Pipfruit sector told to lift its game in Asia
Asia has overtaken continental Europe as New Zealand's largest pipfruit market but the industry has to do a much better job growing and marketing fruit to maximise the huge opportunities there.
That was the overriding message delivered to delegates at the Pipfruit New Zealand conference last week.
Keynote speakers such as Plant Market Access Council chairman Russ Ballard and business performance consultant Bryan Travers made it clear the industry had to lift its game to achieve growth targets.
There was a lack of leadership, too much competing with each other rather than taking a New Zealand Inc approach, investment in supply chains and export markets was low and spending on consumer research minimal.
Much of this growers and exporters have heard before, but it was delivered with greater urgency.
Pipfruit New Zealand chief executive Alan Pollard set the tone by saying it was clear the shift from traditional markets in Europe to Asia was a structural one that was gathering pace.
This season just under 33 per cent of our apple exports had gone to Asia compared with 28 per cent to continental Europe, a big change from last year when Asia took 27 per cent and Europe 35 per cent, he said. Exports to Britain accounted for 16 per cent, about the same as last year.
Within Asia, India had shown significant growth despite a 50 per cent tariff, with the market having grown from 4.9 million kilograms in 2008 to 17.8 million kg so far this season, he said. Growth alone this year was up 48 per cent on last season.
Exports to Japan had also jumped in the wake of the tsunami and earthquake there with the number of containers rising from seven last year to 90 this season, while trade to Thailand and Indonesia was also growing significantly.
Newly elected board member and former chief executive Peter Beaven said the industry had to concentrate on Asian and Middle Eastern countries, with their burgeoning populations, increasingly wealthy middle classes and strong economic growth rates. They had the added advantage of being closer to home and cheaper to ship to, and they provided fixed price returns rather than the uncertain consignment selling that prevailed in Europe and other traditional markets.
However, he cautioned that Asian markets could not be treated all the same. Relationships were often more difficult to develop and there were many market access issues to overcome.
Unlike the rest of Asia, Taiwan had not been a success story, with exports falling from 1 million cartons last year to 650,000 this season in the face of increasing competition from the United States and Chile and problems over fruit supply and quality, he said.
During an exporters panel discussion on global diversification, Fern Ridge Produce managing director Hamish Davis said the surging Indian market risked being ruined by too many exporters supplying fruit of varying quality.
While exporters had resisted a Horticultural Export Authority model for the Australian market, some structure was needed for India before it became another Europe, he said.
There was a similar warning from Jono Wiltshire of Apollo Apples about Southeast Asian markets. Competitive pricing among exporters only succeeded in lowering returns to growers.
He also took a swipe at New Zealand's free trade agreement with China, saying it had done nothing for the industry, and he feared something similar would happen with India.
Another exporter, Darren Drury of Delica, agreed that the benefits of the Chinese agreement had yet to materialise and getting direct access for apples remained very difficult.
Murray Tait of Te Mata Exports said there were big opportunities in the Middle East, where apple exports had grown by 50 per cent since 2005 to 835,000 cartons. But, as in other markets, timing was crucial because selling windows were short and the industry had to do more to supply fruit when it was wanted.
"We have still got this propensity to force fruit down our customers' throats because it suits us to get it out of our coolstores."
- © Fairfax NZ News