GAIN report

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Product ‘tropicalisation’ important for Costa Rican market

Though its population is small – just 4.8 million people – Costa Rica adds more than 2 million tourists and thousands of affluent retirees to its base of retail food consumers every year.

Suppliers of food for Costa Rica’s retail market should show more interest in ‘tropicalising’ products, a new GAIN report says.

Tropicalising involves concepts such as packaging in smaller volumes and in a manner appropriate for the heat of the tropics, and incorporating popular local flavours, such as fruit, etc, it says.

It also reports that Costa Rican food executives encourage US food manufacturers and suppliers to, among other things, be more aggressive in all sectors, but especially regarding canned and fresh fruits and vegetables, and processed foods; and to show greater interest in providing environmentally friendly packaging.

According to ‘Costa Rica: Retail Foods’, the economic outlook in Costa Rica is promising, “economic growth is steady and a solid base of middle to upper-class consumers is expanding in the country.” Though its population is small – just 4.8 million people – Costa Rica “adds more than 2 million tourists and thousands of affluent retirees to its base of retail food consumers every year.”

Best prospects for exports to Costa Rica

Costa Rica imports fresh fruits year-round, but about 70% of total domestic consumption of non-tropical fruits occurs during the Christmas season (October through December).

Mexico, Chile and Guatemala are the main competitors of the US in the Costa Rican fresh fruit, wines and vegetable market.

While the most favourable export prospects for the US lie in processed products, in recent years, “consuming more convenience and healthy foods has been the trend and has resulted in good prospects for US exports of fresh fruit (mainly apples, grapes, peaches and pears), processed fruits and vegetables (especially canned fruits), and snack foods (including chips, cookies and candies),” GAIN says.

The US and Chile export similar products to Costa Rica, but during different seasons. “Imports from Chile take place from January to July. During the rest of the year, imports come mostly from the United States, except for those fruits available year-round.” Canada also poses slight competition in the fruit and potato sector because of its 2002 FTA with Costa Rica.

Fruit and vegetable production in Costa Rica

Tropical vegetables and fruits are among the locally produced products that present competition to US exporters in the Costa Rican market.

Costa Rica has been incorporating advanced technologies into the preservation of locally produced foods – preserves, concentrates, deep freezing, canning, and packaging thus opening the door to new markets and diversity, both for internal consumption and also for export.

Key Costa Rica exports include bananas, heart of palm, concentrated tropical fruits and jalapeno peppers.

“Tropical fruits and vegetables like bananas, pineapples, cantaloupes, watermelons, mangoes, cassava, ginger, yams, roots and tubers, vegetables and greens – produced both with conventional methods as well as organically – have been very important products in the international markets, as much as for fresh food consumption as for fresh raw ingredients,” the report says.

Retail in Costa Rica

In 2014, the retail sector continued its planned expansion with major retailers moving deeper into the small store segment, targeting those who shop in convenience and small stores. “Additionally, the Costa Rican market of wholesale supermarkets continues to grow, mainly driven by the opening of convenience stores, bakeries, ‘sodas’ (small low end restaurants), restaurants and hotels in recent years.”

Source: Costa Rica: Retail Foods
Image of popular Costa Rican tourist destination Jaco Beach: by Costaricapro (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

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Record orange exports forecast for Australia

Australia’s citrus industry is export-oriented and has a competitive advantage in Northern Hemisphere markets such as Indonesia, China, Japan, Korea and the US.

Australia’s orange exports for 2015/16 are forecast to reach a record of 190,000 tons – up 31% on the previous season – due to increases in production and demand and lower tariffs in key markets such as Japan and China, according to a new GAIN report. The citrus industry is one of Australia’s foremost horticultural industries and the largest exporter of fresh fruit, it says.

Australia’s citrus industry is export-oriented and has a competitive advantage in Northern Hemisphere markets such as Indonesia, China (now Australia’s third-largest citrus export destination), Japan, Korea and the US. As these exports are counter-seasonal, they do not compete with locally produced fruit.

