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Chileans stand by Chinese partners during coronavirus outbreak

© Alexandra Sautois

 

Chilean Fruit Exports Association (Asoex) has offered support to China by offering to donate fresh fruits to the medical staff working to treat people affected by coronavirus. Containers filled with fresh Chilean produce sent to different ports across China had been held back due to the outbreak. With Chinese consumers turning to online markets to buy fresh produce, overall consumption has reduced. Shipping companies have been working to keep the containers in the market so as to increase availability of refrigerated storage.

In a statement issued by the organisation, Asoex president, Ronald Bown Fernandez, said: “It is complex, it requires constant monitoring as to how it evolves. We are relying on Chinese authorities to contain the virus, with the aim of returning to normalcy in the shortest period of time possible.” It’s unknown how long the current situation in China will last, with Asoex announcing it will work with the government to minimise the negative effectives by implementing a “specific campaign to promote the healthy attributes of fruit consumption”.

Around 265,000 tons of Chilean produce have been exported so far this season, with the main products being cherries, blueberries, table grapes, avocados, nectarines, plums, apples, and kiwifruit. This figure is up 27.7% from the same period last year.

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Global shipping stricken by coronavirus outbreak

Global shipping stricken by coronavirus outbreak, © Anthony Kwan, Getty Images

© Anthony Kwan, Getty Images

 

The coronavirus outbreak has taken a heavy toll on China’s shipping industry as a result of the lower output and trade. A report published by Danish maritime research group Sea-Intelligence highlighted the greatly reduced cargo flows between China and the rest of the world, with 50 sailings cancelled since January and 30 last week alone across the Pacific and to Europe. The Wall Street Journal reports that five European and Asian container ship operators are preparing profit warnings for the first half or the full year. This news comes as a great disappointment, especially as it had been hoped that the improved trading relationship between the US and China would result in an upsurge in business. The WSJ reports that at least one container ship with a capacity to carry over 20,000 containers left Shanghai for Northern Europe with only 2,000 full containers. “It will pick up more at ports on its way, but loading data show it will reach Europe around 35% full,” this broker said. “That’s unprecedented, and a lot of money is being lost because it doesn’t even cover the fuel cost.”

According to the report published by Sea-Intelligence, over 350,000 containers have been removed from global trade since the Chinese New Year. These woes are estimated to be costing the shipping sector around US$350 million a week.

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Chilean fruit exports to China decimated

Even though fruit is a significant snack globally, and even vegetables are popular in the Asia-Pacific region (57%), cheese is the most eaten snack in Europe (58%), bread/sandwiches in the Middle East (47%), ice cream in Latin America (63%) and potato/tortilla crisps in the US (63%).

 

Chile’s fruit exporters association (ASOEX) has estimated the losses to the country’s exports to China at close to US$100 million. This news was announced at the second meeting of the public-private table where the effects of the coronavirus on Chilean exports to China were analysed. The meeting included chaired the Minister of Foreign Relations, Rodrigo Yañez and the President of the Association of Fruit Exporters of Chile AG (ASOEX), Ronald Bown Fernández.

“After the end of the Chinese New Year celebrations, there were expectations of a revival in trade. However, on Monday, February 10, only 68 containers of cherries were sold. While in total, during the first 48 hours of operations in the wholesale markets in Shanghai, Guangzhou, Beijing and others, only 249 containers of the existing fruit stock in the chain were sold, estimated at 1,500 containers of cherries,” said the President of ASOEX. He added: “The first sales prices have been lower than expected, also in relation to the values ​​reached before the Chinese New Year. We believe that if the current trend were maintained, lower revenues could be projected for the cherry export sector of between US$70 and 80 million. But if we add other fruit species to this, we could reach losses of about US$100 million. However, this could vary depending on how the situation develops. So, we are constantly evaluating the market and conversing with our representatives in China.”

There is also concern about the fruit in transit to China, estimated at 1,600 containers, whose expected arrival dates are between now and March 15. These shipments contain about 59 containers of blueberries, 173 containers of cherries, 872 containers of plums, 387 containers of nectarines, 30 containers of avocados and 134 containers of table grapes. 

The Chilean fruit export industry has adapted its export promotion strategy in China, which includes facilitating the consumption of the basket of fruits exported by Chile, including cherries, blueberries, peas and table grapes, to highlight their nutritional benefits. The consumption of fruits will be promoted via online media and in retail chains and the sector will continue to donate fresh fruit to clinics and health centres. The first delivery will consist of 1,000 1.5 kg boxes of blueberries, donated to the lung hospital of Shanghai.

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Benlai reaches 36 million loyal members in China

Benlai reaches 36 million loyal members in China
Credit: Benlai

 

Since it became profitable in 2018, China’s third specialist food E-platform has increased direct investments in production and new hybrid business model ‘Fresh Plus Store’.

