Considering that fruit and vegetables from around the globe can reach the UK in 24 hours or less, it is unsurprising that a number of overseas players are hoping to build on their existing opportunities.
Thailand, Vietnam and Malaysia are well known for shipping baby corn, dragon fruit and starfruit to the UK and Europe, and producers in these South East Asian countries are hoping to further bolster ties with the region. While some sources are confident that further growth can be achieved this year, others are focusing on the prevailing economic climate and have decided to err on the side of caution.
Waiyawut Nisapakultorn, secretary generalof the Thai Fresh Fruit and Vegetable Producers’ Association, reports “average demand” for Thai fresh produce in the UK and Europe over the last 12 months.
The higher cost of inputs and production, the appreciation of the Thai baht against western currencies towards the end of 2007 and an increase in airfreight fuel charges all took their toll.
Furthermore, exporters could face challenging trading conditions, especially as consumer spending is becoming more cautious. “Exporters will have to react quickly and be more proactive in order to survive,” Nisapakultorn tells FPJ.
A significant proportion of Thai produce is destined for Asian communities in Europe where acceptance has already been gained, although baby corn is viewed as a mainstream product.
This year, the Thai Fruit and Vegetable Producers’ Association plans to continue working closely with its members, as well as Thai government agencies and departments. Other priorities include offering training in food-safety standards and encouraging producers to gain HACCP implementation.
Nisapakultorn warns that 2008 may not be one of the most promising trading years, but food safety and rising quality standards will be important issues as Thai exporters look to maintain and hopefully expand their positions in the UK and Europe.
Meanwhile, Munich airport is set to become a pan-European distribution hub for Thai-origin fresh produce. Munich airport’s operating company, FMG, and its cargo handling subsidiary, Cargogate, have signed a Memorandum of Understanding (MoU) with Thai Airways Cargo and the Thai Airfreight Forwarders’ Association.
Although details of the deal remain sketchy, what remains clear is that Thai growers have ambitious plans. The country’s exports are expected to rise by 12.5 per cent this year, generating some $165-169 billion (£84-86.6bn). Strong demand from Europe, Japan and the US has been attributed to growth in Thai exports.
Malaysia is also keen to make its mark, and the country’s Federal Agriculture Marketing Authority (FAMA) has announced plans to double the country’s agricultural exports to 30 per cent under the Ninth Malaysia Plan.
Key points of the plan include increasing agriculture production, expanding agriculture-based processing activity and product diversification, strengthening the marketing and global network and increasing the income of smallholders and farmers.
Malaysian marketers are making the most of Germany’s interest in its exotic starfruit. The Malaysia External Trade Development Corporation (MATRADE) already has an office in Cologne, and exporters
can organise roadshows and other events to gain further exposure for the country’s treasures.
As with other South East Asian countries, the Philippine government is keen to attract overseas attention. More Philippine producers and exporters are participating in food exhibitions and trade shows in both Europe and Asia.
Philippine agriculture enjoyed a comeback in 2007, with farm output rising 4.68 per cent last year, according to agriculture secretary Arthur C Yap. The rise was in line with government predictions, which had forecast a growth range between 4.5 to five per cent.
Crops contribute more than 47 per cent to total agricultural output, and the department of agriculture has attributed part of the agriculture upsurge to its five-point farm agenda.
Initiatives include higher investments in irrigation and other infrastructure; post-harvest facilities; research and development and agricultural extension work; rural credit, and the opening of more local and international markets for local produce.
The Philippines is also working on its floral sector, and is keen to gain greater business from overseas markets. In recent years, the Philippines has exported cut flowers to a number of European markets including the Netherlands, Italy and Spain.
Elsewhere, Vietnam has been eyeing Europe for a number of years and has enjoyed success with its dragon fruit. However, the majority of the country’s fruit is sold in China and traded at border gates, where it fetches unsatisfactory prices.
Nguyen Thuan, vice-chairman of the Dragon Fruit Association in Binh Thuan province, says that Vietnamese producers should work together to improve fruit quality so that the country’s exotic fruit can be exported overseas.
Recently, the Binh Thuan-based Ham Minh dragon fruit co-operative has attained GlobalGAP accreditation. Dragon fruit is grown mainly in the Tien Giang and Long An provinces in the Mekong Delta, and Binh Thuan province in the central region.
