Market Intelligence study on selected MSG export products

Transcription

1 Market Intelligence study on selected MSG export products ACP-EU Joint Parliamentary Meeting July 2017 Convention Center Port Vila John Licht, Program Manager Trade and Investment Division Port Vila Vanuatu

2 Presentation Outline Objective & Methodology of the study Market Locations in brief Products studied Coconut Oil Cocoa beans Processed Timber Kava Bilum Bags

3 Objective and Methodology Objective The objective of this study is to understand and disseminate market access requirements for the selected markets and products, in order to effectively enhance market access and facilitate trade through market understanding. Methodology The study covers; 5 products (coconut oil, cocoa beans, processed timber, kava, and bilum bags) 5 markets (Australia, China, Malaysia, Singapore and New Zealand) The research method includes; In-market interviews and retail store visits Internet and desk research

4 Market Locations Sydney 2. Guangzhou 3. Kuala Lumpur 4. Singapore 5. Christchurch

5 Coconut oil Coconut oil is typically either sold as RBD (refined, bleached and deodorised - usually derived from dried copra), or as VCO (virgin coconut oil - usually derived from fresh coconuts). VCO typically commands a higher price because it is less refined and has a higher level of antioxidants. Coconut oil is widely regarded as one of the healthiest foods on the planet. It s high antioxidant status and anti-bacterial properties are claimed to benefit conditions such as heart disease, high blood pressure, kidney disease, inflammation, poor digestion, gum disease, and skin disorders.

6 Coconut Oil (HSC ) Market Data 2014 (USD000) (ITC, 2015) Australia China Malaysia Singapore New Zealand Fiji $709 Nil $294 Nil $58 Vanuatu $3,354 Nil $16,824 Nil $1,850 Solomon Is. $20 $10,297 Nil $69 $51 Papua New Guinea $66 Nil Nil Nil Nil Total MSG sales $4,149 $10,297 $17,118 $69 $1,959 World sales $34,954 $152,918 $37,704 $38,876 $7,521 Five year trend Up 14% Up 32% Down 43% Up 84% Up 139% Biggest supplier Malaysia Indonesia Indonesia Indonesia Malaysia

7 Coconut oil (HSC ) Import duties, taxes, quotas and fees Australia China Malaysia Singapore New Zealand Import duty Free 9% 5% Free Free Sales tax 10% 13% 6% 7% 15% Import quotas Nil Nil Nil Nil Nil SPS Issues DAWR AQSIC MAQIS AVA Must comply with IHS (MPI) Import license requirements Nil Nil Nil Nil Nil

8 Coconut oil brands and retail prices Singapore Brand Type Organic certified Quantity Price (SGD) Country of origin Nakula VCO Yes 1 litre Sri Lanka (packed in Australia) Vita Coco VCO Yes 250ml Brazil/USA Aunt Patty s VCO Yes 354ml Philippines/USA Spectrum VCO Yes 414ml India, Philippines or Sri Lanka /USA

9 Coconut oil brands and retail prices New Zealand Brand Type Organic certified Quantity Price (NZD) Country of origin Blue Coconut RBD No 400g 9.49 Rabaul, Vanuatu, Samoa, Fiji (packed in NZ) Pams RBD No 400g 5.99 Rabaul, Vanuatu, Samoa, Fiji (packed in NZ) Simply VCO No 400ml Indonesia Simply RBD No 400ml 8.99 Indonesia

10 Coconut oil recommendations Coconut oil has the potential to be a significant export revenue earner for all of the MSG countries. Of the two main product types (RBD or VCO), VCO has better potential for adding value and achieving premium prices. Recommendations include: The VCO should be packaged in glass and branded as a high quality product The priority markets should be Australia, New Zealand and Singapore. The Asia Pacific Coconut Community (APCC) quality standard for VCO should be adopted by exporters in all MSG countries

11 Cocoa beans In general, cocoa is considered to be a rich source of antioxidants, which may impart antiaging properties. Cocoa also contains a high level of flavonoids which may have beneficial effects on cardiovascular health. According to the Australian Government s Pacific Agribusiness Research Development Initiative (PARDI), cocoa is currently the third most important export earner for Solomon Islands and the fourth for Vanuatu. Cocoa beans are highly sought after and there is already a global shortage. Ghana, the world's number two grower of cocoa beans, saw a huge drop in crop yields last season. As a result, cocoa prices have jumped nearly 40 percent since the start of It is estimated that by 2020, chocolate demand will outstrip production by over 1 million tons (World Cocoa Foundation, 2016).

