Western Producer staff
The assignment: You are to address a gathering of food and agricultural producers and exporters.
How can you tell if they are listening?
A helpful hint: Drop the word “China” into your speech and if eyes do not light up around the room, audience members either are asleep or have expired.
China and its potential as a market has become the Holy Grail for food salesmen the world over. The reasons are obvious. The population is 1.1 billion and growing. The economy is expanding and an urban middle class is emerging with a taste for western habits.
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Last week, it was Canadian beef exporters who took notice.
“The potential is enormous, just from the population numbers,” Lydia Chan, Honk Kong representative for the Canada Beef Export Association, said at an association meeting.
As the Canadian beef industry aims to increase exports six-fold to Asia within five years, China is a prime target for growth.
The grain industry harbors the same dreams.
Traders and sellers, including the Canadian Wheat Board, salivate as they contemplate growth in what is now the largest single overseas market for grain.
Lester Brown from the WorldWatch Institute in Washington has predicted China’s future food needs could suck all of the world’s surplus out of the market and still not be enough. He says this is a formula for instability, social and political unrest and starvation.
Traders wonder what his problem is. For them, China’s growing openness and prosperity represents the greatest marketing opportunity in history.
This is an optimistic prospect for a trading nation like Canada, with a 35-year history of food sales to China.
However, before China becomes firmly entrenched in the public mind as an answer to any future food trade problems, a bit of sobering reality might help temper that unbridled enthusiasm.
Canada, of course, has many competitors in that market and they are competitors with advantages.
Japan, Australia and New Zealand all are closer and have a long history of trade relations.The United States, as the world’s largest food trader, already is well established there and has the political and economic might to blast its way further into those markets if it chooses.
And assumptions of uninterrupted growth in and liberalization of the Chinese economy seem a bit premature, even though they are key to the dollar signs dancing before traders’ eyes.
China’s history of periodic upheavals alone should be enough to temper western assumptions of steady and explosive growth.
After all, not much more than a decade ago, Canadians had little doubt the Soviet Union would remain one of the primary markets for Canadian food products.
The enthusiasm for the Chinese market is infectious and based on some real trends. But Canadian farmers and food traders would do well to remember that using current conditions and assumptions to predict future political and economic conditions is at best a mug’s game.