According to a Vietnamese official in the ministry of agriculture and rural development, Vietnam needs help with its fruit exports. “The industry needs to make major changes to be able to compete globally,” says Dinh Van Huong, chairman of the Vietnam Fruit Association.
A poor distribution network, inadequate processing technologies and post-harvest facilities, coupled with a lack of organisation, are some of the problems hampering exports. Poor knowledge of quality standards for exports to the EU, the US and Japan is further exacerbating the situation.
The ministry of trade claims it will designate some regions exclusively for fruit exports, seek investments in infrastructure, and provide financial assistance for setting up international co-operation and trade centres.
The International Fund for Agricultural Development (IFAD), a UN agency, has also announced it will spend $100 million over the next five years to help farmers in Vietnam overcome the adverse effects of climate change.
Although climate change is not new, IFAD president Lennart Bage says its effects are increasing in frequency and intensity. A significant proportion of Vietnam’s agricultural land lies along the coast, and is at risk from sea-level rises and tropical storms. The money will be spent on improving infrastructure, including dams, roads and dykes.
Furthermore, IFAD wants to boost agricultural productivity, improve farmers’ incomes and build a resilient rural community in Vietnam.
Overseas investment in Vietnam could also bring some cheer, and this year, investment could reach $500m, up 20 per cent on 2007, according to recent predictions. Agriculture projects account for some 36 per cent of the total number of projects and 40 per cent of capital.
So, despite the challenges, Vietnam is hoping to reap $350m from fruit exports by 2010, according to the Vietnam Fruit Association. Vietnam produces some six million tonnes of fruit, but hopes to raise this figure to 9mt by 2010.
UK importer Dhillon Farms handles fresh produce from a wide range of countries including India and China.
“Exports to the UK are increasing as global production rises,” says Harinder Singh, manager of Dhillon Farms. “Quality is improving all over the world - competition is fierce and everyone is trying to make their fresh produce as competitive as possible.”
While South East Asia has big plans in place, critics say that it is unlikely to reach the dizzying heights achieved by the powerhouse that is China. Mainland apples, pears, pomelos and garlic are already a mainstay feature on UK retail shelves, but 2007 was noticeable for its higher prices for certain products.
Although sources say the Chinese pear deal remained largely unaffected, it was a different story for Fuji apples. As China competes head-on with European production, mainland fruit was deemed expensive this season compared to European production.
“China is doing everything possible to become a global produce player under difficult circumstances,” says Capespan’s Rod Hill. “Exporters need to know the reality of the export market.”
Higher freight costs, poor autumnal weather and domestic consumer unrest over the higher prices of produce proved challenging in 2007.
But for those remaining sceptics, who believe that the quality of Chinese produce is inferior to other world players, officials are embarking on initiatives to turn this opinion around.
Last year’s Chinese Quality Inspections meant that export controls were tightened considerably. This was achieved by restricting shipments to registered orchards and by increasing the inspection of export containers.
“The controls introduced to ensure food safety, resulting in increased confidence in Chinese produce, should be applauded, as it will take the opportunistic exporters out of the game,” Hill says.
Meanwhile, a number of Chinese companies are also putting in place new measures for 2008. Jinzhou Cici Co Ltd has been exporting Chinese top fruit to the UK and Europe for almost a decade, and this year the producer will invest in a new packhouse and cold rooms, says the company’s Jack Guo.
“The new cold rooms will be able to store 5,000t,” he tells FPJ. “In the packhouse, we’ll handle about 100t of fruit a day.”
The internet has also proved to be an incredibly useful business tool for Chinese companies looking to do business in the UK. Shandong province-based producer Laiwu Yukang Foodstuff produces ginger, garlic and green Chinese onions. The company has been exporting to the UK and Europe for about a year and believes that supplying mature markets is both an opportunity and a challenge.
Despite the slightly shakier economic climate in 2008, Jin Jin Europe is expecting “normal production and exports”, says the company’s Willem Kokkeel. “We will increase our plantings significantly this season, mainly due to our larger customer accounts, as well as introduce more varieties in our assortment,” he tells FPJ.
With more producers looking to raise their export profile, Asian tigers are prepared to be patient and will certainly keep their eye on the prizes Europe has to offer.
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