With seven years’ experience in online sales of fresh products in China, Benlai has taken a leading role in process management and implementation in the supply chain. Among its 300+ brands, Benlai has enjoyed great success with partnerships such as with Chu orange, Hongqipo 100 apple, Liyushuang organic rice, Pujiang orange, and Yu San hairy crab.

Benlai.com supplies fruits, vegetables, meat and poultry, aquatic products, cooked foods, grains, oils and other groceries. Over the past three years, annual sales have grown by more than 300% across China. It delivers fresh products to 109 cities across the country using cold-chain solutions and to 300 cities by regular delivery. At present, there are nearly 700 offline stores in China, having entered the Shanghai market in January 2019.

New hybrid business model

The ‘Fresh Plus Store’ is the new O2O (Offline-to-Online) retail model developed by Benlai.com, in order to better target the mass markets. The concept is to integrate offline shopping with online sales. Door-to-door delivery is offered for consumers located within 300 metres. Belai.com has opened stores in China’s major cities, like Wuhan, Chengdu, Changsha, Zhengzhou, Tianjin, and Shanghai. Benlai has enjoyed great success since 2018 with its two brands, Fresh Plus, for the O2O model, and Benlai.com, for the B2C model, both of which have become competitive and attractive for investors. In October 2019, Benlai received a US$200 million investment fund to accelerate its development.

A strategic agreement with SGS

At the 2019 China Agricultural Forum, Benlai signed a strategic agreement with SGS (the world’s leading inspection, verification, testing and certification company) that will see the two parties cooperate closely in the areas of supplier management, fresh product testing, and own-product services to build a traceability quality control system for fresh products and improve product quality. During the 3rd China Fresh Produce Conference, organised by Eurofresh Distribution & the 23rd FHC CHINA expo in Shanghai (SNIEC), Bian Ning, general operating manager of Benlai.com said, “2019 is an unprecedented year for China’s fruit market because of the large planting area, good harvest and varieties.” As the Spring Festival will take place earlier in 2020, this will mean a short season of fruit demand in China, and risks causing a sharp reduction in fruit prices in the first half of 2020. Therefore, Benlai has launched a fast combat strategy to offset the upcoming risks.

 

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Fresh Produce China a feature at FHC China 2016

China’s fresh fruit produce has increased fourfold in the last ten years – over 3.8 million tons were imported in 2015 alone – meaning there has never been a better opportunity to start exporting to China.

FHC China 2016 – China’s leading trade show for imported food and drink – returns to Shanghai November 7-9 with the highly anticipated, inaugural Fresh Produce China. It is an ideal platform for business introductions and negotiations with the participation of over 65,500 distributors, importers, retailers and catering purchasing teams.

Being held at the Shanghai New International Expo Centre (SNIEC), the show is set to be bigger than ever on its 20th anniversary with nine new countries being welcomed into the fold: Armenia, Egypt, Georgia, India, Malaysia, Mauritius, Ukraine, Slovakia and Saudi Arabia.

China’s fresh fruit imports have increased fourfold in the last ten years – over 3.8 million tons were imported in 2015 alone – meaning there has never been a better opportunity to start exporting to China. By the end of 2015 there were over 160 different fruits approved for import into China from 37 different countries covering everything from avocados to watermelons.

Improved cold-chain logistics and an ever increasing population of young urbanites have opened up new markets and driven huge growth in fresh e-commerce sales in recent years. The growth for of fresh e-commerce means that big service providers such as Alibaba and YihaoDian are now acting as both distributors and retailers, making them the key contacts within the sector.

“We participate at FHC to launch our TMALL Fresh Food platform targeting the hospitality trade,” said Alibaba Group senior business manager import Ling Leung.

With a growing population of 1.3 billion, Chinese consumer behaviour and demands keep shifting to accommodate the food needs, the show organisers, China International Exhibitions Ltd, said in a press release.

“Providing enough food at acceptable levels of quality and at an affordable cost is shaping up to be one of China’s most challenging problems. Lax quality control, production shortcuts, urbanisation and rising consumer spending are all combining to turn the spotlight on China’s food supply chain, creating problems — but also opportunities — for international companies doing business in the country.

“China’s middle class together with an increased number of foreign visitors and expatriates are fuelling the imported goods boom, as foreign produce is associated with safety and quality, which in turn creates willingness to pay premium price.”

They said also highlighted that China’s fresh fruit import market has rapidly become an incredibly lucrative market with great potential for further growth:

  • China’s fresh fruit imports have been growing at an average of 16% a year since 2005- reaching a peak of 3.8 million tons in 2016.
  • Fresh fruit imports from the Southern Hemisphere have been growing even faster at the rate of 23% since 2005.
  • Agricultural exports from America to China have grown 200% since 2005 and are now worth $20.2 billion

For information on FHC China 2016, visit www.fhcchina.com.