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PRODUCE MARKETING ASSOCIATION
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PRODUCE MARKETING ASSOCIATION
The Next Frontier: Exploring New Opportunities in China
Richard Owen, Produce Marketing
Association
Fresh Connections:Southern Africa Conference & Expo
PRODUCE MARKETING ASSOCIATION
What to expect from this session:
• Snapshot of the vast China market• ‘Size of the Prize’• Import opportunities • E-commerce growth
• Perspective of South African companies working in the Chinese market• Jason Bosch, Origin Direct Asia• Cecilia Landman, The X-Group
• Panel discussion
PRODUCE MARKETING ASSOCIATION
Global Trade Flow Shift – Past 10 YearsSignificant growth 2011-2015
Growth in trade is toward Eastern Hemisphere
2005 Flows
Source: International Trade Centre (ITC) 2005-2015
PRODUCE MARKETING ASSOCIATION
Top Fresh Produce Markets & Share of Imports
U.S.+0%
EU-8%
China+5%
Southeast Asia+1%
Japan- 1%
Russia+1%Canada
+0%
Source: FAOSTATS Fruits and Vegetables 2004-2013
Global fresh produce imports (US$ 121B) averaged +4% growth annually last 10 years
PRODUCE MARKETING ASSOCIATION
Fresh Produce Consumption Growth by Region 2016-2020
(As percentage of world growth)
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
0.00
200,000.00
400,000.00
600,000.00
800,000.00
1,000,000.00
1,200,000.00
Asia Pacific MiddleEast and
Africa
WesternEurope
LatinAmerica
EasternEurope
NorthAmerica
Australasia
2015 Fresh Produce Consumption 2016-2020 Forecasted CAGR
Asia Pacific and Middle East & Africa are growing consumption regions
Source: Euromonitor International
PRODUCE MARKETING ASSOCIATION
Regional Share of International Trade Now…and in 2050
2016 2050
Source: Oxford Economics
PRODUCE MARKETING ASSOCIATION
Fruit Imports by Country (million USD)
0 400 800 1200
Australia
South Africa
Peru
Ecuador
New Zealand
USA
Philippines
Vietnam
Chile
Thailand
Mainland China
201520142013
Source: China Customs
PRODUCE MARKETING ASSOCIATION
Total Fruit Imports: Mainland and HK
2.7
1.5
3.4
1.6
3.8
1.6
China Hong Kong
Volume (million tons)2013 2014 2015
3.4
1.7
4.3
2.2
5
2.2
China Hong Kong
Value (billion USD)2013 2014 2015
Source: China Customs, HK Customs
PRODUCE MARKETING ASSOCIATION
Mainland Top 10 Fruit Imports by Value
Bananas21%
Cherries18%
Grapes16%
Durians16%
Kiwi7%
Guavas, Mangoes,
Mangosteens7%
Oranges5%
Apples4%
Plums, Prune Plums, Sloes
3%
Pineapples3%
Source: China Customs
Share change comparedto 2014
Cherries: +1.85%Guava/Mango/Mangosteen: +1.58%Plum/Prune: +1.26%Kiwi: +1.19%Orange: +1.12%Pineapple: +0.81%Grape: -2.81%Durian: -3.01%Banana: -4.11%
PRODUCE MARKETING ASSOCIATION
Growth Leaders (million USD)
Fruit 2014 2015 GrowthRaspberries, Blackberries,Mulberries, Loganberries 0.02 0.6 2888.0%
Avocados 11.9 45.1 279.7%
Apples 46.4 146.7 216.6%
Plums, Prune Plums, Sloes 51.8 105.2 103.2%
Blueberries 40.8 68.1 66.9%
Pineapples 58.2 96.2 65.3%
Oranges 108.8 165.3 52.0%
Guavas, Mangoes, Mangosteens 177.2 260.2 46.8%
Kiwifruit 195.4 266.6 36.4%Source: China Customs
PRODUCE MARKETING ASSOCIATION
Growth of Fresh E-commerce in China
91 Billion RMB/183 Billion
Rand
Source: Produce Report
PRODUCE MARKETING ASSOCIATION
