Tomatoes have never been more popular in Hong Kong. Not only has the imported tomato volume increased significantly since 2004, Hong Kong has also welcomed more varieties of tomatoes beyond the popular round tomatoes. Promar research analysts Paul Tsai and Yuan Gao visited Hong Kong to understand the current market and assess the future potential of imported tomatoes.

For the past 20 years, China has always been the largest exporter of tomatoes to Hong Kong- currently China holds hold approximately 90% of the market share. In 2004, Hong Kong’s import of Chinese tomato has increased by approximately 4 times in volume. Higher health conscious among Hong Kong consumers is the key factor that drove this demand. The SARS outbreak in 2003 has motivated Hong Kong consumers to eat healthier, which driven sales of fruits and vegetables upwards.

Another factor for the tomato  increase is the improved quality of Chinese tomatoes. While Chinese tomatoes are still not considered the ideal ingredient for cooked food or fresh consumption, their quality and taste have improved over the past decade. Chinese tomatoes’ biggest strength has always been their low price, which is 1/3 of the price of most tomatoes importedto Hong Kong. The future for Chinese tomatoes in the market for fresh tomatoes in Hong Kong looks positive as buyers across the supply chain believe that it will continue to increase in volume.

This is not to say that non-Chinese tomatoes do not have a chance in the Hong Kong fresh vegetable market. European tomatoes imported from Italy and France are the favorites for Hong Kong consumers who demand the highest quality. Tomatoes imported from Holland with  good pricing and a year-long supply are the best-selling tomato product in many high to mid-level supermarkets. Australia and Japan also offer good quality tomato products that could compete with the European products in retail. There has been a trend for Hong Kong consumers to demand higher quality western food in food service. In addition, sweeter tasting tomatoes of European origin are preferred for home consumption, especially for children. These are the key areas in which non-Chinese tomatoes have a greater advantage in the Hong Kong tomato market.

While competition between various countries is becoming more intense, the outlook for both Chinese and non-Chinese tomatoes in the Hong Kong vegetable market remains positive. In the coming years, it is possible that tomatoes could shake off their image as a secondary vegetable on the Hong Kong dining table, where they have been overshadowed by green leafy vegetables.

Photo: Round tomatoes from China’s Shandong Province are the best-selling products in the Hong Kong tomato market.

Promar Consulting has investigated a variety of aspects of fresh fruit and vegetable market in China, Hong Kong and other Asian countries. If you are interested in knowing more please contact us.

China has always been the largest vegetable supplier to Japan. However, there have recently been concerns in Japan that the increasing production costs – wages, land, agrichemicals, etc – could lead to a higher supply cost. Promar research analysts Paul Tsai and Leo Li explored current and future trends in production and marketing of the most popular vegetables that are coming to Japan from China.

Japan’s self-sufficiency rate for vegetables (volume base) has been around 80% for the past decade. Although this is considered to be a high rate, Japan still imports 2 to 3 million tons of vegetables each year. China accounts for 53% of Japan’s total imports last year, which are sold to retail or for further processing. Through our interviews with industry players across five Chinese provinces, Promar learned that while wages, fertilizers, and equipment expenses have increased over the years, the yearly percent increase has been quite consistent. The market price of the vegetables themselves, however, fluctuates dramatically each year.

Changes in Chinese domestic consumer eating habits have also impacted vegetable exports to Japan. A popular China-produced vegetable in Japan, “negi” or leek, is being challenged by demand from China’s own domestic market. According to Promar surveys in several Chinese regions, the Chinese market price of leeks jumped several-fold after the lunar Chinese New Year in 2012. TV programs have promoted the health benefits of leeks, which are a rarely consumed vegetable in China, and this promotion has driven rising demand for leeks. For the first time, this year some Chinese traders are finding it more profitable to sell vegetables to the Chinese domestic market as opposed to exporting to Japan.

It is expected that export prices of Chinese vegetables will likely increase in the coming years due to the rising production costs in China. However, the instability of the market price and the growing local demand are two areas that should be constantly monitored in order to capture an accurate picture of the changes in the Chinese vegetable market.

