The rising middle class will spend more on food and luxury items.
The challenges to China’s growth include water quality/quantity shortage and poor air quality. Close to 400,000 deaths per year are attributed to air pollution and China loses 8% to 12% of its gross domestic product because of its poor environment, he said. Lack of effective food safety regulations worry Chinese consumers, with continuing problems with dairy, meat and other products.
In response to China’s troubles regulating food, there is increasing interest from Chinese consumer for green and organic food, and healthy products.
Agricultural modernization will likely reduce the number of farms and increase sales. Chinese has the potential to show export growth in apples, pears, grapes, carrots, garlic and mushrooms, Trachtenberg said.
Investment in Chinese agriculture will increase from overseas and domestically with greater interest in modern seeds and genetically engineered crop.
China currently loses about 25% to 30% of its fruit and vegetable output, and Trachtenberg predicted greater investment in ag mechanization and post harvest treatment.
The country will benefit from falling internal trade barriers, improved infrastructure and improved food safety, he said.
Patrick Vizzone, analyst with the National Australia Bank, Hong Kong branch, said in his presentation that China’s economic growth will fuel food demand in Asia. China’s economy is expected to grow at a rate of close to 7.5% in 2013 and 7.2% in 2014, he said. That compares with 3.5% growth for the global economy.
The expansion of agriculture productivity will slow due to resource constraints, he said.