In recent years, the US has become a less important market for Australian citrus exports, which have refocused on Asia.

Last year, Australia’s newly-signed free trade agreements with China, Japan and Korea were ratified with significant benefits expected for citrus exporters which may now be more competitive with US citrus exporters into these markets, GAIN says.

Citrus imports into Australia

Australia imports fresh oranges over its summer season, when there is no domestic production. Fresh oranges are predominantly Imported from the US. Australian growers previously had a dominant share of the US market for imported out-of-season navel oranges (from May to September). Sales peaked at 30,000 tons in 2007 but have dropped to under 10,000 tons due to the strong Australian dollar and significant competition from South Africa, Chile and Peru in the US market.

Production

Australia’s 2015/16 fresh orange harvest is forecast at 455,000 metric tons, slightly above the previous year. Good seasonal conditions and improved access to water irrigation in recent years have supported production.

The main Australian orange varieties are Navel and Valencia, with the former usually sold fresh and 90% of the latter used to produce juice. In the last decade, growers have continued to switch away from Valencia oranges and towards Navel oranges and mandarins for the fresh fruit market.

source: USDA GAIN report AS1530, Australia Citrus Annual 2015, January 12, 2016

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Ongoing strong growth in Mexican avocado Industry

The world leader in avocado production, Michoacán accounts for 80% of Mexico’s avocado production but the state of Jalisco – Mexico’s second-largest producer with 6% of total Mexican production – is growing at a faster rate than other states.

Mexico’s Hass avocado production is forecast to come in at 1.6 million tons in marketing year (MY) 2015/16, up from the estimated 2014/15 total of 1.5 million, and 1.4 million tons in 2013/14. And exports will rise to about 750,000 tons in 2015/16 (July/June), predicts the USDA GAIN’s Mexico Avocado Annual Report.

Production

The USDA Post’s avocado production forecast for 2015/16 of 1.6 million tons is based on official estimates and reflects the fact that Michoacán has enjoyed good weather, though rainfall and hail in March “somewhat affected maturity levels of the fruit.”
“Sources indicate that the good implementation of phytosanitary pest control programs has helped boost production,” the report says.

Production growing fast in state of Jalisco

The world leader in avocado production, Michoacán accounts for 80% of Mexico’s avocado production but the state of Jalisco – Mexico’s second-largest producer with 6% of total Mexican production – is growing at a faster rate than other states.

Total area planted is forecast to rise 6.2% to 186,926 ha in 2015/16 “as growers in different states in Mexico are interested in increasing area due to good domestic and international demand for Mexican Hass avocados.”

Due to plant health concerns, Michoacán is currently the only state in Mexico authorised to export Hass avocados to the US.

Varieties

Due to its longer shelf life and demand for the variety in foreign markets, most Mexican states grow the Hass variety. Other varieties planted in Mexico at smaller scales are Fuerte, Criollo, Bacon, Pinkerton, Gwen, and Reed.

Export growth

Despite international prices being lower than expected in September/October 2015, exports were slightly higher compared to the same period in 2014/15. According to Global Trade Atlas (GTA), exports for 2014/15 are estimated at 736,421 tons; however, data from the Secretariat of Economy (SE) in Mexico estimate exports at 847,070 tons.

In general, exports have been increasing due to a good international demand and year-round market access to all 50 US states.

According to GTA, avocado exports to the US for 2014/15 were 584,252 tons (SE data indicates 693,342 tons, very close to the industry estimates), and for MY 2013/14 exports to the US were 436,578 tons (SE data indicates 516,084 tons).

The vast majority of the export business is managed directly by packers, many of whom have significant U.S. investments. Growers in Michoacán generally sell their fruit on the spot market to a packer in terms of pesos per kilo.

Industry representatives indicate that processed avocado (guacamole) exports are approximately 170,000 tons, and that these products are sold to the US, Europe, the Middle East, and Asia, GAIN says.

