Bord Bia unveils ‘deep dive’ plan for food exports to Asian markets
A new strategy identifies the prime growth opportunities for exporters, writes
AN ESTIMATED €100m in new contracts for meat exporters announced during the recent trade mission to China could be just the start of a major expansion into the Asian market.
Bord Bia yesterday launched a new ‘market prioritisation’ strategy for the meat industry and it aims to make what it terms a ‘deep dive’ into Asian markets.
A similar approach is planned for the dairy sector.
The new strategy identifies the 15 markets by sector that are likely to present growth opportunities for meat, dairy, prepared consumer foods, beverages and seafood over the next five to 10 years and Ireland’s capability to supply those markets.
An in-depth study on the top five markets by sector is completed for some sectors and close to completion for others.
“The publication of these reports offers concise overviews of 75 in-depth studies conducted across a range of priority markets, representing the most detailed and broad-ranging study of international opportunity ever undertaken on behalf of the Irish food and drink industry,” says Bord Bia.
“Over 180 markets were screened. Initial screening included factors such as size of middle class, urbanisation, rate of growth in food market, imports, prices and tariffs, population projections, income per capita, market access and ease of doing business.”
Irish agri-food exports were worth an estimated €12.6bn last year, 13pc up on 2016 and 60pc higher than 2010.
Although the UK (35pc) and European markets (33pc) remain the lynchpin of the trade, half of last year’s growth came from markets outside Europe, led by a six-fold increase in exports to China, a doubling to the rest of Asia and North America and a rise of 40pc in trade to the Middle East and Africa.
Food exports to China now stand at close to €1bn, making it the third largest individual nation market after the UK and US.
China is Ireland’s second largest export market for pork and it has obvious potential for beef producers.
Minister Michael Creed said that Ireland has the advantage of being the first EU country to gain beef access to China and is likely to gain the greatest market share compared to EU countries such as France and the Netherlands, both of which are on the cusp of gaining access, but selling Irish beef to consumers won’t be without its challenges. For example, although China only imports 4pc of its pork, it has a strong influence over world prices.
Bord Bia’s James O’Donnell envisages this same control over world prices happening with beef as China increases its consumption by more than 700,000 tonnes in the next 36 months.
“As China increases or reduces consumption world prices go up or down accordingly. It was the same situation with dairy. There was quite a lot of speculation in this market, which led to peaks and then quite a big drop and it has taken until this year for prices to recuperate,” he said.
“So when it comes to dairy or pork, China dictates what the world prices of those commodities will be. In the next two to three years we will see China become a major influencer on the price of beef.”
What do Chinese buyers on the ground think of Irish beef ?
Wei Chen, head of the China Meat Association, told the Farming Independent that it is too early to tell how significant an impact Irish beef products will make on a Chinese market that already has long-established trade relationships with New Zealand, Brazil and Canada.
Partnership
“I cannot tell how much quantity Chinese importers will purchase from Ireland but the trend for imported beef products will increase and how the Irish beef producers promote their beef products in China can go three ways,” he said.
“Firstly they could decide what kind of partnership they think will work, secondly by what channel and thirdly to find an effective way that can fit the Chinese market and also fit the Irish market.”
During the trade mission, top meat producers including ABP, Dawn Meats, Kepak, Slaney, Foyle and Liffey showcased their businesses at the Bord Bia Origin Green Stand at the SIAL Trade Show in Shanghai. The show is the largest in Asia and the fourth largest in the world.
Most of the producers agreed that access to the China beef market will help Brexit-proof their beef trade.
“The Chinese are very positive and very keen to get some Irish beef,” said ABP international managing director Mark Goodman, whose company signed a €50m deal with Chinese food supplier Wowprime.
“The main thing about the Chinese deal is that it’s an excellent hedge against the downside risk of Brexit, and we’re looking at a possible Mercosur deal which could increase imports from south America. It’s a hedge against risk.”
Foyle Meat’s Paul Armstrong said that a key challenge is getting Chinese consumers to appreciate the type of grass-fed product we have to offer.
A further three beef processors have been given the approval by Chinese authorities to supply beef to China, bringing the total number to six.
Meat Industry Ireland’s Cormac Healy said: “It’s more important than ever that we push for more companies to be able to export their beef product if Ireland seeks to make an impression on China.
“This is a market of serious scale and if Ireland is to really capture the potential here, we need to get all our meat plants approved.”