Australian Business Forum helps Australian SMEs and businesses to understand the Chinese market and refine their China strategy.
http://abf.events/
ABOUT THE PRESENTATION BELOW
Anthony Plummer of Trade and Investment Victoria, presents on opportunities for food and agriculture in the Asian Century, the fast-growing meat and dairy sectors, the China Australia Free Trade Agreement and finally how the Victorian Government is combining all of these opportunities to drive agribusiness in coming decades.
Originally presented at Australia-China BusinessWeek 2015 Melbourne
4. 4
Diversity is a strength
2.34
2.3
1.96
1.43
0.91
0.89
Meat
Dairy
Grain
Animal fibre
Prepared foods
Horticulture
2013-14 exports in AUD$ billion
5. South East Asia
22% -- $2.3 billion
• Meat 45% -- $379
million
• Dairy 36% -- $761
million
North Asia
8% -- $4.4 billion
• Meat 57% -- $772
million
• Dairy 16% -- $919
million
South Asia
10% -- $598 million
• Horticulture 118% -- $135 million
• Dairy 82% -- $90 million
MENA
(Middle East and North Africa)
14% -- $1.5 billion
• Horticulture
148% -- $96 million
• Grain
13% -- $511 million
Total exports
12% -- $11.4 billion
• Meat
36% -- $2.3 billion
• Horticulture
48% -- $894 million
Consistent growth in 2013-14
10. ... Growth in key markets is still relatively strong
11. 11
... a big and growing ‘consumer’ class
0.5bn
1.3bn 1.7bn
3.2bn
Asia
Rest of
the world
Projected middle class populations
2009 and 2030
2009 2030
Source: ANZ Greener Pastures; Kharas 2010
12. - Higher value, premium products (food service ingredients, baby formula)
- Long-life/UHT and fresh milk
- Leveraging world-class food safety systems
- Premium chilled cuts, especially in food service
- Specific consumer requirements (e.g. Halal) and ‘co-products’
- Leveraging world-class food safety and traceability systems
- Developing containerised (as well as bulk) supply
- Tailoring products for specific markets (e.g. noodles in Asia, flat breads in the
Middle East)
- Fresh fruit e.g. citrus, table grapes, summerfruit and pome fruits
- Nuts, especially almonds
- Exploiting counter seasonal products - fresh and clean
- Retail-ready consumer products, convenience foods and health products
- Luxury goods, including wine and specialty cheese
PREPARED FOODS, BEVERAGES AND WINE
HORTICULTURE
GRAINS
BEEF AND SHEEP
DAIRY
Key opportunities
13. Particular demand for protein…
0
5
10
1980 2010
0.5
5
0.5
3.5
Sheep
Beef
Consumption per capita
Kilograms
16. … and consumers want to know more
• About where their food comes from
• How its produced
• Who has produced it
• Shorter supply chains
• Connection with producers (agri-tourism?)
19. Bottom line:
consumers expect food safety and quality
Robust food safety regulation
• PrimeSafe
• Dairy Food Safety Victoria
• Federal Government
Well regarded biosecurity systems
• Mandatory tracking of livestock through the
National Livestock Identification System
Industry quality assurance systems
• Contemporary industry-led QA systems
21. Wine
- 15% tariff on wine eliminated
immediately
Horticulture
- Tariffs of between 8 – 24% on
cherries, almonds and dried
grapes eliminated immediately
- 45% tariff on potatoes,
oranges, mandarins, table
grapes halved immediately,
then phased out over 5yrs
Dairy
- 36% tariff on cheese and
89% on butter eliminated
between 13-20 years
- Growing duty free quota for
cheese, butter, infant formula
Korea-Australia Free Trade Agreement
Grain
- Growing duty free quota for
malt and malting barley
Red meat
- 40% tariff on beef eliminated
over 15 years
- 22.5% tariff on sheep and goat
meat eliminated over 10 yrs
22. Dairy
- Duty free quota for cheese
- Duty free access for protein
concentrates, lactose, casein
- New opportunities for dairy
desserts
Japan-Australia Economic Part. Agreement
Beef
- 38.5% tariff reducing to
19.5% over 18yrs
- Reducing to 23.5% over
15yrs for chilled beef
Wine
- Elimination of 15% tariff on
bottled wine over 7 years
- Tariff on bulk wine eliminated
immediately
Horticulture
- Fast tariff elimination on most
fruits, vegetables and nuts
Grain
- Duty free access for feed grains
Seafood
- Duty free access for lobster,
shellfish, crustaceans
23. Sheepmeat
- 12-23% – 8 yrs
- 10% live sheep – 4 yrs
Skins and hides
- 5-14% - 2-7 yrs
Horticulture and wine
- Tariffs as high as 30%
eliminated over 4yrs
Grains
- 3% tariff on barley and 2%
tariff on sorghum eliminated
immediately
- 10% tariff on wheat gluten and
malt eliminated over 4yrs
Dairy
- Tariffs as high as 20%
phased out over 4-11yrs
- 15% tariff on milk formula
phased out over 4 yrs
China-Australia Free Trade Agreement
Beef
- 12-25% on beef – 9 yrs
