here is a huge amount talked about the so-called BRIC countries - Brazil, Russia, India and China - and the impact that they will have on the production, processing, import and export of horticultural produce in the future.
For the BRICs, the first priority is often to feed their domestic population, as well as in the longer term looking at potential export opportunities. China, India and Brazil have become increasingly important in the export arena, while Russia has become one of the largest fruit import markets in the world. The influence of the BRICs, both direct and indirect on the UK, is set to grow in the future.
There is a danger that with something of a preoccupation with the BRIC countries, however, we lose sight of the fact that there are, of course, plenty of other potential sources of supply for fresh product. At Promar we believe these will have an increasing impact on the UK and other international markets over the next 10 years.
We have taken just four of these to give an indication of what we see happening. Each are very different in terms of socio-economic structure and their agricultural sector, but will be increasingly influential in international markets in the future.
Peru
Situated on the Pacific coast of South America and with a population of some 30 million, over the past two decades Peru has emerged as a significant fruit and vegetable exporter. This has been driven by the combination of an advantageous climate, relatively low cost production and preferential trading agreements with key international markets.
While coffee remains Peru’s most important agricultural export crop, more than 60 per cent of all agricultural products currently exported are now fruit and vegetables. Total Peruvian fruit and vegetable production has increased by 48 per cent from 2000 to 2010 to some 7.5 million tonnes, of which around 12 per cent is now exported.
Plantains are the single biggest product, with production increasing by 38 per cent over the past 10 years, but only four per cent of the total plantain crop is exported. The single largest export product is asparagus, with exports accounting for 30 per cent of the total produced. Peruvian exports of all horticultural products have increased significantly over the last 10 years, with major increases seen particularly for grapes, avocados, watermelon and citrus.
The major advantage which Peru as an exporter is its consistent supply due to its highly predictable weather. With a location close to the equator, it gives Peru more or less even daylight length throughout the year. As such, problems such as frost are more or less eliminated. With proper water management, products like asparagus can be grown year round. Peru’s physical proximity to the US means it is the largest export market, taking 40 per cent of all fruit and vegetables. This is then followed by the Netherlands, Spain and the UK.
Uruguay
Situated in southern South America, Uruguay has a small population of just 3.5 million, but an economy characterised by having a highly export-orientated agriculture sector. Horticultural production has increased by almost 13 per cent since 2000, reaching some 750,000 tonnes in 2010. The majority of production is centred on citrus, with oranges totalling 155,000 tonnes in 2010 - up by 40 per cent since 2000. Tangerines, mandarins and clementines have also increased significantly, by 86 per cent since 2000, to reach 121,000 tonnes in 2010. Uruguay now exports 22 per cent of its horticultural crop compared to just 14 per cent in 2000.
The EU is the biggest market for Uruguay, with its four largest export partners being in the EU (Netherlands, the UK, Spain and Italy). This is despite competition from other export countries, who unlike Uruguay benefit from zero tariffs. Citrus is the largest export category with oranges, tangerines (including mandarins and clementines), lemons and limes all seeing an increase in exports since 2000 of 63 per cent, 119 per cent and 17 per cent respectively. Other minor exports are made of niche crops, such as blueberries, and these are expected to increase in the future.
Thailand
With a population base of some 70 million, Thailand produces a wide range of tropical fruit and the production and the export of food per se is now a key industry in Thailand. Of the total land available, some 41 per cent is used for agriculture, with half still used for rice production. The diverse climate and weather conditions during the summer, rainy and winter seasons allows for a great diversity in horticultural production. This includes over 70 different vegetables and over 40 types of fruit.
Total horticultural production is now around 11 million tonnes. Pineapple had long been the largest single product, but in recent years, mango has become the top product grown in Thailand. The growth in the mango category has been almost 60 per cent over the past 10 years to reach some 2.5 million tonnes per annum.
Thailand has become an increasingly important exporter and now exports some 2.5 million tonnes per annum. It has a strong private sector and has also taken advantage of membership of key trade and economic organisations such as the WTO, ASEAN and APEC. Thailand also has a good agricultural R&D system.
