Background
Global 16 October 2014

The Chinese are
all eating potatoes

With an annual yield of 80 million tons, China is the largest potato producer in the world. This is surprising for a country that has been traditionally known for its rice fields. The government is promoting the potato as a staple food and aims for a doubling of its consumption. Meanwhile, the Quick Service Restaurants (QSR) are shooting up like mushrooms and the French-fry processing industry is growing exponentially.

Chinese consumers regard potatoes as a vegetable, but the ambition is that tubers should replace part of the rice crop as a staple food in due course.

Why is the potato so enormously popular in China? We asked the consultant Ton Frijters, who has been exploring the Chinese market from his Dutch TMAT consultancy company ever since 2001.  "Chinese consumers regard potatoes as a vegetable, but the ambition is that tubers should replace part of the rice crop as a staple food in due course. They have a higher nutritional value and, moreover, need less water during the cultivation process. For this reason, the government ruled five years ago that the potato should become a strategic crop."

A different consumption pattern

The favourable conditions that the Chinese government created for the potato have shown their effect: prices have risen, it's much more attractive for farmers to grow this crop and they have started to do so on an increasingly-large scale and in a much more professional fashion. "Parallel to this development, there is the enormous urbanisation, which has an influence on the consumption pattern', says Frijters. ‘While there were only around 50 cities with more than one million inhabitants ten years ago, today China has over 230 of such cities. People, who first grew their own food in the country have now become consumers in the big city."

Number of cities with over a million inhabitants
Number of cities with over a million inhabitants

Enormous potential

These townspeople appear to be very fond of fast food. While, on the one hand, the table potato is promoted by the government, on the other, the French-fry processing industry in China is contributing enormously to the exponential growth in the potato sector. The construction of new chips factories is an ever-ongoing process because the potential is enormous. ‘And to think that now only 1% of the Chinese potato harvests goes to their own French-fry industry, because half the chips are imported deep-frozen and ready from Europe and North America in order to meet the high demand of the QSR chains.

Quality in the chain: more about the role of the QSR industry in China

Food security

The enormous growth in China opens up opportunities for all parties in the potato chain, both nationally and internationally. But how long will that rapid growth continue? Frijters hasn’t got an answer to that. "Perhaps the chips consumption will continue to grow to Western levels, or maybe the QRS industry in China will stop at a lower level. Time will tell. The Chinese want to take over more and more of the cultivation and they are progressing fast, but there are limits even in China where the availability of land and water are concerned. The allocation of agricultural land is more difficult than it was ten years ago, because the urbanisation has made the government increasingly aware of the importance of food security and food safety.”

“Where only 15 tons per hectare are being harvested on those small fields now, in the future, with large-scale potato cultivation, a crop of 45 to 50 tons becomes a possibility.”

Dynamics provide opportunities

And yet, large-scale potato cultivation is perfectly possible in China. "The Inner Mongolia region has the best papers’, says Frijters. ‘Production there is already comparable with that in North America and Australia thanks to the excellent irrigation systems. Moreover, because of urbanisation more and more private agricultural land is becoming available. If the approach is sufficiently professional, the yields can rise in the long term. Where only 15 tons per hectare are being harvested on those small fields now, in the future, with large-scale potato cultivation, a crop of 45 to 50 tons becomes a possibility. So, the dynamics in the Chinese potato market will continue to offer plenty of opportunities. Certainly for businesses such as HZPC that, for many decades, have been building up their knowledge and expertise in potato variety breeding and growing.”

HZPC

HZPC has been active on the Chinese market since 2002. A few HZPC varieties are currently being registered for use in the various sectors. The Innovator variety, which was one of the first varieties available on the Chinese market, is already being marketed by various French-fry processing companies. HZPC expects to expand its share in the important Chinese seed potato market further in the coming years.