- 5% on live cattle – 4 yrs
28. Avalon International
Airshow 国际航展
Jean Paul Gaultier
让 保罗·高缇耶展
White Night
白夜节
AFC Asian Cup 亚洲杯足球赛
Australian Open澳网公开赛
Cadel Evans Road Race
卡德尔·埃文斯公路自行车赛
ICC Cricket World Cup
板球世界杯
Superbikes世界超摩赛
Formula One Grand Prix
一级方程式赛车
Festival of Racing 赛马节
Flower & Garden Show
墨尔本国际花卉园林展
Fashion Festival 时装节
Food & Wine Festival
美食美酒节
Comedy Festival
喜剧节
Chinese New Year
中国春节
9 January – 29 March 2015
2015年1月9日-3月29日
墨尔本的80天
2015年1月9日-3月29日
Introduction
Today’s presentation covers three areas
First: the opportunities and challenges for food and agriculture in the ‘Asian Century’
Second: what that means for our fastest growing sectors – meat and dairy
Third: FTA
Fourth: What the Victorian Government is doing
In 2013-14:
Victoria’s total $37.4 billion (goods and services exports were worth)
Food and fibre exports were valued at $11.4 billion, or 31% of Victoria’s total exports
Food and fibre exports equivalent to education ($4.7 billion), tourism ($3.5 billion) and business services ($3.4 billion) combined.
Victorian food and fibre exports were valued at $11.4 billion in 2013–14.
Year on year value growth of 12 per cent - $1.2 billion on 2012–13.
Food alone $8.7 billion, an increase of $1.2 billion from 12-13.
Victoria accounts for 29 per cent of Australia's total food and fibre exports and is Australia's largest state exporter.
5 most valuable - China, Japan, USA, New Zealand, Indonesia,
The value of fibre products (including animal fibre, skins and hides and forest products) increased by $50 million from 2012–13, to be valued at $2.6 billion†.
The five most valuable markets for Victorian food and fibre exports accounted for 46 per cent of the State's food and fibre exports in 2013–14.
Victoria's 10 most valuable food and fibre export markets in 2013–14 were China, Japan, USA, New Zealand, Indonesia,
Malaysia, Singapore, Hong Kong, United Arab Emirates (UAE) and Thailand.
Milk production doubled, same cows 35 % reduction in grazing area – over 30 years
Milk yield per cow has almost doubled and the stocking rate has increased by 50 per cent
Processors are making large investments in the facilities and technology needed to produce transformed dairy products, such as lactoferrin and other milk extracts, to draw greater value from raw milk and capture higher margins in growing export markets
Growing populations and incomes
Asia’s consumers are increasingly demanding the premium, safe food and beverages that Victoria takes pride in producing
Australia won’t be Asia’s foodbowl, producing enough food for 60 million across the country (for a population of 22 million)
China – 1.35 billion
India – 1.25 billion
Indonesia – 0.25 billion
US – 0.32 billion
China
1.3 billion people
wealth of the eastern seaboard
Enormous growth potential in the Yangste River Delta
Growth average 10% for 30 years
Slowing to 7% in 2013.
Australia and Canada 2-3%.
Europe – 0
Chinese Economy > $10-trillion
Asia’s ‘consumer class’ is rapidly expanding
Asia’s ‘consumer class’ is forecast to expand six fold from 525 million to over 3 billion by 2030
China and India alone will contribute 40 per cent of global middle class consumption by 2030, rising to 54 per cent by 2050
Victorian food producers and exporters can make an even greater contribution to the Victorian economy and job creation
Note: middle class is defined as households with daily expenditures between $10 and $100 per person in purchasing power parity terms (Source: Homi Kharas, Brookings Institute)
Opportunities for Victoria’s most competitive food industries
For dairy:
There are opportunities for longer shelf-life milk and higher value, premium products such as food service ingredients, baby formula, and specialty cheeses
We can also leverage our world-class food safety systems
In red meat
Premium chilled cuts, halal, semi-processed ‘smalls’ carcasses, as well as offal or ‘co-products’ (especially in South East Asia)
Can also leverage our traceability and tracking systems
In grains:
There’s a big opportunity, especially with containerised grains, to tailor our product for specific market requirements such as noodles in Asia and flat breads in the Middle East
For horticulture:
The growth opportunities as a counter seasonal supplier are perhaps most significant, with demand for clean, green fresh fruit (e.g. citrus, table grapes, summerfruits, apples and pears) and nuts from Sunraysia and the Goulburn Valley
There is growing demand for retail-ready products, including health-foods and convenience foods, given the growth in supermarkets and cold-chain infrastructure throughout Asia.