Photo: Leek factory in China. The orange hoses hanging from the ceiling are used to blow off outer leek leaves using high pressure air.

Promar Consulting has investigated a variety of aspects of the vegetable market in Japan, China and other Asian countries. If you are interested in knowing more please contact us.

English versions of Promar’s recent reports on agricultural issues in Rwanda and Tanzania are now available.
The links below provide a summary of each project and a downloadable pdf file of each report.

Report on Tanzanian Agriculture
Report on Rwandan Agriculture

We always welcome feedback from others interested in sub-Saharan African agricultural trade and development.

A report by Promar research analyst Andrew Lambert on Japan’s growing demand for imported vegetables was published in the February 2012 issue of Asia Fruit Magazine. The article looks at how the long-term population trends, coupled with the lingering impact of last year’s earthquake and tsunami are increasing demand for vegetable imports.

Traditionally, the Japanese market had relied primarily on its domestic vegetable supply. However, the country’s food self-sufficiency rate has been falling, and as a result, vegetable imports have been increasing as a percentage of total consumption, from 9% in 1990 to 25% in 2011.

While this increase in Japanese vegetable imports had been long predicted, the Tohoku earthquake in March 2011 was a tragic surprise.  The resulting tsunami washed-away thousands of hectares of farmland, and radiation from the quake-stricken Fukushima nuclear plant was detected in crops and soil in surrounding prefectures. Restrictions placed on produce distribution after the disaster and increased consumer reticence towards food products from the Tohoku region are still impacting Japan’s vegetable market a year later.

The full article can be found here.
Japan’s Growing Vegetable Imports

Taiwan has traditionally been a big importer of Japan’s Aomori apples. The size, color, taste and shape of the apple make it an ideal product for gift giving, a popular tradition that peaks during the Chinese Lunar New Year. However, recently, Japanese apple exporters have been facing challenges in promoting their product and maintaining their share of the Taiwanese market. As Japan’s Ministry of Agriculture, Forestry and Fisheries looks to improve the promotion for fruit exports, senior consultant Chisa Ogura and research analyst Paul Tsai explored the challenges Aomori apple is currently facing in Taiwan.

Since Taiwan joined the WTO in 2000, more importers have entered the apple business. In-step with the growth in the number of importers, Taiwan has increased its annual imports of Aomori apples from 2,000 tons in the late 90s to 20,000-25,000 tons in recent years. The Aomori apple season goes from October to May. This season, the Japanese apple is facing several significant challenges: higher prices due to the appreciated yen, curtailed supply stemming from lower production, and stronger competition from other countries; these are the main reasons why traders have forecasted a 60% decrease in imports to 12,000 tons this year.

In addition to these difficulties, apple exports are suffering because of the lack of innovative and exciting promotion programs in Taiwan. Annual visits by local growers, government officials and sporadic in-store “sales festivals” have been the long-term norm. However, if Japan wishes to maintain the prominence of the Aomori apple in the Taiwanese market, promotion activities need to be revamped.

Aomori apple will continue to be a popular gift-giving product. Nevertheless, the future of it as a popular table fruit in Taiwan is a challenge which requires collaborative rethinking by Japanese producers, regional governments, and also the central government.

Investigation of current trends and issues in the Agriculture, Forestry and Fisheries of Rwanda and Tanzania

Promar completed field research on agriculture, forestry and fisheries in Rwanda and Tanzania in late 2011 as part of a project for the Japanese Ministry of Agriculture, Forestry and Fisheries.

The purpose of these studies was to provide background for designing aid and technical assistance projects in agricultural development in sub-Saharan Africa, as well as inform private sector investment and business ventures.  Because each country and region in sub-Saharan Africa has significant differences in natural environment as well as in socio-economics, politics and culture, in order to provide effective and efficient assistance, MAFF recognized that it is absolutely essential to have the most current information on the agricultural conditions and the major challenges facing the individual countries and the regions within them. Therefore MAFF has been supporting the collection and analysis of information related to the overall agricultural sectors in various sub-Saharan African countries.