Export markets

The US is the top export market for Mexico, consuming 79% of total exports. Japan and Canada are strategic market niches where Japan has about 9% of the market and Canada about 6%. About 37 packers in Michoacán are eligible to export Mexican avocados to the US. Mexico has been exporting avocados to 21 countries; other top markets besides those listed above include Costa Rica, El Salvador, Honduras, and France. As Mexico has increased trade with China over the past few years, avocado exports to that country increased from 1,825 tons in 2013/14 to 7,869 tons in 2014/15.

New avocado niche: avocado oil for cosmetics

Fresh avocado exports continue to drive producer profitability despite the fact that new market niches are developing (for example, the extraction and export of avocado oil for the cosmetic industry). The cosmetic industry has not taken full advantage of this demand segment as there is a consumer perception that avocado byproducts are expensive. A small amount of avocado oil is also sold for food use.

source: GAIN Report Number: MX5050 Mexico Avocado Annual Report

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South Africa’s deciduous fruit supply

South Africa is the Southern Hemisphere’s fourth biggest apple producer and ranks second for pears.

With about 79,803 ha last year, deciduous fruit is the largest sub-sector for all land dedicated to fruit plantations in South Africa.

And of the country’s total area planted with deciduous fruit, grapes (fresh and dried), apples and pears together accounted for about 78%, reports the USDA’s Global Agricultural Information Network (GAIN).

In an update on South African deciduous fruit supply and demand, it says South Africa is the Southern Hemisphere’s fourth biggest apple producer and ranks second for pears.

The Western Cape is the country’s largest and traditional producer of deciduous fruits, but in the past two decades the Northern and Eastern Cape, and Limpopo provinces have become increasingly large producers of deciduous fruit, GAIN says.

Forecasts from the South African post in the report include:

Apples
South African apple production is expected to increase by 2% to 865,000 tons in the 2016 marketing year (January to December), and exports to inch up 1% to 455,000 tons, based on the available production and the weak rand exchange rate.
Africa is now the leading export market for South Africa apples, taking nearly half of total exports, followed by the EU (26%), Asia (20%) and the Middle East (7%).
The top 5 export countries in 2014 were the UK (17%), Malaysia (11%), Nigeria (11%), Angola (4%) and the UAE (4%).

Pears
South African pear production is forecast to rise 3% to 410,000 tons in 2016 based on normal growing conditions and the minimal impact of the dry weather conditions on irrigation water availability.
Exports are set to fall 7% to 190,000 tons based on the difficult global pear market, and growth in the local processing market demand and prices.
The EU takes about 57% of the total exports followed by Asia (22%), the Middle East (14%), and Africa (7%).
The Netherlands is the biggest individual market, accounting for 27% of the export market followed by the UAE at 10%.

Table grapes
Another exceptional season is expected for table grape production, with a marginal rise on last season to 294,000 tons.
Exports are also expected to rise marginally, by 1% to 266,000 tons, based on the available production and continued strong demand due to the weak exchange rate.
The EU takes at least 75% of the table grapes exports.
“South Africa benefits from a shorter shipping distance than other Southern Hemisphere competitors, strong demand for seedless varieties, and a free trade agreement with the EU,” the report says, also noting that “exports to Asia (14%), the Middle East (6%) and Africa (4%) have strong growth potential.”

Domestic consumption
Domestic consumption of apples, pears and table grapes is forecast to remain flat in 2016 based on the available production and South Africa’s slow economic growth prospects.
South Africa is a net exporter of deciduous fruits, and only imports small quantities of apples, pears and grapes to fulfill a niche market or to satisfy domestic demand when supply is limited

Source: http://www.fas.usda.gov/data/south-africa-fresh-deciduous-fruit-annual-0
South Africa flag image: Flag design by Frederick Brownell, image by Wikimedia Commons users [Public domain or Public domain], via Wikimedia Commons

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Opportunities for fresh produce exports to France

Fresh fruits and vegetables – particularly tropical and exotic – are among the best high value prospects for American companies looking to export to France, according to a report by the USDA’s Foreign Agricultural Service.

