China becomes tomato industry target

China - one of the world's three main tomato production and processing bases - has become a target for international tomato processors given the huge consumption potential.

Jim Beecher, former president of the World Processing Tomato Council, said that a huge potential can be seen in the Chinese market despite oversupply and decreased demand.

The changing dietary habits of Chinese people have caught the attention of tomato processors worldwide.

Over 100 tomato processors from around the world gathered on June 14 in Northwest China's Xinjiang Uygur autonomous region, the main tomato planting and processing base of China, to tour tomato farms in the region.

The Chinese started to consume more tomato-based products after McDonald's, KFC and other Western food companies opened their restaurants in the early 1990s, said Qin Yelong, president of China Oil & Foodstuffs Corp Tunhe Co Ltd.

COFCO Tunhe, based in Xinjiang's capital city of Urumqi, is the biggest tomato processor in China.

"Everyone tried to figure out what ketchup was at that time," Qin said. "But now ketchup is becoming quite popular."

Qin said the company got "inspiring results" after doing some market research. In the past three years, the consumption of domestic tomato products saw an annual increase of over 15 percent. In 2011, the domestic sales of tomato products were at about 190,000 tons.

In China, the average annual consumption volume of tomato sauce is 0.6 kg per capita, far less than the 20 to 30 kg in European and American countries.

"If the Chinese population decides to start consuming more tomatoes, it could be very lucrative for everyone," said John Nestvogel from J.G. Boswell Tomato Co in the United States.

He predicted that processed tomato products are going to become more desirable for the population as the economy is growing fast. People are working hard so convenience becomes more important, he added.

However, developing the Chinese market is still challenging, as most Chinese are still used to fresh tomatoes.

"Tomatoes are very popular in Xinjiang food. We are used to tomatoes in soups and noodles. And a simple salad of sliced tomatoes with some granulated sugar is a great summer dish," said Tao Lian, a housewife from Urumqi.

"But I prefer fresh tomatoes to ketchup. I only use ketchup in winter," she said.

The next step for COFCO Tunhe, according to Qin, is to convince domestic consumers to eat more tomato-based products.

Currently, over 90 percent of the tomato-based products made by COFCO Tunhe are exported.

In 2011, the value of Chinese tomato products exports reached $1 billion, representing over 30 percent of the world's export market.

California in the US and the Mediterranean area in Europe are the other two big exporters.

"Eighty-five percent of what we grow stays domestic. So we are not exposed to export fluctuations as China is. China relies heavily on the export market," Beecher said.

"The industry in China is developing and just at the start-up, while in California we've been growing tomatoes for over 70 years. I think that continuous investment in infrastructure and production technology are badly needed for the development of Xinjiang's tomato industry," he added.