Market Prospects, Opportunities and Market Prospects, Opportunities and

Challenges for Challenges for Tropical FruitsTropical Fruits

Kaison Chang, Secretary, Kaison Chang, Secretary,

Intergovernmental Group on Bananas Intergovernmental Group on Bananas

and Tropical Fruitsand Tropical Fruits

Market Prospects, Opportunities Market Prospects, Opportunities

and Challenges for Tropical Fruitsand Challenges for Tropical Fruits�� They are a relatively cheap and ready They are a relatively cheap and ready

source of vitamins and minerals which are source of vitamins and minerals which are

important nutritional components. important nutritional components.

�� Perceived by developing countries as Perceived by developing countries as

representing viable options for diversification from representing viable options for diversification from

traditional export crops, which have experienced traditional export crops, which have experienced

downward trends in prices. downward trends in prices.

�� HoweverHowever, , international trade prospects are international trade prospects are

subject to uncertainties, some of which derive subject to uncertainties, some of which derive

from the very success of export efforts of the from the very success of export efforts of the

pioneers in the fieldpioneers in the field

Tropical FruitsTropical Fruits--Production by type, 2003Production by type, 2003--20062006(Thousand tonnes)(Thousand tonnes)

0

10000

20000

30000

40000

50000

60000

70000

80000

2003 2004 2005 2006Mangoes Avocado Pineapples Papaya Minor Fruits

Share of Major Tropical Fruit Share of Major Tropical Fruit

Production by Region Production by Region -- 20062006

Asia LAC Africa Oceania

Minor Fruit Production Minor Fruit Production -- 20062006(Thousand Tonnes)(Thousand Tonnes)

0

5000

10000

15000

20000

Durian Rambuttan Guava Total

Durian Production Durian Production –– 20062006(Thousand tonnes)(Thousand tonnes)

0

100

200

300

400

500

600

700

800

Indonesia Thailand Malaysia

Rambuttan Production Rambuttan Production –– 20062006(Thousand tonnes)(Thousand tonnes)

0

100

200

300

400

500

600

700

800

900

Indonesia Thailand Malaysia

Guava Production Guava Production -- 20062006(Thousand tonnes)(Thousand tonnes)

0

200

400

600

800

1000

1200

1400

1600

1800

India Pakistan

Trade Value Trade Value –– 20062006(US $ million)(US $ million)

0

1000

2000

3000

4000

5000

6000

Tropical

Fruits

Bananas apples oranges pears

Fresh Tropical Fruits ImportsFresh Tropical Fruits Imports(Thousand tonnes)(Thousand tonnes)

0 500 1000 1500 2000 2500 3000 3500

1999-01

2002

2003

2004

2005

2006

Total Mangoes Pineapples Avocados Papaya

MEDIUMMEDIUM--TERM OUTLOOKTERM OUTLOOK

�� Dynamic time series models used for projectionsDynamic time series models used for projections

�� Assumptions included :Assumptions included :�� normal weather conditions would prevail normal weather conditions would prevail

�� past trends in planted areas, yields, GDP growth and past trends in planted areas, yields, GDP growth and population would continue.population would continue.

�� Adjustments made to the forecast results to reflect Adjustments made to the forecast results to reflect current trends, policies and future market prospectscurrent trends, policies and future market prospects

�� Projections do not account for processed fruit, due to Projections do not account for processed fruit, due to lack of trade information and conversion factors lack of trade information and conversion factors between fresh and processed formsbetween fresh and processed forms

Projected Production to 2015Projected Production to 2015(Thousand tonnes)(Thousand tonnes)

64000

66000

68000

70000

72000

74000

76000

78000

80000

82000

84000

2006 2015

Projected Production by Projected Production by

Variety Variety -- 20152015(Thousand tonnes)(Thousand tonnes)

Mango Pineapple Papaya Avocado

Projected Import Demand by Projected Import Demand by

20152015(Thousand tonnes)(Thousand tonnes)

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Developed Developing Total

Projected Import Demand by 2015, Projected Import Demand by 2015,

by Varietyby Variety(Thousand tonnes)(Thousand tonnes)

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Pineapple Mango Papaya Avocado Total

CONCLUSIONS CONCLUSIONS

�� Projections suggest ample opportunities existProjections suggest ample opportunities exist

�� Forecasts of economic growth underpins Forecasts of economic growth underpins continued growth in consumption. continued growth in consumption.

�� A significant development is the increasing share A significant development is the increasing share of fresh compared to processed fruits traded, of fresh compared to processed fruits traded, taking advantage of advances in post harvest taking advantage of advances in post harvest technology.technology.

�� These developments have enabled tropical fruits to These developments have enabled tropical fruits to compete at the upper end of the market, compete at the upper end of the market, maximizing earnings through the sales of fresh maximizing earnings through the sales of fresh fruit in a segment where unit prices are at a fruit in a segment where unit prices are at a premiumpremium. .

CONCLUSIONS CONCLUSIONS -- ContdContd

�� Tropical fruit market has evolved significantly Tropical fruit market has evolved significantly

�� Price premiums based on novelty have been Price premiums based on novelty have been replaced by quality based premiums. replaced by quality based premiums.

�� Hikes in oil prices have eroded profit margins but Hikes in oil prices have eroded profit margins but costs not passed to retailers because of the costs not passed to retailers because of the intense competition in the fruit trade as evidenced intense competition in the fruit trade as evidenced by high price elasticities of demand. by high price elasticities of demand.

�� Major challenges for future market growth are Major challenges for future market growth are related to coordinated management of the fieldrelated to coordinated management of the field--toto--marketmarket--supply chain. supply chain.

�� Issues related to food safety, pest and disease Issues related to food safety, pest and disease control as well as quality should find a proper control as well as quality should find a proper balance between cost and demand.balance between cost and demand.

CONCLUSIONS CONCLUSIONS -- ContdContd

�� Phytosanitary measures are of concernPhytosanitary measures are of concern

�� Although market access and sanitary Although market access and sanitary issues are of importance, compliance issues are of importance, compliance is not as problematicis not as problematic

�� Challenges in WTO on scientific and Challenges in WTO on scientific and equivalency grounds are commonequivalency grounds are common

�� Cost of treating fruit for exports could Cost of treating fruit for exports could be a limiting factorbe a limiting factor

�� Must be clearly linked to supply Must be clearly linked to supply outputsoutputs

CONCLUSIONS CONCLUSIONS -- ContdContd

�� Prioritization of the activities to better allocate Prioritization of the activities to better allocate resources and improve the effectiveness of the resources and improve the effectiveness of the services rendered. services rendered.

�� Cognizance must be taken of the negative impact Cognizance must be taken of the negative impact of the cost/price squeeze on production. of the cost/price squeeze on production.

�� Supply chain costs have also increased with the Supply chain costs have also increased with the rise in processing and distribution costs, mainly rise in processing and distribution costs, mainly due to fuel costs. due to fuel costs.

�� To improve longerTo improve longer--term structural conditions term structural conditions --need to develop actionneed to develop action--orientation programmes to orientation programmes to expand demand and reverse the downward expand demand and reverse the downward pressure on world prices. pressure on world prices.

�� To be discussed tomorrow. To be discussed tomorrow.

Thank you!!!Thank you!!!