Rwanda Report

Tanzania Report

Promar continued to grow its single-client, propriety coverage of global food, beverage, and commodity markets in the last two months with the initiation of regular reports on Japan’s oilseeds and grains markets and the Chinese and Hong Kong fruit market.

Japan Soybean Market Intelligence, a monthly report provided to the American Soybean Association-International Market group, began in December and Promar just recently published the first 2012 issue, which is available here: http://www.asaimjapan.org/news/pdf/20120208_Japan_January_ASA_IM_Newsletter.pdf

In January, we began covering the Chinese and Hong Kong fruit markets, with a focus on table grapes, for the South African Table Grape Industry. Promar’s reports are published twice-monthly and cover relevant trends in production, imports, prices, and policy in both markets

The Japan soybean report is the third Promar publishes on global grains and oilseeds markets. For more than four years, Promar has been providing the Japanese Ministry of Agriculture, Forestry, and Fisheries data and analysis on grains supply & demand in key producing countries, such as the US, Australia, the EU, and South America. For the past three years, we have also provided weekly and monthly analysis of the Chinese oilseeds and grains market, with a focus on soybeans and the feed and oil markets, to a US-based client.

Promar has also long been providing regular intelligence on the Japanese seafood to the Norwegian Seafood Council.

The climate effects of La Niña includes severe droughts in Brazil, Argentina, and other parts of South America. When this phenomenon last occurred in 2010/11, it was relatively moderate and did not significantly affect soybean and corn yields. However, when La Niña appeared back in 2008/09, was said to be the worst in 100 years.
In 2011/12, harsh droughts struck again. This time it is said to be worse than that of 2008/09. This study uses the most recent data, and first hand information, to explore how much damage is done to productivity and production of both soybeans and corns in Brazil and Argentina.

Read the rest of this page »

Consultants Lucia Vancura and Ayako Kuroki spent several weeks of field research in Tanzania where they documented issues and challenges within the Nile Perch fishing and processing industry in Lake Victoria and in the banana industry in the Arusha area.  They also investigated what is sometimes referred to as BOP (Base of the Pyramid) business ideas to understand how enterprises are providing new products and services to rural and poor citizens. They met several major corporations in South Africa involved in rural telecom and fertilizers as well as many entrepreneurs in Tanzania producing products like fortified and nutritious flours (at Nyirefam and AfriYouth Pride) and bicycle-powered corn shellers at Global Cycle Solutions.

Promar’s focus on the banana industry included discussions with Banana Investments Ltd. in Arusha, an entrepreneurial business that targets low income consumers with their banana alcoholic beverage and banana wine. Although it is a growing business, Banana Investments faces many of the same challenges other Tanzanian entrepreneurs face: unpredictable power supply, quality raw material supply and financing.

With no lack of entrepreneurial ideas in Tanzania, the challenge is finding realistic ways to bring the financing and infrastructure that are essential for these companies to grow and provide services and employment in Tanzanian communities. Promar’s latest step has been meeting with leading professionals in agricultural investment and development in the UK, a country known for its innovative approaches towards agricultural development in Sub-saharan Africa. These talks with NGOs, private sector investment funds, DIDF Challenge Funds and others are providing lessons and models that can ideally inspire further support for sustainable agribusiness in Tanzania, especially among the Japanese public and private sector.

Photo: Banana Investments’ two banana alcoholic beverage products at their factory in Arusha. The company uses recycled Heineken beer bottles for bottling the banana beverages.

There are many lists available ranking China’s Second Tier Cities (STCs) – those important Chinese cities outside the Big Three (Beijing, Shanghai, Guangzhou). However Promar has prepared the first guide which prioritizes, ranks, and compares the Top 25 STCs as to their future potential to import foreign food and beverage products. This is a great guide for aggressive exporters or investors in China.

This report is the first of a series of Guides which, depending upon client demand, may be updated every 1-2 years – and also may become more targeted toward specific foods in the future. This one is free for you to download. Please drop us a note if you find it useful.

SPECIAL REPORT: China’s Top 25 Second Tier City Food Import Prospects 2012

For more information about this subject, please contact Promar’s President John Ward at:
jward@promarconsulting.com