Canned food, which is not very popular in China, has had a second spring abroad this year.

Several canning factories in Fujian, Guangdong, Xinjiang and other regions have informed the Red Star Capital Bureau that there has been a significant increase in foreign trade orders this year.

According to statistics from Zhengzhou Customs, in the first four months of this year, Henan Province exported 3.1 billion yuan of canned vegetables, an increase of 111.8%. According to data from Jieyang Customs, in the first quarter of 2023, 1959.5 tons of canned sweet corn were exported under the supervision of Jieyang Customs, a year-on-year increase of 279.3%.

For the reason for growth, some practitioners believe that logistics have become smoother after the optimization and adjustment of epidemic prevention and control policies; Some practitioners also expressed that it is related to the significant increase in prices in some European countries.

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Canned food exports are facing growth

The export volume of canned vegetables in some provinces doubled in the first four months

Zishan Group is located in Zhangzhou, the "Canned Capital of China". Its canned products such as asparagus and mushrooms are exported to more than 60 countries and regions such as Europe, America, Japan, Southeast Asia, and Russia. The company's business personnel told Red Star Capital Bureau that the order volume has increased by over 5% since the beginning of this year.

"There has indeed been an increase in orders this year," Ms. Zhao (pseudonym), a financial staff member of Xinjiang Baolu Food Co., Ltd. (hereinafter referred to as "Baolu Food"), told Red Star Capital Bureau. Baolu Food is a company specializing in canned tomatoes. According to Ms. Zhao, the company's products are mainly exported to countries such as Yemen and Saudi Arabia.

Ms. Li, a staff member of a canned food production enterprise in Jieyang, Guangdong, told the Red Star Capital Bureau that this year's foreign trade business is "definitely better" compared to the previous two years. According to Ms. Li, the company's main export product is canned corn. Recently, it has reached the corn ripening season, and the company is working overtime to produce canned corn.

According to data from Jieyang Customs in Guangdong Province, where Ms. Li's company is located, 1959.5 tons of canned sweet corn were exported under the supervision of Jieyang Customs in the first quarter of this year, a year-on-year increase of 279.3%.

The export of canned goods from Henan Province, a major agricultural province, has also seen growth. According to statistics from Zhengzhou Customs, in the first four months of 2023, Henan Province exported 3.1 billion yuan of canned vegetables, an increase of 111.8%.

According to CCTV news, in the first two months of 2023, China exported a total of 523300 tons of various canned goods, with an export value of 1.22 billion US dollars, an increase of 10% and 23% year-on-year, respectively.

Maritime recovery and demand growth

Why are canned food more popular this year?

It is worth noting that China is already the largest producer and trader of canned goods internationally, and there has always been a habit of consuming canned goods overseas. "Canned food is a daily consumer good overseas, and foreign consumers are already very accustomed to eating canned food," said a salesperson from Zishan Group.

Why is there a significant increase in canned food exports this year? Ms. Zhao from Baolu Food believes that after the optimization and adjustment of epidemic prevention and control policies, logistics transportation has become smoother and order volume has increased.

Ms. Li also told the Red Star Capital Bureau, "Previously, sea freight rates were extremely high, and even higher than the value of the goods, which will inevitably affect product exports. This year, transportation has basically returned to the level of 2019."

The Red Star Capital Bureau reported in December 2021 that the Baltic Dry Index (BDI), which reflects spot rates, has been bullish since June 2020. According to the Global Baltic Container Freight Index (FBX), on November 26, 2021, the Asia to West Coast Freight Index (FBX1) rose to $14677, a tenfold increase from 2020.

At that time, there were no factors such as empty containers and rising shipping costs, which caused many orders to accumulate in the warehouse for one or two months or even longer.

Starting from 2023, FBX and FBX1 have gradually returned to pre pandemic levels. In the past three months, the highest price for FBX1 was $1725 and the lowest was $1008. On May 26th, FBX1 was priced at $1309.

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Regarding the increase in order volume, Ms. Wang, the head of Baolu Food Trade Business, told the Red Star Capital Bureau that the main reason is "inflation in Europe and rising prices."

It is understood that some European countries saw a significant increase in vegetable prices at the beginning of this year. On March 11th, netizens posted to Ms. (pseudonym) that the price of French tomatoes had risen to 5.99 euros per kilogram. Ms. Ji (pseudonym), a netizen with an IP address in France, commented under the post on March 12th, "Now I have canned vegetables and can buy whatever is cheaper."

In addition to price increases, some countries have also experienced vegetable shortages. Ms. Fan, a netizen who claimed to be studying in London, UK, told Red Star Capital that there was a shortage of fresh tomatoes in April, mainly replaced by canned tomatoes.

According to Xinhua News Agency, the Consumer Price Index (CPI) in the UK rose 8.7% year-on-year in April this year, higher than market expectations of 8.2%. Grant Fitzner, Chief Economist of the UK Office for National Statistics, said that the annual increase in food prices is still close to the highest in history. According to China News Agency, the Consumer Price Index (CPI) in France increased by 5.9% year-on-year in April, and the prices of fresh ingredients increased by 10.2% year-on-year in April.