Sales of Danish agricultural and food products are booming in China.
Agreements made during a Chinese state visit to Denmark earlier this year will further strengthen trade.
By Jesper Løvenbalk Hansen, Focus Denmark no. 3
Exports of Danish pork are expected to increase significantly as the Chinese middle class grows.
Over the last year, exports to China have grown by almost a quarter, and China is well on its way to becoming Denmark’s most important export market outside the European Union.
Just under half of Denmark’s exports to China come from agriculture and the food industry, which in the last five years have seen a boom in sales to the world’s second largest economy. This year, exports are expected to pass DKK 13 billion (EUR 1.74 billion) (see box).
If the trend continues, Danish agricultural exports to China will increase by almost 20 percent this year and will have nearly tripled in five years, according to the Danish Ministry of Food, Agriculture and Fisheries. A key factor in the equation is that exports of pork are expected to increase significantly as the Chinese middle class grows.
“China is a growth engine for Danish agricultural and food exports. The future potential is enormous, and will benefit Danish jobs in slaughterhouses and in agriculture. Sales of pork are storming ahead, but there are also plenty of earnings in selling speciality products such as pigs ears, seed grass and bull semen. Denmark can supply these things, and often with a greener profile,” says the Danish Minister for Food, Agriculture and Fisheries, Mette Gjerskov.
Enzymes and milking robots
Growth is expected especially in exports of agroindustrial products to China and other markets seeing rapid development due to Denmark’s leading position in this area. Danish enzymes are added to animal feed, and are used in dairy roducts and the production of biofuel worldwide. In addition, Danish agricultural machinery such as ventilation systems for livestock housing, slaughterhouse robots and milking robots are being exported to the new markets. The positive forecast is based on the simple fact that the demand for food and products to the food industry are growing regardless of whether there is a global economic crisis or not.
“People do not stop wanting food, so we do not expect a decline in the agricultural industry in 2012,” says Leif Nielsen, chief economist of the Danish Agriculture and Food Council.
Agreements with China
Food and agriculture were also in focus when China’s President Hu Jintao visited Denmark in June. He headed a delegation of ministers and representatives of Chinese companies. During the 2-day visit, 20 bilateral agreements were entered between China and Denmark. In the agricultural area, six agreements were entered between the food ministries of the two countries. The agreements aim to strengthen trade in food between China and Denmark, as well as collaboration on ensuring food quality and safety. The latter applies for example to the monitoring and reduction of antibiotics in food, and the reduction of CO2 emissions from agriculture, where Denmark has one of the lowest emissions in the world per animal. Since 1990, the agricultural industry’s emissions of greenhouse gases have been reduced by 28 percent despite increasing production value and export earnings.
“Food safety is decisive for exports to China. Food scandals have made Chinese consumers wary about where their food comes from, and China’s rapidly growing middle class wants quality and food safety. The Danish food industry can supply this. But it also means that Danish and Chinese food authorities are vital for access to China by Danish companies,” says Mette Gjerskov.
The director of the Danish Agriculture and Food Council, Søren Gade, is pleased that the Chinese state visit also has a longer perspective. China is in a development process where the government is focusing on intensifying agriculture. The country’s agricultural land area is about 121 million hectares – equivalent to just 0.1 hectare per capita, which is 40 percent of the average agricultural area per capita worldwide. There is a pressing need to increase the yield per hectare, and this is an area where Danish know-how and experience from the development of Danish agriculture is sought after.
“We can help with technology, knowledge and development because we have such a strong position in food safety and quality. In addition China wants to make its agricultural sector more efficient, which is also an area where we have special knowledge,” says Søren Gade.
The Chinese state visit to Denmark was quickly followed up. After an invitation from the Chinese government, the Danish Prime Minister, Helle Thorning-Schmidt, and the Minister for Food, Agriculture and Fisheries, Mette Gjerskov, visited China in September.