Fresh fruits and vegetables – particularly tropical and exotic – are among the best high value prospects for American companies looking to export to France, according to a report by the USDA’s Foreign Agricultural Service.

Titled the France Exporter Guide, the report says prime opportunities for U.S. fresh fruit and vegetable suppliers are in off-season and extended season sales, as well as during years of short French fruit crops.

“France is the leading European market for U.S. grapefruit and number three in the world after Japan and Canada with 17.5 tons imported in calendar year 2013, valued at $20 million. The U.S. market share for citrus fruits represents 21 percent of total French imports in volume and 25 percent in value. The US was France’s first supplier in volume and value for grapefruit for the first time in 2014, followed by South Africa, Israel and Spain,” it says.

During short-crop years, France imports apples and pears from the US. There is also a niche market for berries, medjool dates, dried prunes, frozen fruits and nuts, fresh cherries, cashew nuts, apples, and other fresh citrus.

“Imports of fresh and dried cranberries from the US have been very successful during the last fifteen years and were valued at more than $1 million in 2014. Transshipments from other EU member states (who do not produce cranberries) were valued at more than $2.2 million the same year.”

Root vegetables among few opportunities for US fresh vegetables

Very few opportunities exist for US fresh vegetables, the report says. “Trends and increased consumption indicate a growing demand for dried and prepared vegetables (washed and cut) and many supermarkets have a special section for these types of products.”

However it advises there may also be demand for organic vegetables, “as the new US/EU organic agreement should open doors for U.S. suppliers.”

And import statistics show US exports of fresh and chilled edible root vegetables to France have increased since 2011. “These exports were valued at $2.4 million versus $626,000 in 2010. FAS Paris initiated contact with French buyers and the American Sweet Potatoes Commission actively promotes this product among the food service industry.”

Move from frozen to fresh prepared foods in food service

The report provides a guide to France’s economic situation and market structure, as well as exporter tips. On the subject of food trends in France it says French consumers desire innovative and more convenient foods offering a quality image, better taste, and increased health benefits

It also mentions that the French food service industry is moving towards fresh consumer-ready products at the expense of frozen foods.
 


Under this category, dried nuts are the majority of U.S. exports, the report says.


 

source: France Exporter Guide, GAIN report FR9175
image of the Eiffel tower as seen from the Champ de Mars: by Edisonblus (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

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Snapshot of the apple market in Taiwan

Taiwan’s love story with fruit remains undiminished

A new report by the USDA’s Global Agricultural Information Network provides valuable insights into the apple market in Taiwan.

Here are some of the repoort’s highlights:

Apples and Taiwan

Apples are the most heavily consumed imported fruit in Taiwan, which has one of the world’s highest per capita consumption rates.
But apples are losing ground to other imported fruits such as cherries, grapes, peaches and berries.
Fuji is the overwhelmingly favourite apple variety, accounting for 90% of total retail.
Red & Golden Delicious, Granny Smith, Gala, Pink Lady, Ambrosia and Aurora make up the remaining 10th of retail apple sales.
Washington apples are extremely popular. (Taiwan one of the top 5 export markets for Washington apples.)
Though eaten year round, significantly more apples are bought in Taiwan in autumn and winter – the prime production months for northern hemisphere growers. (During the summer months, local tropical fruits, such as mangos, papaya, and lychees, dominate.)
Reasons for this include that the apple is perceived as a ‘cool weather‘ fruit and also it is incorporated in several festivals held over this period.

