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Argentina seeks a bigger share of China’s organic market

Post available in: English

From pears to honey, producers of organic products hope existing demand for healthy food will be consolidated after the coronavirus

Organic producers reject GM seeds, chemical fertilisers, and agrochemicals, according to Ricardo Parra of Argentina’s Las Quinas beekeeping company in Argentina. Hard to believe, then, that a country like Argentina that used 500 million litres of agrochemicals last year would have a flourishing organic food sector.

But Argentine organic produce is now featuring more prominently in international markets and its companies are now targeting Chinese consumers, more so amid the coronavirus pandemic. With people at home due to lockdowns, there’s been a growing appetite for healthier meals as well as more time to cook.

“The pandemic is changing global food habits, with more people now convinced of the need to eat healthier food, making organics a good fit,” said Parra. “With most restaurants closed, consumers are getting more selective with what they eat at home. We have a favourable view of the future.”

Argentina, organic power

Argentina exported 166,000 tonnes of organic produce in 2018, according to government data. The US and EU are the main export destinations, although analysts estimate that total exports could be twice that because US control authorities use different classifications to Argentina’s.

166,000 tonnes of organic produce exported by Argentina in 2018

Pears, wheat, cane sugar, apples, soybeans, cider, wine, apple sauce, rice, wool and honey are the most widely sold Argentine organic products.

“Argentina’s organic production has the highest levels of quality, equivalent to those of the EU, Japan and Switzerland. And with 3.2 million hectares certified, ranks second worldwide behind Australia,” said Parra, who is also the president of the Argentine Movement for Organic Production (MAPO), an NGO consisting of around 1,600 groups involved in organic food production.

The central Pampas region grows organic cereals, legumes and vegetables and the Cuyo region in the west, produces wines and olives. In the south, it’s sheep. Fruits, juices and jams emanate from the valleys that run up through the country.

Organic activity is regulated by law and certification is mandatory before any product can be called such. Obtaining a certificate takes a minimum of two to three years and can be expensive. But growing international demand makes it worthwhile and profitable, experts say.

Facundo Soria, coordinator of organic production at the Ministry of Agriculture, Livestock and Fisheries, believes that Argentina has “many comparative and competitive advantages”. The country has fertile soils, a variety of regional economies that can become organic, water availability, and opposite seasons to buyer countries, which means Argentina can provide them with products they can’t produce.

Natural foods

Diego Fontenla, of the Pampa Orgánica Sur Group, said producers’ decisions to go organic generally arise from environmental concerns over the impact of agrochemicals, and an interest in natural foods.

“The organic product provides a guarantee to the consumer that they are eating something safe, much more nutritious and healthier,” said Fontenla, adding: “An organic orange juice is orange juice, it is not water with syrup and acidifier.”

Bruno Vasquetto, producer of El Mate Organic Foods, says modes of production that do not use chemical or genetically modified inputs “will increase year by year because society demands more and more not only cheap food, but also quality. As the amount of organic producers increases, the prices of these foods will decrease”.

China’s organic awakening

China’s market for organic products has seen a rapid increase with goods available in supermarkets and through subscription schemes that, for an annual amount, regularly supply organic vegetables.

A recent survey by Chinese e-commerce giant JD Big Data Research Institute shows that almost 70% of respondents bought “fresh organic produce.” Another report by the company revealed that middle-aged, middle-class Chinese are those most likely to opt for fresh organic produce, as seen in other countries.

There is a new productive paradigm…Whoever doesn’t follow it loses an important portion of the market

Ernesto Fernández Taboada, executive director of the Argentine-China Chamber of Commerce, said China has a new generation of young adults that is driving the consumption of organic products: “They are professionals, children of prosperity, who want to eat healthy foods.”

“China is an organic market that needs attention. It will continue to grow and will offer good opportunities for our producers. Argentina is well perceived by Chinese entrepreneurs. We are a country they call ‘clean’ or ‘blue skied’, like Australia, New Zealand and Brazil – our competitors,” he said.

A big market to develop

Producers agree that China is the next big market to conquer.

“China is the goal and when we achieve it, it will have a very big impact,” says Parra. In November, Chinese authorities authorised the import of Las Quinas honey. He is now working for more producers to get approval but admits there is a lot to do to grow Argentina’s share of the Chinese organic market.

“We have to be careful not to make mistakes and only go halfway. Argentina’s supply is not very strong for a destination of that size. We need to have more producers and support policies for the sector,” he said.

Australia is currently the leading organic supplier to China, mostly organic dairy products and meats. It is followed by the US, Europe and Japan.

The Argentine Agency for International Trade and Investment (AACI) believes that there is ample room to increase exports because it specialises in numerous organic products that aren’t yet exported to China.

José Alberto Bekinschtein, the agency’s director of international trade, points out that to enter the Chinese market “certification of imported organic products is required under Chinese organic standards and compliance with all other Chinese laws and regulations.”

17 tonnes of Argentine organic products were shipped to China in 2018, mostly Chia seeds

Unlike the EU, Switzerland and Japan, Argentine organic certification has no equivalence with Chinese certification. That is a barrier to the entry of most organic produce. In 2018, only 17 tonnes arrived in China from Argentina, mainly chia seeds.

Juan Carlos Ramírez, former coordinator of Ecological Production of the National Service of Agrifood Health and Quality (SENASA) said: “China is a great market to develop and the opportunities are enormous, but it has very strict administrative requirements.”

New sustainable certifications

A growing concern by citizens over the way food is produced is forcing states and companies to establish standards to make sure that food meets sustainability criteria. This has opened the door to new certifications for food, not just to prove it’s organic, but also that it respects additional criteria.

Bruno Vasquetto says it’s important to look for certifications that show that biodiversity is respected and soil improved.

Sabine Papendieck, a consultant in international trade and sustainability, said: “There is a new productive paradigm and it cannot be produced in any other way. Whoever doesn’t follow it loses an important portion of the market.”

The environmental, social, economic and climate impacts of production are also considerations, she added: “Sustainability standards multiply and tend to be a condition of market access. Europe began, but then other countries mirrored and incorporated them. China is not going to be the exception.”

Ricardo Parra agrees. Five years ago, he added B-Corps certification to his organic production, demonstrating fair trade standards, social responsibility and sustainability.

“When you choose what to produce or what to buy you are also deciding in which world you want to live,” he says.

Source: Dialogo Chino

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Post available in: English

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