12 Cocoa Bean (HSC ) Market Data 2014 (USD000) (ITC, 2015) Australia China Malaysia Singapore New Zealand Fiji $12 Nil Nil Nil $9 Vanuatu $547 Nil $1,367 $172 Nil Solomon Is. $5 Nil $11,196 Nil Nil Papua New Guinea $283 $955 $33,030 $20,666 $16 Total MSG sales $847 $955 $45,593 $20,666 $16 World sales $1,785 $91,533 $691,990 $266,254 $10,307 Five year trend Up 56% Down 24% Down 31% Down 3% Up 145% Biggest supplier Ghana Ghana Ghana Ghana Ghana

13 Cocoa beans (HSC ) Import duties, taxes, quotas and fees Australia China Malaysia Singapore New Zealand Import duty Nil If classified LDC Nil, otherwise 30% Nil Nil Nil Sales tax 10% 13% 6% 7% 15% Import quotas Nil Nil Nil SPS issues DAWR AQSIC MAQIS. AVA Inspection, OR import permit OR fumigation. Must comply with IHS (MPI) Import license requirements Nil None known Imports from Fiji may require an import license. See SPS above

14 Cocoa brands and retail prices New Zealand Brand Type Organic certified Quantity Price (NZD) Country of origin Whittakers Chocolate bar No 250g 4.79 Ghana (made in NZ) Whittakers Chocolate bar No 100g Ghana (made in NZ) Cadbury Cocoa powder No 250g 4.79 Made in NZ Abundant Earth Cocoa powder Yes 150g 7.69 Made in Australia Lindt Chocolate bar No 100g 3.50 Ghana (made in Switzerland ) Lifefoods Cocoa powder Yes 250g Equador (Czech Republic)

15 Cocoa bean recommendations Cocoa beans have significant export revenue earning potential for all MSG countries, particularly given the increasing world demand and decreasing supply. There are no significant market access issues in any of the five markets studied. Recommendations include: Planting cocoa beans wherever the growing conditions are suitable. Cocoa bean growers should be trained to ensure the highest quality possible. Existing MSG chocolate manufacturers should be given incentives to expand. Consideration should be given to developing and promoting a single source cocoa bean brand in each country, promoting the unique flavour profile of each one.

16 Processed timber The PHAMA report; Markets Study for Solomon Islands Timber Exports, published in 2014 established that the perceptions of both exporters and importers generally centred on a common set of issues. Many of these issues also apply in other MSG countries: Volume of supply importers generally would like to access a greater volume of timber. Consistency of supply exporters and importers both have difficulties in consistently sourcing the desired species. Business relationships difficulties have been experienced in communication and mutual understanding of business requirements. Quality of timber the quality of timber is variable, which can lead to rejection of orders and wastage through re-processing. Loading of timber timber is typically loaded manually into containers; this can result in timber shifting during transport and associated additional time and cost to unload at the destination. Legal origin and timber sourcing practices there is a need to meet legislative and market requirements for assurance of legality and, in some cases, sustainability.

17 Processed Timber (HSC 4407) Market Data 2014 (USD000) (ITC, 2015) Australia China Malaysia Singapore New Zealand Fiji $390 $138 Nil Nil $2394 Vanuatu $1 $9 Nil $26 Nil Solomon Is. Nil Nil Nil Nil $17 Papua New Guinea $1,674 $6,321 $520 $795 $435 Total MSG sales $2,065 $6,468 $520 $821 $2,846 World sales $324,047 $7,500,045 $114,733 $56,831 $60,047 Five year trend Down 13% Up 31% Down 21% Down 54% Up 58% Biggest supplier New Zealand Russia USA Malaysia Canada

18 Processed timber Import duties, taxes, quotas and fees Australia China Malaysia Singapore New Zealand Import duty Free 14% Free Free Free Sales tax 10% 17% 6% 7% 15% Import quotas Nil Nil Nil Nil Nil SPS issues DAWR AQSIC MAQIS. AVA Inspection, OR import permit OR fumigation. Must comply with IHS (MPI) Import license requirements Nil Nil Nil Nil Nil

19 Processed timber recommendations Processed timber has less potential for future revenue growth due to the declining stocks of hardwood timber. China is the biggest market for processed timber and is still growing. China should be one of the priority markets. The quality characteristics of the MSG timber itself has a good market reputation, however continuity of supply seems to be a problem. Most of the importers agree that it was very important to cut, dry and fumigate the timber properly before shipping, otherwise the wastage factor is too high. If wastage can be reduced then the price and quality reputation of MSG processed timber should increase. The market intelligence gathered suggests that establishing timber legality may be more important than establishing forest sustainability. Furniture manufacturer Guangzhou