Taiwan’s apple imports

With just 1,506 tons in 2014/15, Taiwan’s declining apple production meets less than 1% of domestic demand so it is reliant on imports but is a relatively mature market for fresh apples.
In 2013/14, it imported a record high 160,756 tons of apples (valued at nearly US $240 million) but in 2014/15 apple imports fell to 156,007 tons (valued at nearly $239 million), with importers expecting 160,000 tons for 2015/16.
Taiwan currently applies a 20% tariff on all apple imports.

Market share of Taiwan’s leading apple suppliers in 2014/15:

  • US: 41.2% (64,264 tons)
  • Chile 29.8% (46,522 tons)
  • Japan 14.9% (23,260 tons)
  • New Zealand 10.7% (16,673 tons)

United States

The US share of the Taiwan import market for apples began a long-term downward trend in 2000 but despite this decline, the US is expected to remain the dominant supplier of apples to Taiwan over the next few years.
In 2014/15, US apple exports to Taiwan increased nearly 29% from the previous year, to 64,264 tons ($79.1 million).
Thanks to an expected record harvest in Washington, which typically accounts for 90-95% of total US apple exports to Taiwan, the US is forecast to hold its position as the leading supplier of apples to Taiwan in 2015/16 with exports of 65,000 tons.
GAIN says importers prefer US apples for the high-quality and consistent supply.
‘New’ rivals for the US are Japan, New Zealand and Korea.

Japan

Japanese apples, accounting for about 15% of the total apple import market in Taiwan, grew 40% in 2014/15 to 23,260 tons thanks to depreciation of the Japanese yen and Taiwan consumers’ decreased concern about potential radiation leaks from nuclear power plants in food products from Japan.
While the US,Chile and New Zealand are still focused on supplying Taiwan market with traditional varieties, Japan is having great success introducing less common varieties in order to maintain the ‘premium’ image and justify higher prices.
It is not uncommon to find Japanese fruit in the market priced at 10-20% higher than other competitors.
Despite Japan being ranked third in terms of import volume, when comparing import value, Japan’s share increased to 28.4% last year and it enjoyed an export value of $2,910 per ton – 137% higher than that of the US at $1,230 per ton.
“This higher margin clearly indicates that Japanese apples continue to dominate the high value gift giving market in Taiwan due to their premium quality and excellent reputation in the perceptions of both traders and consumers,” the report says.

China

China remains prohibited from exporting fresh apples to Taiwan due to phytosanitary concerns.

General fruit consumption in Taiwan

The vast majority of people in Taiwan view fruit as an important part of their daily diet.
Fruit is often consumed as a snack or dessert.
It is the most common food served to visitors at home or in the office.
Unless bought solely for personal consumption, the colour, size, and general appearance of fruit are typically the buying decision factors to traders and customers in Taiwan.
The “best-looking” fruit, typically sold in gift packaging, fetches the highest prices.

Fruit as a gift in Taiwan

People send food products in gift packages to their friends and relatives during 3 major lunar-year festivals:

  • Chinese New Year (usually in February)
  • the Dragon Boat Festival (usually in June)
  • the Moon Festival (usually in September).

Fuji apples replaced Red Delicious many years ago as one of the most popular gift items during the lunar New Year holiday in Taiwan. Thanks to their colourful appearance and relatively larger size, Japanese apples are the most popular gift item during this season.
 

Source: Taiwan: Fresh Deciduous Fruit Annual November 4, 2015 Attaché Reports (GAIN)

Images:
1. Taipei at night, with dreamy sky by Chris: https://www.flickr.com/photos/63138333@N00/314845827
2.  Taiwan-taipei vista de noche ciudad by n23club: https://pixabay.com/es/taiwan-taipei-vista-de-noche-ciudad-497003/

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Major growth, solid profits in New Zealand’s deciduous fruit sector

The deciduous fruit sector in New Zealand is experiencing its third year of solid profits. The sector is now well into a major expansion phase, moving towards a goal of increasing export receipts to NZ$ one billion by 2022.

The deciduous fruit sector in New Zealand is experiencing its third year of solid profits, according to a new USDA Global Agricultural Information Network (GAIN) report.

