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Interesting Trends in China make for Thriving Companies in America

As China continues to dominate the world’s economy at no surprise to any of us, the Chinese consumer still continues to confidently display their strong purchasing power in lieu of the still recovering recession. Many companies in the States are currently being held afloat due to the unexpectedly high demand from the Chinese. These trends are a pleasant surprise for American companies who have found an opportunity in the continuing recession.

A report from the US International Trade Commission indicated that oil seeds and oleaginous fruits are among the top US exports to China in 2009 and more surprisingly, increased by 26.5% in just one year. The New York Times recently indicated this year China will emerge as the top foreign buyer of American almonds, more than double from last year and last year China was the top foreign buyer of American walnuts. According to the United States Department of Agriculture, China has bought $737 million in tree nuts which is $648 million more than a mere five years ago. Keith Rigg, an almond grower and exporter in Le Grand California said that, "They’ve [China] basically gone from nothing to No.1 in a relatively short period of time."It all started when Chinese importers jumped on the low prices of walnuts and pecans when the recession hit nut companies in America hard. A grower and export of walnuts and pecans said that "the market shot back up in a year, which is absolutely unheard of."Daniel Zedan, who is the president of a nut brokerage firm in Illinois, indicated that, "We are now at the highest prices ever in history of the pecan industry for pecan meats and yet we have one of the largest supplies ever because of China"

To make it even more profitable, American companies did some market research in China where they realized that Chinese consumers tend to buy and like their nuts roasted, salted and still in the shell and that the domestic Chinese market would then sell these nuts in small quantities to make them affordable to the average consumer. This boom is following the early increase in other American agricultural exports to China, such as dairy and meat products. This is a clear indication that the rising consumers in China are becoming more and more affluent and recognizing that their standard of living is increasing. The flourishing nut consumption isn’t all due to the Chinese’s nut tooth though, marketers’ efforts to change eating habits and tastes is a large reason why the trend is happening today. A happy Randy Hudson, a pecan grower and exporter, said that, "China has totally changed our industry. We’ve seen some very significant increases in price, and it’s just put new enthusiasm back into pecan production in this country"

It seems another oilseed vying for China’s attention isn’t just the almonds and pecans. The modest and small soybean is gaining momentum as the China country director for the U.S. Soybean Export council announced at least a 6% increase in this little legume by next year. The rising housing market in China is also a sign of the rising wealthy in China who is moving from rural areas to urban cities. This has a direct impact on the soybean since it’s a large staple for the Chinese household. Additionally, urban inhabitants usually have a better income and thus can afford a diet rich in protein and meat. The country’s soybean consumption is expected to rise by 7 to 9 percent a year based on the pace of the urbanization that is happening now in China. Currently, the US is sitting as the largest supplier of soybeans to China, with a 45 percent market share. Beginning in September 2010, China’s soybean imports in the first five months gained 13 percent with 19.6 million tons being imported. In 2009, soybeans became the top export for the US to China.

Although soybeans have quite an influential impact on the Chinese consumer, it could perhaps also serve a duel purpose. With global warming on the table for many international leaders, soybeans may become a leader in another sector: the ethanol and bio-diesel fuels industry. Along with corn-another monumental leap in exports to China-soybean and other grains have the potential to be environmentally friendly for the over polluted China. Only time will tell if this soybean has the power to unleash more than just a satisfying meal for the Chinese, that is, unless marketing companies have something to say about that.

 

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