
Nutraceuticals and Health Food
USA
Canned Food
EU
Preserved Fruit
Japan, Thailand
Dried Nut
USA, Italy
Shanghai with its vibrant hospitality industry, its established business communities and retail system,
its different cuisines from all over the world and its adventurous consumers enjoying a relatively high
purchasing power represents significant opportunities for Canada. In 2011, 38 companies based in
Shanghai and Nanjing imported on a regular basis processed agrifood, beverage and seafood products
from Canada (compared to 37 in 2010 and 34 in 2009).
Provinces of Jiangsu, Zhejiang, Anhui and Hubei
The East China provinces provide excellent opportunities for agricultural technologies including farming,
animal genetics and food processing. Jiangsu province is a large producer of swine, poultry and aquatic
products. It is also an important producer of rice, wheat and oilseeds. Zhejiang province is a major
producer of grain, tea, fruit, silk, flower and organic food. Anhui province is the third largest oilseed
producer in China, and its Huaibei Plaines is the largest beef farming area in East China. Hubei province
is one of the seven largest swine producers in China and its second-largest oilseed producer. Hubei is
also a gateway to the central China market. Local governments of these provinces have emphasized
the development of local agricultural infrastructures and production technologies, and have invested
significantly to introduce advanced farming and management skills as well as food processing
technologies in their agricultural development plans. In addition to agri commodities such peas and
malting barley, Canada's advanced technologies for food processing, lean-meat swine and highperformance dairy genetics have great potential in this region.
2. Market and Sector Challenges (Strengths and Weaknesses)
International competition is fierce in the East China market. For instance, the US which has been
present in the market for a long time already offer a wide range of agrifood products. They also have a
number of industry associations with representatives in the region to promote products and/or to build
brand awareness. Other countries, such as France (wine and dairy), Australia (beef and fruit juice),
New Zealand (dairy and nutraceuticals), United Kingdom (confectionery and beverage), Japan (snack
food and packaging design) and Italy (wine and olive oil) are also very active.
As food safety remains an issue in China, consumers are becoming more y willing to pay more for food
that perceived as safe and healthier. As Canadian food products in China are recognized as safe,
healthy and clean, Canada stands to benefit from its positive reputation in China. That being said, at
the consumer level, Canada lacks brand recognition for certain food products. Creating brand
awareness in China for Canadian agrifood products has become increasingly important as Canadian
food and beverage products are perceived as expensive while most of the food brands are not well
known. Compared to other international and Chinese domestic brands in the local market, and without
proper segmentation or differentiation, Canadian products are sometimes not as price-competitive as
products imported from other countries.
Opportunities for Canada:
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Processed food and beverage products including Icewine
Canola and other vegetable oils
Meat and dairy products
Swine/dairy genetics, agricultural equipment, farming and food processing technologies
The following strategic approaches are suggested to Canadian exporters:
1. Work closely with the Canadian Trade Commissioner Service, both in Canada and in China.
2. Use Agriculture and AgriFood Canada (AAFC)'s Brand Canada images and materials in
promotional activities to take advantage of of the good reputation enjoyed by the Canadian
brand “Product of Canada” and advantages.
3. Be innovative and flexible. In other words, products should be new (including packaging design)
and competitive in China, and welcomed by the consumers.
4. Having presence in China - an office or a reliable local business partner that can communicate
with customers and support marketing, after-sale service and new market development.
5. Think long term. The China market represents tremendous opportunities but also fierce
competition. Canadian companies need to have a long-term strategy, and try to learn and
understand the business culture in China.
3. Sub-Sector Identification
Meat Products
Pork, poultry and beef are the three main sources of animal protein in China. For many years, the ratio
of meat consumption in Shanghai has been 60% pork, 30% poultry and 10% beef. As pork is very
important in the Chinese diet, the population and the government are sensitive to its price. Total
demand for pork in Shanghai is about 10 million heads per year. However, the local pork industry can
only supply about 30% of the demand. The remaining 70% needs to be sourced from other provinces
in China or imported from overseas including from Canada. Fresh-chilled pork (under 4 degree C) and
lean pork meat is more popular than frozen pork meat. Price of some pork offal's, such as the kidney,
heart and stomach could be higher than pork meat. China imports certain quantity of frozen pork for
reserve purpose.