The sector is now well into a major expansion phase, moving towards a goal of increasing export receipts to NZ$ 1 billion by 2022, up from its best so far of NZ$ 620 million for the year-to-date 2014/2015, it says. And the country’s planted deciduous tree area is estimated to be up 8% for 2015/16 at 9,750 ha and harveste area is estimated at 9,500 ha, a 6% rise on 2014/2015.

New high color varieties, primarily targeting Asian tastes, are being planted.

A cold dry winter in the Hawkes Bay region followed by a rapid increase in temperatures in October 2015 set the trees up for a compressed high volume flower blossoming in October, which augers well for the harvest in March/April 2016, GAIN said.

“Total deciduous fruit production for 2015/2016 is forecast to increase two percent, reaching a level of 565,350 metric tons (MT). With a greater volume of domestically produced apples in abundance during 2014/2015 it is estimated that domestic consumption of apples and pears will be 80,500MT, a seven percent upward shift from the previous year. Again for the 2015/2016 year there will be plenty of domestic fruit in the market and consumption is expected to remain at 80,000MT.

“The greater volume of the apple crop which has made export grade in 2014/2015 means processing volumes are unlikely to have increased as much as was expected back in April 2015. It is now estimated total deciduous fruit processing volumes will be 147,350MT which is still a 28% increase over the 2013/2014 year.”

“For the current year 2014/2015 total deciduous fruit exports are now expected to reach 331,000MT which amounts to a three percent increase from previous estimates. More of the total crop was export grade than had been expected after the hail and storm damage, which has now facilitated the export tonnage increase. For 2015/2016 it is forecast the volume will rise to 342,000MT, a gain of three percent.

“Extraordinary growth in the Asian markets has translated into large export volumes for New Zealand. In fact, in 2014/2015 about 40% of the New Zealand apple export volume has gone to Asian destinations, up from 31% just two years ago. In contrast New Zealand apple exports to Europe and the UK, for so long the key region for export volume demand and overall export returns, have diminished from taking 41% of the export volume in 2012/2013 to this year, 2014/2015, 38%.

“A key element in the relative success enjoyed by New Zealand deciduous fruit exporters in Asian markets has been the negotiation of market access protocols containing sanitary and phytosanitary (SPS) conditions that growers in New Zealand can comply with,” GAIN said.

Source: New Zealand: Fresh Deciduous Fruit Annual, November 5, 2015, Attaché Reports (GAIN)

Image of Tukituki River and Te Mata Peak, Hawkes Bay, New Zealand by Phillip Capper from Wellington, New Zealand [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons

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Good year for apples and pears in Turkey

Turkey is the second biggest producer of apples in Europe behind Poland. Turkey’s diverse geographic regions allow for production of 460 varieties of apples, but only 10 of these are marketed commercially.

Turkey is set for a good year (July 2015-June 2016) for apples and pears as production recovers – up 21% and 37% respectively – after a substantial drop the last year, says a recent USDA GAIN report. Apple production is expected to be 2.54 million tons and pear production 395,000 million tons.

Table grape production, however, is expected to be down 16% to 1.88 million tons due to frost damage in the Aegean region in the spring of 2015.

Middle Eastern countries (namely Iraq, Saudi Arabia, Syria, and Egypt), Bulgaria and Russia are the top export destination for Turkish deciduous fruits. Turkey’s exports of all such fruits increased to Russia in MY 2014 due to Russia’s import ban on European products and the increase was especially substantial in apples (from 319 to 11,848 tons) even though there was an overall decrease in apple exports as a result of decreased production, the report says.

Turkey’s exports of apples and pears are predicted to increase this marketing year due to increased production figures and the eventual decrease in prices, but its grape exports are expected to drop more than 20% and imports are expected to increase accordingly.

Image: the Turkish pear variety Deveci
Source: Global Agricultural Information Network (GAIN) report on Turkey “Fresh Deciduous Fruit Annual”