NEW EXPORT MARKETS FOR ASIAN VEGETABLES - HOW CAN WE HELP YOU?

David Gallacher
Central Queensland University, Rockhampton (07 4930 6583)

One aim of government research into new and emerging industries such as Asian vegetables is to pave the way for new markets. In some cases the new market for Australian producers may be a replacement of imports (eg; bamboo shoots, waterchestnuts and taro) but for most Asian vegetables it is a new export market. Another justifier for research in more established crops such as Chinese cabbage, is to strengthen the local industry against the threat of future imports. Whether the research is selecting new varieties, studying diseases or developing industry structures, the aim is the same: to hold on to or expand the markets available to Australian producers.

Since new export markets is the main focus in this industry, we will look at how new export markets form, what hinders them, and what government can do to help. New crop industries tend to follow a pattern:

1. Product is introduced on the domestic market. Many Chinese vegetables have been available in Australia since the 1850's, but vegetables specific to the Japanese markets (e.g. burdock) have arrived relatively recently. Following introduction, prices are very high and volume is small, limited to restaurants and as a luxury domestic item (e.g. yam bean).

2. Production increases. With high prices, domestic production naturally follows as producers wish to cash in on high prices and an expanding market (e.g. current expansion of taro production).

3. Prices drop. Even if markets grow, as they are with most Asian vegetables, growth in production will likely be faster so prices will still drop. This occurred recently with tropical melons, and will probably occur soon with taro.

4. Turmoil. With lower prices the industry undergoes a transformation. Less committed producers change to other crops (e.g. the trend away from bitter melon and snake beans in NT), while the more committed producers become more efficient. Production costs are reduced, perhaps by increasing total volume, and quality may be improved to get a higher price. A problem with our industry is that many producers are willing to survive for a time on very marginal profit. Prices remain low and innovation is minimal, which means that issues important for export may not be addressed.

5. The market matures. Fluctuations in domestic demand and supply settle down. They still change, since seasons and consumer requirements never remain constant, but the change is less extreme and producers have a relatively stable income.

6. Exports. Producers now have the skills to consistently grow and sell a marketable product. Ideally, producers will have addressed quality issues to establish a better reputation than their competitors, and can therefore supply a consistently high quality product for much of the year.

An export industry cannot develop unless there is first a domestic market. There are some exceptions, such as crops grown on contract (eg; vegetable seed production), but in most cases producers need the testing ground of a local market with which to refine production. If the domestic market is small, there may not be enough competition to refine production methods, and the jump in scale to provide for exports may be too big. In such cases (eg; burdock), exports may not occur unless government or a multinational company intervenes.

Producers need access to good information on production and postharvest methods so they can adapt quickly to new crops with minimal losses. Our project provides general information on a range of Asian vegetables by summarising from books, journals, the Internet, and from talking to producers, seed merchants and produce dealers. Gaps in this knowledge are being filled by a range of experiments being conducted across Australia. The information can be viewed on the web site science.cqu.edu.au/psg/AsianVeg.html and will be printed for distribution later in the project.

Wanted: Readers' Contribution!! We are looking for contributions from you our readers. If you have any ideas or comments you want to make on the Asian vegetable industry or the newsletter, we would like to hear from you. We hope to have a readers' column in future issues but we need YOUR support !!! Editors

Our project is aimed at addressing two of the three main areas where government can help: access to supply chain and market information, and improving collaboration within the industry. The third area we do not touch on is direct financial support in gearing up to size and stabilising export price fluctuations. By addressing these issues, and by understanding the process of new crop development, we hope that Australian producers will find and succeed in new export industries to Asia.

Pick from the RIRDC book shelf

Asian Food in Australia - Getting a Bigger Bite INSTATE Pty Ltd
RIRDC Research Paper 94/5
$35 ($amp;6 p&h) 88 pages

Examines particular structural changes in Australian demographics and tastes and assesses their impact on the domestic market for foodstuffs. Includes recommendations for action which governments and industry might consider to stimulate more processing of Asian-style foods in Australia both for domestic consumption and for export.

The book can be purchased from
Rural Industries Research and Development Corporation (RIRDC)
P.O. Box 4776, Kingston, ACT 2600, Phone: (02) 6272 4819, Fax: (02) 6272 5877
Webpage: http://www.rirdc.gov.au/

For more RIRDC publications see our first 'Asian Foods' Newsletter.