Why you cannot afford NOT to be in China
Cecilia Landman – The X Group
August 24, 2016
Fresh Connections:Southern Africa
PRODUCE MARKETING ASSOCIATION
Why you cannot afford NOT to be in China!• Information about the size of the market, GDP• China’s own production & World production• SA Citrus industry information• Information shared will be mainly based on citrus
Some market information and lessons learned• Market Segments• Quality• Branding
Points of discussion
PRODUCE MARKETING ASSOCIATION
World population & Growth Rate& % of world population
Source: Worldbank.org
Canada33.990 0.9%
0.45%
Russia146.300
0.2%1.92%
United States321.570
0.8%4.35%
EU Area509.472
0.2%6.84%
Africa1.2 Billion
2.3%16.12% India
1.254 Billion1.2%
17.85%
China1.371 Billion
0.5%18.58%
South America422.5340.98%5.68%
PRODUCE MARKETING ASSOCIATION
GDP Growth Rate: Annual % 2005 - 2015
Source: Worldbank.org
-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Euro Area China India Russia
PRODUCE MARKETING ASSOCIATION
GDP Growth Rate: Per Capita
-10
-5
0
5
10
15
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
GDP Per Capita Growth Rate % 2005 – 2015
United States Euro Area China India Russia
Source: worldbank.org
PRODUCE MARKETING ASSOCIATION
GDP per Capita
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015United States 44,307.83 46,437.11 48,061.42 48,401.49 47,001.43 48,377.39 49,803.49 51,495.87 53,041.98 50,662.40 51,486.00Euro Area 30,000.00 37,862.53 38,817.88 38,812.75 36,930.11 37,604.27 38,113.52 37,865.26 37,454.89 37,806.28 38,341.20China 1,731.13 2,069.34 2,651.26 3,772.88 3,748.50 4,433.34 5,447.31 6,092.78 6,807.43 6,032.61 6,416.18India 740.11 830.16 1,068.68 1,193.21 1,147.24 1,417.07 1,539.61 1,503.00 1,498.87 1,698.93 1,805.57Russia 5,338.41 9,687.50 10,532.34 11,089.94 10,219.53 10,675.00 11,121.52 11,493.41 11,615.71 11,490.87 11,038.82
0.00
10,000.00
20,000.00
30,000.00
40,000.00
50,000.00
60,000.00
Source: tradingeconomics.com.
PRODUCE MARKETING ASSOCIATION
China – Middle Income group growth
PRODUCE MARKETING ASSOCIATION
World Production/Exports (Volume) – Oranges
Source: Production, Trade and Regulation Statistics: Fruit
19,8
11.0
0
11,8
48.5
0
8,07
8.50
4,57
1.00
4,07
9.70
2,81
8.90
2,57
7.70
2,46
9.90
1,81
8.90
1,73
0.10
1,49
5.30
33.3
0
310.
90
752.
00
28.0
0
16.5
0 1,52
6.60
1,04
2.30
135.
40
0.00 36
6.30
975.
50
B R AZ I L C H I N A U N I TE D S TATE S
I N D I A M E X I C O S P AI N E G YP T I TAL Y I N D O N E S I A TU R K E Y S O U TH AF R I C A
Production Exports
0.17% 2.62% 9.31% 0.61% 0.40% 54.16% 40.44% 5.48% 0.00% 21.17% 65.24%
PRODUCE MARKETING ASSOCIATION
World Production/Exports (Volume) -Grapefruit
Source: Production, Trade and Regulation Statistics: Fruits
7,13
8.90
1,14
6.70
415.
50
397.
30
305.
00
219.
00
196.
00
189.
20
184.
30
183.
70
306.
10
225.
70
214.
80
17.0
0
13.4
0
158.
10
0.80
10.2
0
0.00 59.6
0
C H I N A U N I TE D S TATE S
S O U TH AF R I C A
M E X I C O TH AI L I AN D TU R K E Y I N D I A AR G E N TI N A S U D AN I S R AE L
Production Exports
4.29% 19.68% 51.70% 4.28% 4.39% 72.19% 0.41% 5.39% 0.00% 32.44%
PRODUCE MARKETING ASSOCIATION
World Production/Exports (Volume) – Lemon & Limes
4,61
3.80
2,14
7.70
2,10
8.00
1,22
8.70
1,12
6.70
834.