20 Kava Kava is a traditional drink for ceremonies in most of the Pacific Island countries including the MSG region. In the late 1990s, questions were raised over potential health concerns from kava. However, in 2007, a World Health Organisation report concluded that kava has been shown to cause no irreversible, long term health problems. The United States of America Food and Drug Administration (FDA) issued a consumer alert in 2002 about kava-containing dietary supplement products and the potential risk of serious liver injury. The export markets with the best potential for kava sales are likely to be those with large resident populations of Pacific Islanders. These markets are Australia, New Zealand, the United States of America, Canada and the United Kingdom. A WHO report of 2007 confirmed that there has been international concern over the association of kava products and serious hepatotoxicity. Regulatory action banning these products in Europe has been controversial. Further research into kava products is necessary, in particular to identify and gain information about the toxicology of the non-kava lactone constituents. This needs to include any differences between root and rhizome. Unfortunately Australia banned commercial imports of kava in 2007, so this market has very limited export market potential. The Asian markets (Singapore, China and Malaysia) appear to be mainly processing centres for kava.

21 HSC (includes kava) Market Data 2014 (USD000) (ITC, 2015) Australia China Malaysia Singapore New Zealand Fiji $1 Nil Nil Nil $837 Vanuatu Nil $224 Nil Nil Nil Solomon Is. Nil Nil Nil $53 Nil Papua New Guinea Nil Nil Nil $3,522 Nil Total MSG $1 $224 Nil $3,575 $837 World Imports $34,954 $54,747 $84,062 $139,765 $10,475 Five year trend Up 75% Down 33% Up 27% Up 36% Up 161% Biggest supplier China France China China USA

22 HSC (includes kava) Import duties, taxes, quotas and fees Australia China Malaysia Singapore New Zealand Import duty Free 6% (MFN) Free Free Free Sales tax 10% 17% 6% 7% 15% Import quotas Nil Nil Nil Nil Nil SPS issues DAWR AQSIC MAQIS. AVA Inspection, OR import permit OR fumigation. Must comply with MPI Biosecurity. Import license requirements Nil Nil Nil Nil Nil

23 Kava recommendations Kava has limited potential for export revenue growth in the selected markets due to the question marks around its safety, and also the lack of awareness of the product in the three Asian countries. The markets with the best awareness of kava are those with resident Pacific Island populations. These markets include Australia, New Zealand, Canada, USA, and the UK. However Australia has banned commercial imports of kava. The Malaysia, Singapore and China markets can be considered as potential processing centres for adding value to kava. Kava exporters should focus on the New Zealand, USA, UK and Canada markets. MSG countries to continue to disseminate positive information on Kava as a safe and relaxing beverage MSG to continue to talk to Australia about the kava ban based on the proposed Codex standard and methods to protect vulnerable communities (through pricing and serving sizes, etc.)

24 Bilum bags The Pacific Islands Trade and Invest Sydney office has been assisting the woman of Papua New Guinea to find customers in Australia for their hand crafted bags for several years. The skill of weaving bilum bags made from dried fibre extracted from tree bark, animal fur, sisal or vine - has been passed down from one generation of women to the next for centuries. Traditionally, bilum bags were used to carry babies, food or tools. Bilum bags are not yet exported in any significant quantities and there is no International Trade Centre (ITC) data to present in terms of market size or growth for any of the five export markets studied.

25 Bilum bags recommendations Bilum bags from PNG have the least potential for export revenue growth of the five products selected for the study. Very limited numbers of bilum bags are being sold in the Australian market. Awareness of what they are, where they come from, and the story behind them is almost nil within Australia. None of the other four markets have any known sales. Bilum needs significant investment in product design, quality, production capacity and branding before any investment is made into export promotion. This product should be excluded from the list of priority export products at this time due to its limited potential for earning export revenue in its current state.

26 Market Intelligence Study Recommendations MSG Members to further determine the priority export industry sectors in their jurisdictions and their export markets in conjunction with MSG Secretariat for development. A Survey is required for the relevant exporters to ascertain the type of market intelligence information they require and the best method to deliver it to them. Consider the developmental aspects of improving production and promotion of the products on areas such as women empowerment, protection of environment and sustainable production in line with the SDGs. Consideration could also be given to establishing an export capability building unit, so that the market information is utilised effectively awaiting funding assistance.

27 Market Intelligence Study Finally, MSG wishes to thank and express its sincere appreciation to the European Union (EU) for funding assistance of EUR 1,750,000 under the 10 th EDF through the Pacific Integration Technical Assistance Program (PITAP) for period Feb 2014 to March 2017 to the Trade and Investment Division of the MSG Secretariat.

28 Thank you for your attention For further information, please contact us at the MSG Secretariat on Tel: (Ext 108) or