Consumption of honey has risen continually in China since 1995, despite poor production levels in 1998 and 1999 caused by bad weather conditions and bee disease. But since then the sector has bounced back rapidly to reaffirm its domination of the world market.
The total supply and distribution of honey to the China market was in excess of 310,756 tonnes in 2003, a growth of over 31 per cent from 1997, the report says. Previously the high point in production was in 1997, when supply reached over 237,000 tonnes, after that disease and poor weather impacted production until 2001, when it resumed the levels recorded in 1997.
Consumption continues to rise
In line with the rising production of recent years, consumption also rose to hit 146,112 tonnes in 2003. Annual growth in consumption peaked in 1997 when it reached 62.1 per cent. In 1997-98 consumption dropped slightly as prices rose to compensate for the poor harvests, but by 2003 it had managed to climb back to 11 per cent growth, giving it a market value of RMB 0.82 billion (€81.4m), which accounts for 0.04 per cent of the total food market in China.
Over the six year review period that the report takes into consideration, total volume of honey sales rose by 56.06 per cent to reach 53,200 tonnes by 2003. This was matched by per capita consumption that rose from 0.028kgs in 1997 to 0.041kgs in 2003, showing a growth of over 30 per cent.
The report also outlines steady growth in production volume for the China market of around 6 per cent until 2008. Total production is expected to grow from 54,000 tons this year to over 68,000 tones in 2008. In line with this per capita consumption is also expected to grow by around 5 per cent a year, to reach 0.050kg per capita by 2008.
In an effort to maintain this rise in consumption Chinese honey producers are currently trying to produce mature honey, which contains more nutrients than immature honey. This is in effort to reinvigorate the market and to give a further boost to consumption.
The most recent government legislation of relevance to the honey market relates to packaging, hygiene and product labelling, the report says. The government introduced new hygiene regulations in 1995, which mean that product lines are now inspected, and those products that have passed the inspection can place a hologram label on their product, to show the consumer that the product is hygienically manufactured.
The government has also introduced strict codes on the labelling of product ingredients, and has tightened up laws concerning marketing claims for products, in order to clamp down on companies making false claims about the benefits of their products.
Packaging legislation relates more to hygiene issues, but the government has also been keen to encourage local companies to improve packaging, and the presentation of products, in order that Chinese products can compete against foreign brands. The report says that Chinese companies have responded well, and that there has been a marked improvement in food product packaging over the last few years.
In the face of the tougher international market for honey, Chinese honey exporters have asked the relevant national authorities to conduct carbon isotope inspections on all exported honey to guarantee quality, Access Asia highlights.
If this measure is introduced it would be overseen by the China National Chamber of Food, Native Produce and Animal By-products Importers and Exporters (CCFNAB). The inspections are aimed at preventing unlawful traders from mixing water with honey.
Quality and safety issues
In 2002 low levels of the antibiotic chloranphericol were discovered in Chinese honey - amongst other food products - creating problems for exports to both North America and Europe. Canada, the US, the UK and other countries immediately imposed a ban on a variety of Chinese food products, which was lifted after later consignments were shown to free of the substance.
Cloramphenicol is an antibiotic used to control disease in shrimp, crawfish and bees. It is mostly used to treat life-threatening infections in humans when other alternatives are not available. Use of the antibiotic is limited because it is associated with a rare, but potentially life threatening side effect called idiosyncratic aplastic anemia. For the small number of people susceptible to this side effect, exposure to chloramphenicol can be fatal.
Consequently, manufacturers in the US and Europe were forced to reformulate their blended offerings without Chinese honey and retailers withdrew affected products from the shelves. Chinese honey accounts for 40 per cent of UK imports, which meant that local producers saw higher sales at the expense of the Chinese producers.
The knock on effect has been that raw material prices have increased for many honey buyers.
China and the world honey market
In international terms China is currently by far the largest honey producing nation in the world, with around a 40 per cent slice of the market. The next biggest producers are the US, Argentina and Ukraine. According to the American Honey Producers Association China and Argentina have been adversely affecting America's domestic honey industry with cheap imports, although there is a counter argument that both China and Argentina have been helping to counterbalance falling production in the US. Also starting to emerge onto the world honey production arena are Thailand and Vietnam.
Although production has continued to rise the number of bee colonies in China has declined in the past few years from a high of 6.5 million to around 5.7 million in 2001. This decrease, the reports says, is due to the introduction of smaller beehives and reduced choice of bee yards. Additionally, many agricultural co-operatives have shifted from honey production and bee cultivation following the poor harvests of 1998 and looked for more high margin products.
Officially the Chinese government has not financially supported honey producers since 1978. However, some provincial level support is available to boost the industry and income from the sale of honey, honey products and queen bees is all tax free.
Imports and exports
Imports of honey have grown steadily since 1995, except for a dip in 1996. By 1999, total honey imports reached 1,400 net tonnes, a growth of 775% over 1995. In part, this growth in imports has been due to the rise in demand for specific types of honey from the food manufacturing industry. Additionally, falling world prices have made importation more attractive as well as the need to make up for the losses from the poor harvest of 1998.
China's major export markets for honey are Japan (23,015 tonnes), Germany (19,957 tonnes) and US (13,994 tonnes). Belgium, the UK and Spain are also major destination countries.
Although domestic demand promises to be strong, the outlook for the China's honey exports does not look so promising. According to the China National Chamber of Food, Native Produce and Animal By-products Importers and Exporters (CCFNAB), exports of Chinese honey will decrease in the long term, due to rising global competitiveness.
The full version of this report, containing comprehensive data about honey production in China is available from Access Asia.