Thailand’s export markets are primarily in other Asian countries, with over 60 per cent of exports now going to China. Other significant markets include Japan (seven per cent), the USA (four per cent) and Indonesia (four per cent). Exports to the EU for fresh produce are still relatively small, although it is a significant supplier of a range of processed products. Thailand’s exports will be boosted further by efforts to develop new markets such as the Middle East in the future.
Namibia
With a population of just over two million, commercial horticultural production is still an emerging industry. Total production increased by 157 per cent between 2000 and 2010, to just over 100,000 tonnes.
The single biggest product grown in Namibia is the grape, production of which has increased 466 per cent to 21,000 tonnes over the past 10 years - still a small overall volume compared to other international suppliers, but most of which is now exported. Other key fruits produced include tomatoes, melons, oranges, dates and mangoes, with vegetables including onions, cabbage and other brassicas, carrots and root crops. Exports have traditionally accounted for around 30 per cent of production, reaching around 27,000 tonnes.
The EU, and in particular the Netherlands, is the key international market for Namibian exports, accounting for some 29 per cent of total exports. The export market for Namibia is, however, quite diverse, with the UK also accounting for a 22 per cent share as well as Angola (18 per cent) and South Africa (11 per cent). Due to the limited volumes grown in Namibia, many fruit and vegetables are also imported, including apples, potatoes and many processed products. Though the imports are primarily for domestic consumption, many are re-exported.
Common Threads
Four emerging countries of supply - all very different in terms of geography, production, exports and scale of activity. Yet they have more in common than appears at first sight, including:
• rapidly increasing horticultural production over the last 10 years
• exports leading the way forward
• the role played by a favourable enabling environment, including that played by international trade and market access arrangements
• regional markets are often as important as more long-distance customers
• the need to produce and export higher value horticultural products
• the need to identify new markets in terms of geography and the actual route to market
• the opportunity for future niche production and supply
• the ability to put established suppliers under further pressure in key international markets.
All four countries have identified horticulture as a key future growth sector for their economies. -
THREE MORE TO WATCH
Slovenia
Farming in Slovenia has historically been a challenge as more than three-quarters of the land area is classified as less favoured (LFA) with factors that limit farming, such as the high altitude and sloping terrain. In spite of this, following its entry to the EU in 2004, Slovenian agriculture has blossomed. Production of apples in Krsko as well as olives and pumpkins in the hills and the Pannonian plain is soaring.
One example of a Slovenian company that has established itself as an exporter to the UK is Evrosad, the country’s largest top-fruit producer and packer. Evrosad farms more than 500 hectares of apples, pears and stonefruit, marketing around 1.2m 13kg cartons of fruit annually. The UK is its single largest export market, accounting for the lion’s share of its Gala, Braeburn and Golden Delicious production.
Mauritius
Located off the south east coast of the African continent in the Indian Ocean, Mauritius is a small island that relies heavily on its exports, of which sugar production used to be the cornerstone until the government decided to embark on a diversification program.
Nowadays fresh produce plays an important part, and production of pineapples, mangoes, bananas and breadfruit have increased significantly. So has the production of flowers - anthuriums, andreanums and other flower varieties grown on the island are exported to Europe, Asia, Australia and the United States.
Pakistan
Agricultural growth in Pakistan has been well below potential in the past despite its favourable resources, such as vast irrigated land areas. However this is changing, and Pakistan now exports onions, potatoes, apricots and oranges as well as mangoes, especially from the Punjab region. Apple orchards and olive groves can also be found in the border areas. Overall, horticulture is the third fastest-growing sector, after livestock and wheat.
Liz Bonsall is a Research Analyst with Promar International, a leading agri-food marketing and business development consulting company with a strong track record in the fresh and processed horticultural sectors, and a subsidiary of Genus plc. She can be contacted at Elizabeth.bonsall@genusplc.com.
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