China-CAN Agricultural Trade: Situation And Prospect

Andean Community (CAN), is a trade cooperation among five South-American countries, these include: Bolivia, Colombia, Ecuador, Peru and Venezuela. Since its inception the cooperation has continued to strengthen its international market integration, more so over the last decade.Even though China and CAN are both developing countries, fast economic growth in China calls for the attention of all countries around the world. CAN because of the position hi the south pacific region also tries to identify China as a potential trade partner with a view of ultimately decreasing dependence on the USA and European markets for agricultural products from CAN region.This study was an attempt to assess the agribusiness relation between these two regions, if there is any; with the object of bringing-out the prospects and potentialities for the purposes of mutual trade benefits for these regions.Agricultural production (of main crops) in Andean countries for example, has increased considerably in the last decade, with the exception of green coffee, cotton lint and sisal which registered remarkable decrease. During the period 1994-2000, coffee, bananas, cut flowers, sugar and soybeans (and soybean products), were the main agricultural export from CAN, with coffee, bananas and cut flowers taking a prominent portion of the export. The USA and European countries were the principal markets for these products. On the side of agricultural imports, cereals, fodder products and animal products were the most important; these products mostly originated from American countries.Over the same period (last decade) agricultural production in China has concomitantly shown tremendous increase. With the exceptions of rice and wheat production that did show no significant changes, vegetables, meat products and cereals (maize) were the main agricultural exports. Cereals (wheat), textile fibres, oil-bearing crops and vegetables oils were the most main agricultural imports. Exports have been concentrated in the Asian Market, especially in Japan, Hong Kong and Korea, while imports were less concentrated, showing a more evenly distribution from all regions except for Africa.Agricultural policies of China focus self sufficiency and accessing the World Trade Organization (WTO) created opportunities, while on the other hand policies of CAN has been focused at integration of CAN and stabilization of prices of main agricultural products for the regiorTheoretically, potential exports from CAN to China could be at least in products such coffee, bananas, cocoa beans and sugar, however only exports of bananas has shown some level of success. On the side of China, products with export potential to CAN could be at least include garlic, dry beans, mushrooms, apples, pig meat, rice and pears, however, only garlic, dry beans and mushrooms has found a place in the Andean market. This failure to explore the full potentials can be attributed to long distance, transportation cost and large delivering time which have impacted negatively in the competitiveness of all products against products of neighboring countries.