"China
According to CI Consulting, a leading professional institution in the field of industry research in China , certified organic farmland in China
The expectation of USD7.94 billion (RMB50 billion) in domestic market indicates an over 28% year-over-year growth of the sales value of organic agriculture produces in 2011-2015, based on the estimated sales value of organic agriculture produces in 2010.
Chinese organic agriculture is based on traditional sustainable farming practices which started thousands of years ago. In China
Domestic market of organic products began developing in mid-2000s and has expanded very rapidly, especially in recent five years when some food scandals have been disclosed.
The significant growth of organic agriculture produce market is attributed by the following reasons:
First, the steady and rapid growth of China
Second, media reports about food scandals and risks on GMO foods help to promote the consumption of organic produces in China
Third, China
Because of the high expected growth potential in China
YMT Organic Farm Co., Ltd., an organic vegetable producer found in Shanghai
However, the high growth potential in domestic demand for organic agricultural produces, predicted by many professionals, can't cover the plight of current organic food market.
There were many reports on the depressed market that organic agricultural produces encountered at supermarkets. The main reason for the depressed sales is the high price. The price of organic agricultural produces is usually 1.5-3 folds of that of traditional products, and it can't be afforded by most residents.
Another key reason is that some of the marked "organic products" with high price may be not real organic products, and there are some reports on that. The key reason for the false mark of organic product is the loose certification supervision system in China
According to the data from the Certification and Accreditation Administration of the People's Republic of China
Many professionals disclosed that some certification bodies of organic agricultural produces haven't strictly followed the certification principle and process.
Food scandals and false labels of "Green food" or "Organic food" have had a serious and negative impact on the trust of Chinese consumers in domestic food safety and guarantees, such as certification.
Some consumers, especially those high-end consumers, prefer to buy imported products or those with foreign certifications which are viewed as more trustworthy. And committed organic food consumers pay greater attention to certain product brands and suppliers.
As to most local producers of organic agriculture produces, sales of products is the biggest problem, and thus it's hard for them to get investment return within a normal payback period as traditional agricultural investment does, let alone the expansion of capacity.
With citizen's increasing concern on "food safety" and enhancing purchase power, more and more Chinese residents will choose organic agricultural produces. However, the contribution of increasing demand to China
Chinese government should regain consumers' confidence by introducing stricter rules and regulations, focusing on production management supervision and certification body supervision, etc.
Meanwhile, producers of organic agriculture produces should rely more on quality control, brand consolidation and sales mode improvement in the future.
Source: AgriChina Investor
Content of AgriChina Investor 1202:
Multinational companies eye coffee market in China
Pengxin seeks overseas expansion in dairy industry
Xinjiang Chalkis and Yihai Kerry failed in further cooperation
Who will be the RMB10 billion pesticide player in China
2011 Import of agricultural produces surges in China
Scale breeding to play more important role in China
Chinese rapeseed industry confronting serious loss
Profits of Chinese dairy industry up 34.70% in 2011
Pesticide demand expected to increase by 4.37% in 2012
2011 trade of aquatic products maintains fast growth in China
Brand value of Yantai apple rises to USD1.46 billion
Organic agriculture investment: Only looks nice in China
Agricultural insurance in China
Agricultural logistics' problems become increasingly prominent
……
AgriChina Investor, periodically published on 25th every month, offers timely update and close follow up of agriculture investment in China
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