60
790.
20
736.
20
560.
10
483.
10
260.
10
27.5
0 469.
70
24.7
0
255.
10
66.5
0
111.
00 487.
00
480.
80
33.4
0
41.4
0
165.
00
C H I N A M E X I C O I N D I A AR G E N TI N A B R AZ I L U N I TE D S TATE S
TU R K E Y S P AI N I R AN I TAL Y S O U TH AF R I C A
Production Exports
Source: Production, Trade and Regulation Statistics: Fruits
63.44%20.76% 5.9% 13.3% 65.31%
PRODUCE MARKETING ASSOCIATION
World Production/Exports (Volume) -Tangerines
25,1
61.0
0
2,11
7.10
1,00
4.70
928.
20
872.
30
863.
50
848.
10
800.
00
753.
00
680.
50
148.
602,14
5.00
1,59
0.30
0.90
2.60 47
0.90
112.
90
16.1
0
7.40 34
8.50
2.90
107.
80
C H I N A S P AI N B R AZ I L J AP AN TU R K E Y I TAL Y E G YP T I R AN M O R O C C O K O R E A S O U TH AF R I C A
Production Exports
Source: Production, Trade and Regulation Statistics: Fruits
8.53% 75.12% 0.9% 0.28% 53.98% 13.07% 1.9% 0.93% 46.28% 0.43% 72.54%
PRODUCE MARKETING ASSOCIATION
World Production/Exports (Volume) - Apples
Source: Production, Trade and Regulation Statistics: Fruits
71,9
71.7
0
4,27
5.10
2,89
1.00
2,68
0.10
2,49
3.10
2,41
1.20
1,85
7.30
1,84
3.00
1,58
8.30
1,33
9.00
781.
10
3,14
1.10
833.
20
25.7
0
87.3
0
532.
10
976.
10
726.
60
132.
70
801.
20
48.7
0
333.
40
C H I N A U N I TE S S TATE S
I N D I A TU R K E Y P O L AN D I TAL Y F R AN C E I R AN C H I L E B R AZ I L S O U TH AF R I C A
Production Exports
PRODUCE MARKETING ASSOCIATION
World Production/Exports (Volume) - Pears
Source: Production, Trade and Regulation Statistics: Fruits
31,7
40.0
0
926.
50
876.
10
691.
30
502.
40
386.
40
350.
50
334.
80
312.
80
290.
50
1,18
3.30
162.
80
178.
20
472.
40
133.
10
8.50 181.
60
1.30
0.60
18.0
0
C H I N A I TAL Y U N I TE D S TATE S
AR G E N TI N A S P AI N TU R K E Y S O U TH AF R I C A
I N D I A J AP AN K O R E A
Production Exports
PRODUCE MARKETING ASSOCIATION
World Production/Exports (Volume) - Grapes18
,241
.30
7,44
4.90
6,75
6.40
6,58
8.90
5,80
9.00
4,29
6.40
3,14
9.40
2,89
0.00
2,11
2.70
1,71
5.70
1,68
3.90
431.
40
498.
10
416.
30
16.2
0
140.
60
239.
60
853.
30
57.1
0
9.80
29.9
0
248.
10
C H I N A I TAL Y U N I TE D S TATE S
F R AN C E S P AI N TU R K E Y C H I L E AR G E N TI N A I R AN AU S TR AL I A S O U TH AF R I C A
Production Exports
Source: Production, Trade and Regulation Statistics: Fruits
PRODUCE MARKETING ASSOCIATION
World Production/Exports (Volume) –Avocados
1,26
4.10
295.
10
276.
00
238.
50
217.
00
215.
10
212.
90
201.
50
160.
40
156.
20
75.7
0
347.
20
19.9
0
0.10 17
.90
0.00
0.10
81.4
0
0.00
3.30
102.
