China: opportunities for UK exporters in the organic farm sector
Published 1 June 2014
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0.1 Detail
The Embassy’s Regional City Engagement (Outreach) team worked with Heilongjiang province, Defra, and the China Britain Business Council to organise an inward delegation, seminar and bilateral talks on organic certification in Heilongjiang, 19-21 March.
UK-China organic trade is currently very low, worth a few million pounds a year. The main reason is the lack of mutual recognition of organic standards between the EU and China, on which negotiations are ongoing. Meanwhile, trade is possible, but impractically complex and expensive for UK organic producers wishing to sell in China, who must currently fly Chinese inspectors to the UK to obtain certification at an annual cost of around £10,000. Only one producer has gone through this process to date.
At the seminar on 21 March, we arranged parallel talks for organic certifiers (private companies) and regulators (government bodies), with a common brief to agree steps to boost bilateral trade. UK certifier Soil Association Certification and Chinese counterpart OFDC agreed to cooperate on conducting Chinese organic inspections in the UK, which should in time remove the need to fly over inspectors. The deal was announced publicly on 14 April. Defra and Chinese regulator CNCA are exploring ways to support and deepen this cooperation at government level.
0.2 Comment
This agreement should – over time – substantially reduce the cost to UK organic producers of exporting produce to China, in effect making the £4.7bn (2015 forecast) Chinese organic market accessible for the first time. Analysts suggest that a similar agreement between Australia’s main CB and a Chinese counterpart, signed days before our seminar, could contribute US$90m a year to Australia’s organic sector. Heilongjiang producers have learned how to export to the UK; UK producers will benefit from the national agreements that Heilongjiang’s government helped to facilitate.
0.3 Disclaimer
The purpose of the FCO Country Update(s) for Business (”the Report”) prepared by UK Trade & Investment (UKTI) is to provide information and related comment to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.