Mike Chapman NZKGI Chief Executive

Last month I was able to see first-hand the potential for New Zealand’s fruit and vegetable exports to Asia during a week in Hong Kong that included attending Asia Fruit Logistica.

This is an enormous expo, from September 7-9, which attracts more than 9000 buyers and visitors to see 65-plus exhibitors from 37 different countries, including a strong New Zealand showcase.

I also visited local Hong Kong markets to observe, at the consumer level, how fruit and vegetables are displayed to match buyer preferences.

Consumers in Asia focus on healthy eating, and are keen on organics, exotic fruits and small vegetables that have some novelty factor.

New Zealand fruit and vegetables were exported to 125 countries in 2015. The top five markets in order of size were Australia, the Unites States, Japan, the United Kingdom and, for the first time, China. These five export markets accounted for more than $2.58 billion in sales, an increase of $130 million from 2014.

While Japan is the largest importer of New Zealand’s fresh vegetables and a significant market for fruit, there is wider potential in Asia for both our fruit and vegetables. Given the sheer size of its population – at 1.3 billion people – and a growing middle class, there is a focus on China as an export market.

Asian neighbours

There is also potential to further expand in markets such as South Korea and Taiwan, and in developing markets such as Thailand, Vietnam and the Philippines.

We are seeing New Zealand export volumes decrease in our traditional markets of the United States and Europe, and increase throughout our closer Asian neighbours.

Consumer demand in Asia centres is on healthy eating, and there’s a growing appetite for organics and exotic fruit and small vegetables that have some novelty factor. Attractive packaging is very important for making sales at premium prices. As cellphone and internet technology continues to be adopted by many people in Asian countries, e-sales are rapidly increasing and present new channels for exports.

While consumer demand is high for quality fruit and vegetables, one of the biggest problems facing New Zealand exporters is market access – that is, agreement for our products to enter the market, from the countries we want to export to.

Free trade

The New Zealand Government has made significant gains with Free Trade Agreements, but access remains critical to increasing horticulture’s export performance in Asia. Fruit exports have benefited from the Taiwan FTA, kiwifruit from the Korean FTA and buttercup squash, traditionally reliant on Japan, should also start to benefit from recent trade agreements with China, Taiwan and South Korea.

For horticulture there are real tariff benefits, totalling about $26 million per annum, from the Trans-Pacific Partnership Agreement. New Zealand apples, kiwifruit, buttercup squash and onions will be the big winners when the TPPA comes into force. For kiwifruit growers, this is worth about $6000 a year for each grower. 

Asia Fruit Logistica was a great place to see just what is on offer in horticulture on a global scale; and to get an understanding of what different Asian markets want and will pay for. The trade stands covered an area equivalent to three rugby fields.

Fresh and good quality fruit and vegetables are in high demand in Asia and as affluence increases, more consumers are able to pay for that quality. To secure successful sales at a premium, exporters need to focus on consistency in supplying that quality.

Attending such events is invaluable for both established and new, or aspiring exporters.

The views expressed in this article are those of the author.