80
30.3
0
M E X I C O D O M I N I C AN R E P
I N D O N E S I A U N I TE D S TATE S
C H I N A C O L O M B I A P E R U K E N Y A B R AZ I L C H I L E S O U TH AF R I C A
Production Exports
Source: Production, Trade and Regulation Statistics: Fruits
PRODUCE MARKETING ASSOCIATION
Global Fruit Import Trends
PRODUCE MARKETING ASSOCIATION
Global Fruit Import Trends
PRODUCE MARKETING ASSOCIATION
Why you cannot afford NOT to be in China• 18% of the world population• One of the highest growth in GDP• Fast Growing Middle & Affluent class• One of the biggest fruit producing countries in the world• The more developed a country is – the bigger the
requirement for year around supply of a product • China is Northern Hemisphere – South Africa Southern
Hemisphere.• South Africa is the biggest Southern Hemisphere
exporter of citrus.
PRODUCE MARKETING ASSOCIATION
Top Citrus producing/exporting countries Southern Hemisphere - Grapefruit
415.50
189.20
214.80
10.200.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
South Africa ArgentinaProduction Exports
Source: Production, Trade and regulation Statistics
PRODUCE MARKETING ASSOCIATION
Top Citrus producing/exporting countries Southern Hemisphere - Tangerines
1,00
4.70
148.
60
0.90
107.
80
BRAZIL SOUTH AFRICA
Production Exports
Source: Production, Trade and Regulation Statistics
PRODUCE MARKETING ASSOCIATION
Top Citrus producing/exporting countries Southern Hemisphere – Lemon & Limes
1,22
8.70
1,12
6.70
260.
10
255.
10
66.5
0 165.
00
ARGENTINA BRAZIL SOUTH AFRICA
Production Exports
Source: Production, Trade and Regulation Statistics
PRODUCE MARKETING ASSOCIATION
Top Citrus producing/exporting countries Southern Hemisphere - Oranges
19,8
11.0
0
1,81
8.90
1,49
5.30
33.3
0
0.00 97
5.50
BRAZIL INDONESIA SOUTH AFRICA
Production Exports
Source: Production, Trade and Regulation Statistics
PRODUCE MARKETING ASSOCIATION
Southern Hemisphere Citrus export volumes
331 200 tons 205 800 tons 204 700 tons 117 000 tons 97 700 tons
1 770 000 tons
Source: Global Fruit Trends
PRODUCE MARKETING ASSOCIATION
SA Industry Grapefruit 2012 - 201611
0,20
7
655,
372
927,
795
1,01
6,32
2
662,
303
307,
603
336,
876
268,
669
447,
813
405,
131
417,
810
992,
248
1,19
6,46
4
1,46
4,13
5
1,06
7,43
4
2 012 2013 2014 2015 2016
China Hong Kong China and Hong Kong
PRODUCE MARKETING ASSOCIATION
SA Industry Oranges 2012 – 201612
5552
2 1842
650 24
9601
1
2272
714
2040
460
2,39
7,17
2
1,25
0,82
3
2,01
0,29
4
2,98
8,26
9
3,06
1,71
5 3,65
2,69
4
3,09
3,47
3
4,50
6,30
5
5,26
0,98
3
5,10
2,17
5
2 012 2013 2014 2015 2016
China Hong Kong China and Hong Kong
PRODUCE MARKETING ASSOCIATION
SA Industry – Lemons 2012 - 20169,
200
15,8
30
40,6
40
30,9
46
31,1
20
731,
656
567,
853
1,95
7,68
8
1,26
4,47
9
949,
016
740,
856
583,
683
1,99
8,32
8
1,29
5,42
5
980,
136
2 012 2013 2014 2015 2016
China Hong Kong China and Hong Kong
PRODUCE MARKETING ASSOCIATION
About the market:• If you think about China don’t think about it as a single
market segment like you do for e.g. with Middle East or Europe
• There is a distinct difference with regards to quality and sizes – whole sale vs retail vs supermarkets• Different regions in the market requires different fruit sizes
for eg. • Southern area (Guangzhou) all sizes, because the sell
everywhere. Guangzhou is also the biggest and oldest market• Eastern area (Shanghai) Small and middle size• Northern area (Beijing) Middle and big sizes• Western area – Big sizes
PRODUCE MARKETING ASSOCIATION
Most Dominant supermarkets in China
Source: ibisworld.com
2. Carrefour
1. Lianhua Supermarket
3. Lotte Mart
4. Lotus
6.Tesco
5. Vanguard
7. Sam's Club
8. Pagoda
PRODUCE MARKETING ASSOCIATION
Current Reality• In Europe a lot of consolidation has taken place the last 5 – 8
years vs CN relatively new market still a lot of new players entering the market.
