The Market for Food Ingredients China HK 1998(12)

The Market for Food Ingredients in China and Hong Kong

sorbitol aspartame sucralose lactitol

caramel and other natural colours sorbic acid potassium sorbate propionic acid TBHQ pectin gelatin

emulsifiers and stabilisers

While growth rates for the Chinese food industry are still quite strong, the sector is experiencing a cost-price squeeze. This has in turn affected both the quality of food ingredients sought by the food industry and the prices it has been willing to pay. However, while China continues to be a price buyer, increasing spending power in China will provide further opportunities to differentiate Australian food ingredients on a quality basis.

Although Hong Kong’s processed food industry is relatively small, it remains an important food ingredient market in its own right. More importantly, Hong Kong remains an essential transhipment point for a large range of food ingredients into China. High import tariffs imposed by China have meant that many imported ingredients can remain competitive in the market only if they are imported via illegal channels. Because many of China’s ‘greyer’ market channels are through the border with Hong Kong, the former colony will remain crucial in trade between mainland China and other countries. This situation can be expected to continue until such time as trade barriers are lowered to the extent that direct import into China becomes a viable option for doing business.

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