Chinese challenges for Southern Hemisphere fruit exporters
From Australia to South America exporters are looking at how they can capture a greater share of Asia's food consumption. With 22% of the world's population and a growing middle class, China is a key driver of export opportunities but sending fruit there certainly comes with its difficulties. At the Produce Marketing Association Australia-New Zealand's (PMA) Fresh Connections 2012 event in Melbourne, www.freshfruitportal.com hears views from Australia, Chile and China itself about the fine print of this growth potential.
Origin Direct Asia managing director Jason Bosch says while the opportunities can be great in China, the country is one of the most difficult to send produce.
"It is one of the fussiest, most difficult markets I have ever dealt with, their standards are high and the penalties for providing the wrong quality produce could be severe," says Bosch, whose company is Shanghai-based.
Gustavo Yentzen, whose company Yentzen Consulting is based in Santiago, agrees with Bosch.
"Quality is the key aspect in China. The standards are very specific with different types of fruits and different standards of firmness and sweetness," says Yentzen, who also is the founder of www.freshfruitportal.com.
"There is definitely a growing trend of Chilean and Peruvian exports to Asia."
Other challenges for Chilean exports to China include their distance from Asia. This presents logistical problems as only certain types of fruit and vegetables can withstand the journey.
"This again affects the quality."
David Minnis from Minnis Horticultural Services says Australia has a very minor contribution to China's fruit and vegetable imports.
With a favorable opportunity to export fresh produce to a nation that is close geographically and counterseasonal, it is surprising that Australia has not acquired a more significant market share in China.
"We are a very, very minor player in Asian imports," says Minnis.
Australian pests, such as the fruit fly, are responsible for Australia's low participation. Minnis explains that Australa's exports, especially citrus products, require heat or in-transit cold treatments before they can be legally accepted in China.
These are not only expensive but can critically affect the quality of produce once it arrives in China. Fines are often issued if exports do not pass the country's five legal standards of quality, which include firmness, sweetness of the produce.
"Pests have inhibited Australia’s ability to penetrate the market in China whereas the capacity for Chile to export to China is simply astounding," he says.
It is imperative that to overcome challenges in exporting to China, southern suppliers understand the average Chinese consumer.
One example is avocados, which have growing consumption around the world but have not yet taken off in China. Chile is a major Southern Hemisphere exporter of the fruit and is still waiting on approval to access the Chinese market.
"I think avocados will do very well in China, but it will take time," says Yentzen.
Bosch believes avocados could be the next big export to China due to growing fears over obesity rates.
"The health aspects of products such as avocados are important and the government is currently pushing very hard for kids to eat more healthy," he says.
He says customers still need to get used to products like avocados, but demand will come with time - exporters must be patient.
"Take it very slowly, because otherwise, the outcome could be dire."