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French fries in China – big opportunities and high hurdles

The market for French fries in China is growing rapidly but barriers to entry exist for foreign providers, as Peter Peverelli of explains.

The potato, a staple of many European nations, has traditionally only had a supporting role in Chinese cuisine. It is known as tudou (literally: ‘earth bean’) in colloquial Chinese, or malingshu (‘horse bell tuber’) in formal texts. These names indicate that potatoes used to be seen as a vegetable in Chinese cooking. In north-west China (Shanxi, Inner Mongolia), where the potato is indigenous, chunks of potato are added to stews.

The Chinese potato output for the marketing year 2019/20 is estimated at 98m metric tonnes, according to the US Department of Agriculture. Interest in potatoes in China increased considerably, when, in 2015, the Chinese government launched the plan to make the potato the nation’s fifth staple food, after rice, wheat, soy beans and maize. However, it has so far not significantly affected potato production.

Only 10% of the output is further processed into (semi) finished products. In recent years, China’s rapidly-changing eating habits have resulted in a booming fast-food industry. Chinese consumers, especially those in urban areas, have accepted Western-style fast-food restaurants that serve French fries and other popular side dishes as a way of life in China.

China’s frozen French fries production in the market year 2019/20 is forecast at 310,000 metric tonnes, a 10% increase from 2018/19 as a result of increased fresh potato production.

The country imports the majority of its frozen French fries from the US. However, due to the additional tariffs Beijing has levied on many US agricultural products amid the ongoing trade tension between the two nations, the share of US companies in the Chinese market fell from 64% in 2016/17 to 53% in 2018/19.

As a result, forecasts for 2019/20 have China’s imports of frozen French fries decreasing by 10%, to 129,000 metric tonnes. The next largest suppliers, Belgium, Turkey and the Netherlands, together accounted for 40% of China’s imports of frozen French fries, according to the USDA.

Read the full article by here

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Lukie Pieterse, Editor and Publisher

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