China's regulations imposes zero tolerance on residue of ractopamine in pork, beef and other meat
products. After having been banned since 2003, Canadian beef (deboned derived from animals under
thirty months of age) has re-gain access to the China market in 2011. As the local importers,
distributors and consumers trusted the Canadian beef and the reliability of Canada's food safety
system, this should help recover Canada's market share once Canadian beef becomes again readily
available in the Chinese market. Poultry including turkey meat has a good potential in China too, but
Canada needs to renew a valid trade protocol for poultry with China.
Wine & Beverages
China's wine industry produced 1.09 billion litres in 2010, an increase of 12% over 2009. Annual
growth for imported wine in China is 30%. Within 3 to 5 years, the wine market in China is expected to
expand to a point where domestic and imported wines have an equal market share. By 2013, China
should become the 6th largest wine consumer market in the world with Shanghai probably being the
most promising market for wine in China.
There is a high demand in Shanghai for imported wine and beverage products. The consumers
understand and appreciate the health benefits of grape wine and fruit-based beverage products. In
2011, Shanghai reported 35% increase of wine sales with the main foreign suppliers being France,
Italy, Australia, US and Germany.
VQA Canadian Icewine enjoys an excellent reputation in Shanghai and other major cities in China.
Canada's total export of Icewine was $12 million in 2010, of which $3.64 million was to China, an
increase of 81% over 2009.
Packaged Food and Organic Products
Market for packaged food is developing rapidly in Shanghai and major second-tier cities of East China.
The main outlets are supermarkets, hypermarkets and special gift shops. Over the last 30 years,
China's imported food and beverage distribution networks have grown considerably. This benefits a
large number of national and private importers, exporters, agents and distributors who can do business
more efficiently. While in the past Chinese consumers paid primarily attention to the price habits are
changing and the consumers now pay also attention to considerations such as quality, safety, nutrition,
taste, packaging and brand awareness. In the retail sector, imported meat products, dairy products
(especially the infant formula), confectionery products (especially chocolates and cookies with
attractive packaging) and bottled water originated from a reliable source are well perceived by local
consumers.
In Shanghai and other cities, some retail outlets, such as Carrefour, Metro, Taste, CitySuper and City
Shop, have organic food or “green” food section in stores. The organic and “green” food products
currently available in these stores are fruits, vegetables and grains, sourced from Chinese producers or
imported mainly from Japan and Korea.
Agricultual Commodities and Technologies
Since 2009, China has restricted imports of Canadian canola seed due to the presence of blackleg in
canola and rapeseed. The memorandum of understanding on joint canola research recently signed by
the Canadian and Chinese government in Beijing is part of an ongoing strategy to achieve a stable
trading environment with China for Canadian canola seed, and to work towards a long-term solution.
Currently, canola oil does not face access issues in China and the demand is actually quite strong
Canola and soybean meals gradually become known as a good source of protein for feed. In addition,
the fast-growing brewery industry in East China creates a demand for high-quality malting barley
imported from overseas.
As swine and dairy are two of the most important industries in the four provinces of East China, these
provinces all need good genetic products, management skills and animal disease control/prevention
technologies from the world. Most Chinese swine and dairy farms have their own feed mills, and they
usually prefer to co-operate with international firms that can offer an investment package for cooperation. Demand for potash and safe use of pesticides and fertilizers is also increasing in the four
provinces of East China.
Canadian Government Contacts
Consulate General of Canada in Shanghai
Email: [email protected]
Website: www.shanghai.gc.ca
Agriculture & AgriFood Canada
Website: www.agr.gc.ca
Foreign Affairs and International Trade Canada
Website: www.tradecommissioner.gc.ca
Useful Internet Sites
Please note that the majority of links are offered in the language of origin.
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Shanghai Import FoodEnterprise Association
Shanghai Cuisine Association
Shanghai Municipal Agriculture Commission
Shanghai Entry-Exit Inspection & Quarantine Bureau
Jiangsu Provincial Agriculture Commission
Zhejiang Provincial Department of Agriculture
Anhui Provincial Agriculture Commission
Hubei Provincial Department of Agriculture
China State General Administration for Quality Supervision, Inspection and Quarantine
China State Food and Drug Administration
China Food Industry Association
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China Meat Association
China Ministry of Agriculture
[1] The Government of Canada has prepared this report based on primary and secondary sources of
information. Readers should take note that the Government of Canada does not guarantee the accuracy
of any of the information contained in this report, nor does it necessarily endorse the organizations listed
herein. Readers should independently verify the accuracy and reliability of the information.