• Europe medium quality spec – China high end
Biggest Changes in the last 5 years:• Less and less fruit going through the grey channel via Hong
Kong• The use of Storage Facilities of fruit – to reduce the impact of
high volumes that arrive in the market
Changes in the future:• Impact of E-commerce
PRODUCE MARKETING ASSOCIATION
About Quality • Visit the market that you can understand your client and your clients – client
requirements• Don’t judge a book by its cover – Jiangnan Market
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About Quality
The most important factor is QUALITY – especially if you selling on the wholesale markets
• Substandard product draws the market down and you WILL get penalized• A market like Europe adjust easier to changes in quality due to differences in
season – China notFor citrus the most important quality factors are:
• Taste• Color• Firmness • Skin texture• Heavy pack• CONSISTENCY
Be cautious with new varieties
PRODUCE MARKETING ASSOCIATION
PRODUCE MARKETING ASSOCIATION
About branding• Chinese people are superstitious – color, numbers,
symbols means something make sure you know the meanings
• Chinese people must be able to pronounce your brand• Animals on packaging make it easier to recognized• Consider colour of packing
• Red - lucky, happiness, beauty, success and good fortune• Yellow - royalty and power• Green - money
• Lucky numbers – 8 – prosperity, wealth, success and social status, even numbers also better, 6 success and 2 harmony
PRODUCE MARKETING ASSOCIATION
Changes in packaging
PRODUCE MARKETING ASSOCIATION
If you want to be successful• Grow specifically for the market • Pack for the market• Plan your logistics carefully and in detail – challenges
with cold steri protocol• Monitor market and SA shipping info closely• Understand the cost chain• Be aware of important festivals like Mid Autumn Festival,
National Day, Chinese New Year• Know upfront how you are going to handle a quality
problem• Remember a good Chinese importer will never loose
money
PRODUCE MARKETING ASSOCIATION
Aspects to keep in mind for the future• SA can not afford to NOT focus on China and we HAVE
to grow • The Grey channel is no longer an option• Supermarkets are starting to request phytos• Global Gap will soon be a reality• Negotiating of sustainable protocols are critical• Negotiating of competitive tariff structures are critical –
Chile is brilliant • Learn from countries like Chile
PRODUCE MARKETING ASSOCIATION
Aspects to keep in mind for the future• Be 100% clear on
• Where you want to play • Keep in mind E-commerce is a reality
• With whom you want to play• What they can offer – clients, cold chain management, infrastructure• Their strategic position – market segments
• How you going to play• Fixed, MG’s• Spot market opportunity taker or long term brand building• Who will take what risks
• What you need to do to win
This is why you and SA cannot afford NOT to be in China!
PRODUCE MARKETING ASSOCIATION
Let all of us do our part – and enjoy the exciting journey!
Success and Growth
in China
GrowerGrow for ChinaPack for China
ConsistencyUnderstand the dynamics of the market
ExporterClarity on where to play & How to play in this
segmentBranding and packaging
Focused and Hands on logisticsRisk management – Steri failues & market
fluctuations
Industry & GovernmentCompetitive trade agreements
Realistic protocols – achievableIndustry facilities
PRODUCE MARKETING ASSOCIATION
Let’s take hands and Win together!
PRODUCE MARKETING ASSOCIATION
The Next Frontier: Exploring New Opportunities in China
18 August 2016
Fresh Connections:Southern Africa
PRODUCE MARKETING ASSOCIATION
Fruit supply into the Chinese market
Jason BoschOrigin Direct Asia
PRODUCE MARKETING ASSOCIATION
After your first week in China you feel like you can write a book.
