New Trade Deals to Promote Dairy, Food Product Exports from UK

UK - Farmers and dairy producers in the United Kingdom will soon be able to take advantage of the growing taste for cheese, chips and crisps in China, following a pair of new trade deals between the two nations.
calendar icon 31 August 2018
clock icon 3 minute read

China has agreed to accept imports of British dairy products made with milk from third countries in a deal that is estimated to generate 240 million pounds ($310 million) for the UK economy over five years.

In addition, China's developing taste for potatoes will soon be fueled by British produce, after an agreement was signed that allows the UK to export seed potatoes to China for the first time.

Both deals were finalized during a meeting in Beijing last week between UK International Trade Secretary Liam Fox and Ni Yuefeng, head of the General Administration of Customs in China.

"I am delighted to see the completion of this deal, bringing significant benefits to dairy producers across the UK at a time when British food and drink exports are at a record high," said Mr Fox.

Last year China imported British dairy products worth 97 million pounds made mostly from milk sourced from within the UK. The UK government expects that trade figure to increase by almost 50 per cent now that exporters can send goods with milk sourced from other nations.

"The appetite in China for UK produce is clearly strong. However there remains untapped potential across all food and drink categories," said UK Trade Commissioner for China Richard Burn. "Imports into China of products such as yoghurt, flavored milk and cheese have seen rapid growth as Chinese consumers increasingly associate these items with nutrition and well-being."

Changing consumer tastes in China has led to a boom in dairy consumption. China imported 14.2 million metric tons of dairy products in 2017, up 11 per cent on the previous year, and dairy imports are expected to exceed 19 million tons by 2026, according to China's Ministry of Agriculture.

The potato deal is expected to bring major benefits to Scotland, with around 70 per cent of the 100,000 tons of seed potatoes exported annually from the UK coming from Scottish farms.

Seed potatoes are varieties intended for replanting to produce new plants and tubers. They are grown in special conditions to lower the risk of disease. Scotland's potato crop is recognized within the European Union for its high health status.

China is the world's largest producer and consumer of potatoes, though per capita consumption is below that of the United States and Europe.

In 2016 the Chinese government set out guidelines to promote potato consumption and production in China in order to bolster food security.

The potato is now China's fourth staple crop after rice, corn and wheat and demand for fresh potatoes is increasing at an annual rate of around 5 per cent.

"The rapidly-growing Chinese market offers huge potential for UK farmers," said Mr Fox. "According to research by Barclays, around 60 per cent of people in China would actually pay more for a product, just because they knew it was British."

Rob Burns, head of crops export at the UK Agriculture and Horticulture Development Board, described the deal as a "real coup" for British farmers.

"I expect the Chinese market will be particularly interested in processing varieties used for chips and crisps as there is a big demand for those products," said Mr Burns.

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