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Covid-wary China Concerned about Frozen Food Imports and Food Waste

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At the same time when authorities in Beijing have ordered importers to avoid buying frozen food from countries reporting significant new outbreaks of novel coronavirus (SARS-CoV-2) and following reported detection of the virus in shipping containers as well as in samples of shrimp, salmon and chicken wings from South America, Europe and Russia, China is stepping up anti-food waste campaigns to reduce losses in restaurants and other catering operations.

On September 26 PRC customs officials said that tests on the outer packaging of imported Russian seafood products in Shandong province proved positive for coronavirus, while on September 25 it was reported that the inner packaging of a batch of frozen fish from Brazil tested positive for the potentially deadly virus. By now, according to state media, China has blocked imports from a growing number of companies in at least 19 countries where food processing employees have tested positive for the virus that first emerged in the PRC late last year.

Meanwhile, the World Health Organization (WHO), the US Centers for Disease Control and Prevention (CDC) and numerous trade associations including the American Frozen Food Institute and the National Fisheries Institute have stated unequivocally that the possibility of spread of coronavirus through food is extremely low.

Rabobank Analysis of Food Waste Campaign

Although China claims to have no immediate worries about food shortages, the coronavirus pandemic, geopolitical turmoil, and the escalating trade tensions with leading exporters have the potential to restrict the PRC’s access to edible oil and protein meals, pointed out Rabobank’s RaboResearch Food & Agriculture unit in a recent report. The PRC is highly dependent on these imports, often in the form of oilseeds, which are then domestically processed.

Based on Rabobank’s analysis, eliminating waste in food catering (including restaurants, group dining and food deliveries) could make up to 5% of the nation’s soybean imports (5 million metric tons) and 6% of the palm oil imports (0.4 million metric tons) unnecessary. In addition, 10 million metric tons of feed grains, mostly corn, could also be “saved” this way.

As China’s corn supply is experiencing shortfalls and stocks are being depleted, to some extent it could help narrow the deficit and lower import needs, according to Utrecht, Netherlands-based Rabobank analysts.

Food waste in food catering only represents a small proportion of total food losses. A broader food loss reduction along the food chain will increase food security, reduce environmental impacts and ultimately form a more sustainable food system. 

Food security is always a top priority of the Chinese government. The nation is striving to achieve self-sufficiency in staple food grains. Large quantities of wheat and paddy rice are stored in the state reserve centers, probably equivalent to one year’s need. Yet the PRC government still emphasizes the urgency of reducing food losses, given the nation’s large population to feed and its scarcity in natural resources. After all, waste of food is also wasting water, land, energy and other resources.

“President Xi’s national anti-food waste campaign, targeted at food catering, attracts increasing attention and enhances Chinese citizens’ sense of food security,” according to Rabobank. “His reiteration of food security might also be associated with the coronavirus pandemic, the geopolitical turmoil and the US-China trade tensions. The coronavirus pandemic could jeopardize food security in importing countries, amid port lockdowns and trade restrictions.”

China heavily depends on imports of oilseeds for its edible oil and protein meal supplies, which could also face strains. In addition, political tensions threaten trade flows and the risk of a further deterioration of the US-China trade relationship should not be ruled out. Trade disputes with Canada and Australia could also be prolonged and escalate further. The US, Canada and Australia are all major agriculture trade partners, exporting grains and oilseeds to China.

Grain and Oilseeds Exports to China Face Uncertainties from Trade Disputes with Canada, Australia, and the US

Source: China Customs 2020

Facing increasing uncertainties, the Chinese government is expected to prepare for a theoretical worst-case scenario. On the supply side, the PRC might diversify import origins, boost domestic production and establish higher buffer stocks. Due to continued urbanization, China has limited potential to expand planted acreage. And frequent occurrences of adverse weather, such as drought, flooding, typhoons and early frost, could lead to yield volatility and loss. Thus, reducing food waste on the consumption side becomes one of the solutions for enhancing food security.

Millions of Tons of Grains and Oilseeds Could Be Saved By Reducing Food Loss

The ongoing anti-food waste campaign mostly targets the food catering channel. Traditionally in China, hosts tend to order food in large volume to show generosity to guests. It has been estimated that an average of 11.7% of food served is wasted, based on a study co-authored by the Chinese Academy of Science and the World Wildlife Fund. For business banquets, social gatherings and school canteens, the waste rates exceed a much A 30%.

A portion of the food waste of dining-out is edible oil and animal protein. In China, food catering accounts for 40% of edible oil consumption. Animal proteins make up between 35% and 65%. White-feather broilers and beef make up an estimated 55% to 65% of food catering, with pork and yellow-feather broilers are put at 35% to 45%. Using 11.7% as the reference waste rate and standard feed formulas, Rabobank converted the wasted animal protein into feed grains and protein meals, along with the wasted food grains and edible oil.

Food Waste in the Catering Channel: Calculated direct (food) and indirect (feed for meat production) saving potential for agricultural commodities

Note: Energy grains refer to corn and other feed grains; protein meals refer to soy meal, and other protein sources
Source: Rabobank 2020

What’s the Impact of a ‘No-Waste Scenario’?

Eliminating food loss in food catering could reduce the use of 5 million metric tons of protein meals, of which 80% are soy meal, and 1.7 million metric tons is edible oil, of which 60% are soy oil. The savings of soy meal and soy oil would be equal to 5 million metric tons of imported soybeans, or lowering 5% of the nation’s imports. Meanwhile, roughly 0.4 million metric tons of palm oil, or 6% of the annual imports, could be saved.

As for grains, potential savings in food grains will be negligible at 7 million metric tons, or less than 3% of annual consumption. Besides, 10 million metric tons (5%) of China’s feed grain use, mostly corn, could also be spared. As the PRC’s corn is experiencing a big deficit and low inventories, the savings could help narrow the supply-demand gap and lower future import needs to some extent.

Lastly, food waste in the catering sector only accounts for a small share of China’s total food losses. Besides catering and household consumption, massive food losses also take place in the harvest, storage, transportation, processing and retail stages, requiring a more efficient supply chain. The current campaign advocates a change in the social behaviors relating to frugality, but over time, China’s food value chain will need to improve and streamline to be more sustainable in both production and consumption patterns.