After your first month in China you feel like you can write an article.
After you first year in China you are more confused than the day that you arrived and don’t dare to try and write anything.
PRODUCE MARKETING ASSOCIATION
China must feed a fifth of the world’s population with about 7% of its arable land, according to the UN’s food and agriculture organisation, and nearly half of that land has been “degraded” by decades of unchecked development. “It’s a zero-sum game, you have less and less resources, but more and more people who need them.”
What we see
What we read and hear
PRODUCE MARKETING ASSOCIATION
With forecast 32 percent average annual growth, online shopping expenditures in China are set to reach 3.3 trillion yuan ($539 billion)
Shoppers spent nearly US$10bn in the first 10 hours of Chinese e-commerce giant Alibaba’s “singles day” event, almost 15 million users logged onto T-Mall in the first 60 seconds of sale and 213 mill logged on for the first day.
The compound annual growth rate for B2C platforms was 160 percent from 2009 to 2012, and the sector is expected to continue growing by 53 percent annually.
Jack Ma, founder of Alibaba, was recently quoted as saying: “in other countries, e-commerce is a way to shop, in China it is a lifestyle”. “No matter how you slice the numbers, trends or forecasts, it’s clear that e-commerce is booming in China”.
China's fruit imports in 2014 up 23%According to information supplied by China's customs authority, Chinese fruit imports increased by 26.2% in terms of value compared to 2013, while the volume grew by 22.8%, reaching 3.3 million tonnes.
PRODUCE MARKETING ASSOCIATION
ZAR vs USD 2 performance
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A look our industry in the China market
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South African grapefruit volumes to China and HK
PRODUCE MARKETING ASSOCIATION
South African orange volumes to China and HK
PRODUCE MARKETING ASSOCIATION
PRODUCE MARKETING ASSOCIATION
PRODUCE MARKETING ASSOCIATION
PRODUCE MARKETING ASSOCIATION
China’s economy expanded by 7.4% in 2014 and 6.9% in 2015, its slowest rate in a quarter-century and below the government’s growth target, although this still sounds very positive China's economy is not in a good place, China's broad money growth — which includes physical currency, some sorts of deposits in banks, and some sorts of very liquid securities — has slowed to the point at which it is actually slower than that of the US.
Oxford Economics adds that China's M2 (a broad money measure) has risen about 2.5 percentage points faster than nominal GDP (which includes inflation) since 2010, so growth of 7% would suggest growth of about 4.5% nominal growth, even lower once inflation is stripped out.
PRODUCE MARKETING ASSOCIATION
The total cost to the economy of the prohibition on government consumption and the chill on administrative spending is an estimated reduction in growth of at least 0.6% this year.But it could, the report argues, be as high as 1.5% which, by rough calculation, gives us the figure of about $135bn of lost economic activity.
Even honest officials, the report suggests, are now so terrified of starting new projects, for fear of being seen as corrupt, that they're simply keeping public funds in the bank.
PRODUCE MARKETING ASSOCIATION
China produces half of worldwide vegetables and 30% of fruit!
China is not only the most populated country in the world but when it comes to production of fresh vegetables and fruit China is the worlds number 1! Of the estimated (commercial) production of fresh vegetables in the world, China produces half. Of all the fruits, China produces 30%. From this enormous amount, only a small portion is exported. Of 484 million tons of vegetables produced in 2012, only 4.4 million tons was exported. That's less than one percent. Of the 220 million tons of fruit produced in 2012 only a mere 3 million tons were exported abroad. Despite these figures China remains high on the list of exporters. With fresh vegetables China's export value is in fourth place and with fresh fruit export they are in 7th.
What we are failing to see
PRODUCE MARKETING ASSOCIATION
We are not starving
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PRODUCE MARKETING ASSOCIATION
Australia’s cherry production is considerably smaller than major cherry exporting countries such as Chile, so Aussie exporters generally position their cherries as a premium product.“And such a brand image goes well with many Asian countries’ gift exchange traditions during cultural festivals.”For many Asian consumers, imported fruits are expected to be more expensive than their local peers and when there is too much availability they look for something new.
