Australian Agribusiness: Asia export opportunities strong, but contracts key

The opportunity for Australian fresh produce export into Asia is niche premium product in significant volumes.

2018-10-10

Accompanying key clients to the recent ASIA FRUIT LOGISTICA in Hong Kong, our experts spoke with many Australian, Hong Kong and Chinese businesses to understand their challenges and identify synergies that provide opportunities.

Matthew Schofield, Partner, noted that “Australian and Chinese agribusinesses have a significant opportunity to establish deep cross border trade relationships to leverage the enormous benefits of CHAFTA. Introductions, networks and contract management will be key to capitalising on Asia’s growing demand for quality food produced under Australia’s Gold Standards.”

Through our ShineWing International network, we currently have a number of Chinese companies seeking supply arrangements with Australian fresh produce companies.

Reputation of Australian agribusiness

Australian produce has long had a geographical advantage in Asian markets, but with economic growth there are other considerations that can’t be ignored.

The country of produce is one of the core decision making criteria that Asian produce importers consider in the purchase decision. At the trade show, ‘Taste Australia’ continued to establish the theme of food safety, sustainability, and premium product messaging; a theme that resonates so well with consumers in both Australian and Asian markets.

However, leveraging the premium product reputation of Australian agribusinesses only forms part of the equation for successful export into Asia.

Key consideration factors for fresh fruit & vegetable Asian importers

Australia is not alone in seeking to fill the niche premium produce opportunity in the Asian markets. In addition to country of produce, Asian importers also place considerable weight on these factors:

Price

The ability to generate a profit margin on the transaction is a pre curser to entering into the commodity supply agreement and the overarching business engagement.

Volume

The Asian fresh produce markets continue to focus on guaranteed supply agreement quantities to meet consumer demand. This is a key consideration when supply agreements are being negotiated.

Shelf Life

This is key for the viability of a supply agreement. Australia’s relatively close proximity to Asian markets means Australian producers have an advantage over many growing regions, especially those in South America.  

These factors are just as important, if not more important, that the country of purchase when selecting produce.

Successful export supply arrangements into Asia for Australian agribusiness

When speaking with Australian fresh produce exporters at the trade show, Danny Armstrong, Managing Partner, highlighted that “a key concern for exporters when entering new markets is of course finding reputable and credible partners to work with and ensuring they get paid!” Having worked with many large exporters and understanding in detail unique elements related to trade with China, ShineWing is very well placed to assist Australian exporters of all sizes.

In addition to this, Steven Edmonds, Partner, stated that “Attending ASIA FRUIT LOGISTICA with our long term Australian fresh produce clients was a great opportunity to understand market trends and our clients’ evolving business strategies. We were also able to look for opportunities for our Australian fresh produce clients in our Chinese network, along with capital investment opportunities to expand export capacity and volumes.”

Open doors into Asia through our international network and mainland China offices, offering a safe and trusted gateway into Asian markets.