French fries manufacturers in China are ramping up production this season. In doing so, they are not only anticipating the growing demand, but also the lower import last year as a result of international logistical disruptions. It does require more supply of French fries potatoes from abroad, as the Chinese acreage has shrunk.
China will produce approximately 2021 tons of fries in the 2022/420.000 season, predicts the United States Department of Agriculture (USDA). This would increase production by 20%. It also means that production last year was already much higher than forecasts at the start of the season. For 2020/2021 it was assumed that: 330.000 ton fries, an increase of 10% compared to the previous year.
Imports are falling sharply
According to the USDA, production last season ultimately amounted to around 350.000 tons of fries. French fries producers in China expanded their production capacity, partly to accommodate declining imports. Due to logistical problems - mainly due to the limited availability of containers - less than 2020 tons were imported in 2021/77.000. This has been an average of 140.000 tons over the past five years.
Because the logistics disruptions are slowly being resolved, Chinese chip imports are expected to increase slightly to 2021 tons in 2022/86.000. The USDA report shows that there is a good chance that China will not return to its previous import levels. This is due to expansion in the domestic industry. Among other Aviko en LambWeston strengthen their position in China. The latter wants to open a new factory in 2024 with a capacity of 113.000 tons of fries per year.
Market continues to grow moderately
The French fries market in China and surrounding countries has grown considerably in recent years. Manufacturers are responding to this development. They expect that the demand for fries will continue to grow moderately in the next ten years. Continued urbanization, the increasing number of fast-food restaurants and the development of delivery services are driving increasing French fries consumption.
If China itself starts producing more fries and importing less, the United States will be the first to notice. The country is, with a share of 45%, the most important French fries exporter for China. Other major suppliers are Turkey, the Netherlands, Belgium and Argentina. Chip exports from the EU-5 to China were significantly lower in the first half of this year than in the same period in previous years.
Area in China is shrinking
There are opportunities for the export of French fries potatoes to China. The same USDA report shows that Chinese domestic potato production in 2021/2022 is estimated at 94 million tons. That is a decrease of 5% compared to the estimated 99 million tons in the previous season. The main cause is the shrinkage of the area. Farmers have planted potatoes because of the low prices. In the first half of 2021, French fries potatoes would yield 25% less than in the same period of 2020. On the other hand, corn is doing very well, a reason for many growers to adjust the crop plan accordingly.