all-postsblog

Fresh vegetable exports to China from Australia

Fresh vegetable exports to China from Australia

Australia is a world leader in growing technology and invests heavily in research and development (R&D), which has led to increased crop yields and farms where less and less human labour is required. However, Australia will never be able to compete with local Chinese vegetable production regarding labour and production cost. As such, a greater focus should be placed on differentiating Australia’s products, allowing Chinese markets to be secured using factors other than price.

Chinese women are an important demographic group as far as food consumption is concerned. It is estimated that women in China hold about 60% of spending power and that they determine 78% of daily purchases in households. Research shows that 83% of Chinese middle-class consumers are willing to pay more for safe food products. This is a clear opportunity for Australian vegetable exporters, who while not competitive on price, are able to market their products with a safety guarantee to Chinese middle-class consumers.

The value of Australia’s fresh vegetable exports is rising more than 60 per cent over the past five years. Australian fruit exports to China have grown fivefold in just four years, and there is ample opportunity to ramp up exports of vegetables into Asia, according to a new ANZ report.

 The top export markets for locally grown fresh vegetables are Singapore, the United Arab Emirates, Japan, Malaysia and Hong Kong. Carrots are the star performer, with exports increasing to 110,000 tonnes last year at a value of $91 million. Onions and potatoes are the second and third most popular vegetables exported.

Expert say that the industry had performed solidly in recent years and yet was too often compared with fresh fruit export sales, which exceeded $1 billion last year off the back of strong sales to China, Hong Kong, Japan and Korea.

International market access also makes comparisons problematic as few vegetables have market access to China, which has been the backbone of fresh fruit sales for top performing categories such as citrus and table grapes. Also, Australia’s high cost of labour makes it harder for vegetable growers to compete on an international stage. One of Victoria’s biggest carrot growers, Rocky Lamattina & Sons, which grows on 2430ha in Wemen, 75km southeast of Mildura, exports its produce only when global prices are high enough to cover production costs.

The national vegetable industry is aiming to increase the value of fresh exports to $315 million by 2020 to capitalise on a growing middle class in Asia and the Middle East and to reduce reliance on a competitive domestic market.

 

 

ANZ’s head of agribusiness, Mark Bennett, said this was a boon for local growers, as these markets were some of the highest paying for Australian fresh fruit and vegetables.

“The rise of the Asian middle class and associated increase in demand for meat and protein is well documented,” Mr Bennett said. “The impact on demand for fresh fruit and vegetables is equally as exciting an opportunity for Australian exporters.”

The report says the biggest hurdle for Australian vegetable exporters looking towards Asia is a lack of quarantine protocols, particularly with China. Australia has protocols into the country for the importation of almonds, citrus, table grapes, cherries, Tasmanian apples, lettuce, asparagus and, more recently, stone fruit.

Federal Agriculture Minister David Littleproud said “More than ever before people are interested in where their food comes from and how it is produced. Australia stands to benefit as a producer of high quality, highly sought-after produce,” he said.