Interest in premium Victorian wines is also growing, especially in China and in food service
The China's annual per capita consumption of sheep meat and beef has risen from just 500 grams of each three decades ago to 3.5 kilos and 5 kilos respectively (in 2010);
Beef and Lamb in China
2013 – sheepmeat imports by China doubled - reached a record 254,000 tonnes, up from 124,000 tonnes in 2012
2014 Beef exports from Victoria to China – 34,000t / $141m
2014 Sheep exports from Victoria to China – 30,000t / $131m
China – 2nd largest market for meat 78,000t / $361m
# 1 wool market ($875 million)
Growing demand for meat
Beef consumption in China still lags far behind pork and chicken, though middle-class tastes for Western food options have pushed consumption to about 4.5 kilograms per person each year. Pork consumption is about 37 kg per person annually (in 2012)
Strong global demand
weakening AUD$
Outlook positive
Highly mobile
May hit 90% penetration for smartphones this year
618 million Internet users, 80 percent of whom access the Web via their smartphones
Online shopping accounts for 10% of retail sales,
Growing at 40% pa
Laptop story
Marketing material for Australian Beef in Shanghai City Shop Supermarket
May not be lowest cost
15% on wine eliminated immediately
8-24% on cherries, almonds and grapes immediately
Photograph of Australian beef eye fillet for sale in Qingdao – 366 RMB (AUD$73) per 500 gram – AUD $140 per kilogram
On full implementation, 95 per cent of Australian goods exports to China will be tariff free.
More than 200 buyers from across Asia visited Victoria last week as the Andrews Government hosted its first inbound trade mission.
20 fruit buyers visited the wholesale market, fruit orchards and packing sheds
60 food buyers visited cheesemakers, chocolate makers, nut processors and beef cattle farms across Victoria
China, India, South-East Asia and the Middle East
Very responsive to Australian growers and their food.
The Government is focused on inbound trade missions, inviting overseas buyers to visit Australia. This was the first of many under the Government’s Victorian Invitation Program, which shows international buyers what Victoria has to offer in food, fibre, cars, education and medical technology. Inbound trade missions create relationships that can become great business partnerships. They are an opportunity for delegates to be on farms, taste food and see where it is grown, packed and sold. Victoria is Australia’s leading food and fibre export state — worth $11.4 billion in 2013-14. The Government is in discussion with industry on the outcomes of the mission. Initial indications and feedback are overwhelmingly positive with projected food sales in the tens of millions.
Market access
Market development – trade missions, promotions
Market intelligence
Photograph – market access cherries - Dalian Agricultural Research Institute and Yantai Cherry Growers Association
Victoria Week Trade Mission to India - Closes today - 20-24 April 2015
Food and Hotel Indonesia April 2015
HOFEX, 6-9 May 2015
Seoul Food and Hotel, 12-15 May 2015
Meet the Winemaker – 25-28 May 2015
You will need to meet the following criteria:
be headquarterd in Victoria or be able to demonstrate a significant contribution to Victoria’s exports and jobs
be directly engaged in the industry in which the Trade Mission is focused or in business aligned with Trade Mission objective. (Professional service firms (such as accounting and legal), , chambers, municipal councils, and freight companies may apply but will not be eligible for a grant). Industry associations directly representing member companies may be eligible for the grant
be financially viable
have a sound case for doing business in the region in which the Mission is focused
be currently exporting or demonstrate export readiness
be (or will be) exporting goods or services that are of Victorian origin or demonstrate that significant value add has taken place in Victoria. (Consolidators may only promote Victorian product during the trade mission)
be represented on the mission by an employee or officer of the company. Distributors, agents or other in market representatives may be invited to participate in events but will not receive grants and are not automatically entitled to all the privileges of a trade mission participant
not be seeking alternative funding for the same expenses being sought or obtained for this mission