Shirley Ng, international business development manager for the Victorian Employers’ Chamber of Commerce and Industry, highlights Victoria’s potential as a source of premium food and fibre for Asia.
Agrifood businesses across the state known as Australia’s food bowl are hopeful that the activation of a free trade agreement with China later this year, in addition to recent agreements with Japan and Korea, will usher in an era of unprecedented growth and innovation on Victorian soil.
According to the Department of Environment and Primary Industries’ latest report,Victoria’s food and fibre exports accounted for $AU11.4 billion in the 2013-14 financial year. Solidifying the state’s position as Australia’s biggest exporter of food and fibre, including 85 per cent of national dairy exports, this represented a year-on- year value increase of 12 per cent and almost half of total goods exported from Victoria. In volume terms, Victorian food and fibre exports grew by 22 per cent to south-east Asia, by 10 per cent to the region classified as south Asia and 8 per cent to north Asia. Focusing in to look at on our largest trading partner, export of these commodities to China more than doubled between 2004 and 2013, with dairy exports to this market now valued at $369 million and meat exports rising significantly in 2013-14 to $361 million.
A temperate climate, rich soils, skilled producers and reliable support services have helped Victoria develop a global reputation for safe, high-quality food and fibre, but business owners and policymakers realise they cannot be complacent in 2015 as other global players rush to capitalise on the Asian dining boom.
A 2013 report by professional services firm Ernst and Young forecast that Asia’s growing middle class will be three billion strong by 2030, while projections as the number of these consumers that will be living in China range from 500 million to one billion. With the Commonwealth Government having predicted that China will account for 43 per cent of the projected 70 per cent increase (on 2007 figures) in global food demand by mid-century, Victorian producers are more focused than ever on discovering the needs of Chinese consumers and cultivating strategic partnerships.
Successive state governments have recognised that as Asian populations become increasingly wealthy, urbanised and connected to Western culture, so will their food demands transition from low-cost staples and meats to the higher- yield protein, specialty dairy and organic food products that Australia is famous for. Earlier this year the Andrews Government reaffirmed the importance of the food and fibre sector by pledging $20 million to Food Safe Victoria, a program designed to support the training of young farmers and encourage producers from the same region to collectively market to exporters. This added to existing support available through the $200 million Future Industries Fund. If Victoria is to double its food and fibre output over the next 15 years as touted by some industry leaders, technological innovation and uniquely collaborative business relationships must surely come to the fore.
Victorian food and fibre by the numbers*
*2013-14 Australian Bureau of Statistics
278,950 – Victorians employed in food and fibre production and manufacturing
18% – Year-on-year volume increase in food exports
$908m – Value of prepared food exports in 2013-14
70% – Year-on-year value increase in meat exports to China
26% – Year-on-year volume increase in honey and sweetener exports
20% – Maximum to be eliminated from tariffs on dairy products under ChAFTA
12,000 – Year-on-year increase in tonnes of non-alcoholic beverage exports
40% – Value share of Australian fibre exports
45% – Year-on-year value increase in confectionery exports
52% – Value share of Australian horticulture exports
32% – China’s volume share of Victorian food and fibre exports
The Victorian Employers’ Chamber of Commerce and Industry (VECCI) helps businesses assess and boost their export capabilities through a range of consulting services, training and practical tools. Our experienced global trade advisors know that China should not be treated as a single market, but rather as a diverse series of markets with unique tastes and demands. Through initiatives such as the Victoria Jiangsu Business Placement program our members benefit from collaborative partnerships with their Chinese counterparts. VECCI has also forged a new path for Victorian producers of non-perishable food and beverage items into the world’s largest e-commerce market by streamlining the importation process for the China eCommerce Platform. From this winter, suppliers on the platform will be able to promote their brands to consumer and corporate users of chaoshi.tmall.com, which is part of the Alibaba online marketplace.
As Asian consumers become more familiar with not only the taste but also the health benefits of Victoria’s high- quality food, local growers and exporters need to leverage their reputation for premium, traceable and safety- assured produce. While academics highlight that rising consumption of western food products in Asia opens the floodgates for importing western health problems such as obesity, Victorian expertise in delivering raw and minimally processed foods quickly and safely must be maximised. By prioritising ethical business practices and technological innovation, in food labelling and distribution for instance, Victoria’s agrifood leaders could establish new and exciting ways to trade with Asia.