Many of those people who bought cherries in China did not purchase the fruit for themselves; they were bought as gifts for others. As we all know, in recent months, the Chinese government has become increasingly heavy-handed with its anti-corruption campaigns across the country. This definitely had an impact on the sales of fruit”
Cherries were a premium gift. But some sellers say even though cherry imports are at their height this year, they’re no longer the hot luxury fruit they were just last year.One major importer that has been in the imported fruit business for 25 years. Last Chinese New Year he did great business in cherries. But this year, he says, the market is flooded. "It’s like you want one bowl of rice a day and they give you 10, there’s no way you can eat it all and it starts to lose its appeal,"
Another factor contributing to the shortfall is the changing attitude among Chinese buyers toward higher-priced imported fruits. As they become increasingly familiar with foreign fruits and the volumes available increase, the imported fruits have begun to loose some of that exotic appeal. Instead, some Chinese consumers have reverted to buying local products with a lower price unless the quality is significantly better.
Comments in China from sellers and buyers
PRODUCE MARKETING ASSOCIATION
China’s “Second tier cities”
This is a very broad term that we throw about, roughly 180 Chinese cities have over 1 million residents but only 4 of them have the title of “first tier” cities in terms of size and GDP and to a large extent this is due to their coastal location and access to port facilities.
These second tier cities have been the engines if China’s economy for many years and are key to growth in our industry, most of these 2nd tier cities are however located inland making them inaccessible to direct shipment and for this reason they are often unheard of and considered untapped “new markets” however in reality they are currently very active in consuming imported products.
Increased future growth in these cities is going to come as a result of improved logistical infrastructure in China and building relationships with sellers that are responsible for the physical sale of the fruit in these regions.
PRODUCE MARKETING ASSOCIATION
How we tend to think….
PRODUCE MARKETING ASSOCIATION
Reality…
PRODUCE MARKETING ASSOCIATION
PRODUCE MARKETING ASSOCIATION
Solutions???
PRODUCE MARKETING ASSOCIATION
Get an FTA in place to make South Africa competitive
The Chinese Government deems Free Trade Agreements (FTAs) as a newplatform to further opening up to the outside and speeding up domestic reforms,an effective approach to integrate into global economy and strengthen economiccooperation with other economies, as well as particularly an importantsupplement to the multilateral trading system. Currently, China has 19 FTAsunder construction, among which 14 Agreements have been signed andimplemented already.
China's Free Trade Agreements•China-ASEAN FTA•China-Pakistan FTA•China-Chile FTA•China-New Zealand FTA•China-Singapore FTA•China-Peru FTA•Mainland and Hong Kong Closer Economic and Partnership Arrangement•Mainland and Macau Closer Economic and Partnership Arrangement•China-Costa Rica FTA•China-Iceland FTA•China-Switzerland FTA•China-Korea FTA•China-Australia FTA
Free Trade Agreements under Negotiation•China-GCC(Gulf Cooperation Council) FTA•China-Norway FTA•China-Japan-Korea FTA•Regional Comprehensive Economic Partnership, RCEP•China-ASEAN FTA Upgrade Negotiations•China-Sri Lanka FTA•China-Maldives FTA•China-Georgia FTA
PRODUCE MARKETING ASSOCIATION
Supply the correct fruit into the market according to their requirements:
Trying to force undesirable fruit onto a wholesale platform pulls down the market and damages the industry reputation. Forcing someone to take it will maybe work for a year or two but is this worth while at the jeopardy of your countries reputation.
There will never be a shortage of customers willing to take your fruit but there is a severe shortage of customers that will pay you for your fruit.
Know your clients back ground and intentions.
PRODUCE MARKETING ASSOCIATION
Manage spikes in arrival volumes and spread the season longer and more evenly
PRODUCE MARKETING ASSOCIATION
2016 Grapefruit shipment by port
PRODUCE MARKETING ASSOCIATION
Manage Industry data released into the market
PRODUCE MARKETING ASSOCIATION
Thank You
Dankie
Xie Xie