China first became a net exporter of Frozen French Fries (FFF) in MY 2021/22, and this trend is projected to persist given a nearly doubling of FFF production capacity.

Marketing year (MY) 2022–2023 Chinese frozen French fries (FFF) exports are anticipated to be 84,000 metric tons (MT), up around 12% from the previous year.

“Driven by strong demand from neighboring countries, China’s MY 2022/23 FFF exports are estimated at 84,000 MT, a 12% increase from 74,648 MT in MY 2021/22. According to China Customs data, China’s FFF exports in MY 2021/22 totaled 74,648 tons, a 56% increase from MY 2020/21, mainly driven by the strong demand from the Philippines, Japan, Indonesia, Thailand, and South Korea,” according to a common United States Department of Agriculture (USDA) and Global Agricultural Information Network (GAIN).

Based on the CH2022-0124 Voluntary Report, these countries previously imported FFF from the U.S. and Europe. However, disruptions in logistics and short FFF supply from the U.S. have led buyers to favor closer suppliers.

Industry sources cited by USDA-GAIN experts expect that China’s domestic FFF production will increase significantly with the four new FFF processing lines, which are expected to be in full operation by MY 2023/24.

China is expected to be a major FFF supplier in Southeast Asia. At present, China’s FFF is price competitive with U.S. FFF. According to the Philippines’ Statistics Authority (Trade Data Monitor), the Philippines’ average FFF import price from China was USD922/MT in the first six months of 2022; while it was USD1,128/MT from the U.S.

China is Doubling its Overall FFF Production Capacity

The PRC’s MY 2022/23 FFF production is estimated at 400,000 MT, a slight decrease from 410,000 MT in MY 2021/22 on lower fresh potato quality. Based on industry sources, most FFF processors expanded contracted potato acreage in early 2022 to meet increased domestic demand for FFF. However, the expansion in acreage will be offset by the lower quality of fresh potatoes. FFF domestic production uses less than 1% of total fresh potato production.

According to industry reports, four new FFF production lines will be put into production from July to September 2023. The total production capacity of the new lines is expected to reach an additional 400,000 MT, doubling overall production capacity. The significant increase in production capacity is to meet growing domestic demand as well as growing export demand.

Over the last few years, FFF imports have dropped sharply due to the COVID-19 pandemic and logistics disruptions. The PRC’s FFF producers have expanded domestic production capacity as imports declined and domestic demand increased. Meanwhile, some major FFF producers have plans to increase exports to Southeast Asian countries affected by logistics disruptions and supply chain issues.

China’s FFF Consumption Will Increase

Industry contacts have shared that FFF consumption will continue to increase as urbanization and fast-food restaurants expand. According to media reports, Yum China Holdings (a major operator of quick service restaurants) opened more than 1,200 new stores in China in 2021 and expects to open 1,000-1,200 new stores in 2022.

McDonald’s goal of reaching 4,500 total stores in the PRC by the end of 2022 was achieved ahead of schedule in the first quarter of 2022. The PRC’s domestic fast-food stores are also developing rapidly. Wallace (a local fast food chain brand in China) has more than 20,000 stores across the country, with rapid expansion in third and fourth-tier cities due to competitive prices.