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AGRIBUSINESS | Adam Soliman, Hong Kong
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Adam Soliman

Why Hong Kong is a hot market for Australia's food producers

BY ADAM SOLIMAN

Hong Kong is a densely populated city with very little agricultural land. Therefore, the city relies heavily on imported produce and meat to feed its population.

Hong Kong’s importers and distributers are always looking for good quality food, and Australian agricultural products have become coveted for their high quality.

Both countries will benefit from establishing agricultural trade relations: Hong Kong needs the food, and Australia plans to increase its food exports by up to 45 percent by 2025.[1]

Enhanced agricultural trade could dramatically increase Australian food exports, while HK consumers could enjoy high quality Australian grown food at competitive prices.

Due to its interest in exporting food products to Hong Kong and the Asian Pacific, the Australian government has allocated $5.6 million to expand Australia’s network in the international agricultural market, and to increase market liaisons in Asia.[2]

An additional $40 million will be used for research and marketing, including a “Productivity Commission” inquiry for reducing administrative obstacles and “red tape” that may interfere with food imports to foreign countries.[3]

One outstanding aspect of Australian food production is the enforcement of strict food safety regulations, which enables the country to produce premium quality agricultural products; this provides Australia with an additional competitive edge, beyond comparable pricing.

Many consumers in Hong Kong regard the origin of their food as an indicator of quality. Thus, HK grocers and supermarkets voluntarily label the “country of origin” as a marketing technique.

In other nations the origin of food is regulated by law, and they tend to favour domestic products over imports. But Hong Kong residents prefer food imported from specific countries, including Australia.

Therefore, it is in the interest of Australian food distributors to establish PR campaigns to boost sales in HK. Furthermore, many Hong Kong consumers are becoming highly conscious about food safety and ethical food production; hence, Australian producers can enhance their reputation by promoting the sustainability attributes of their products and the country’s superior food production regulations.

In particular, Australia has strict agriculture labour laws which promote workers’ safety, and thus contribute to ethical food production.

This June, Joe Ludwig,  then Australia’s Minister for Agriculture, Fisheries and Forestry, met with the agribusiness delegate from Hong Kong at the 2013 AUSVEG convention in Queensland.[4]

The purpose of the convention is to attract food importers from around the world in order to facilitate trade opportunities in foreign markets. The Hong Kong delegation was invited to tour Australia for a reverse trade mission.[5]

Currently, Australian food growers urgently need to increase their food exports, because the domestic market is becoming densely saturated. On the other hand, Asia’s wealth and income is rapidly growing, and this has enormously increased demands for food imports.

The Asia food boom can generate significant export opportunities for Australia.

A report released by ANZ Bank estimates that Australia can make up to $1.7 trillion of revenue from agricultural exports from now until 2015. However, the country needs to act fast on establishing trade agreements with Hong Kong and other Asian cities during their economic boom.[6]

To become a key supplier of food in Asia, it is critical for Australian producers to improve agricultural operations with enhanced technology and land management to close the performance gaps which have occurred in comparison to other nations in the international food market.[7]  

Moreover, food distributors in Australia need to strategically promote their products, so that they stand out from cheaper products grown in Chile, Indonesia and Brazil; this is because the high cost of labour and the strong Australian dollar have become major challenges for the country’s agricultural sector.

Competitors in developing countries such as Thailand, Philippines and Malaysia have much lower labour costs and increasing efficiency, allowing them to sell lower quality but cheaper produce. 

While some distributers in Hong Kong will prefer cheaper products that may generate higher profits, Australian exporters can target growing consumer markets with higher incomes in HK and China who will spend up to five times more on high quality dairy, seafood and meat products than people in lower income brackets.[8]

Hence, Australia’s meat and produce sectors need to develop a strategic export vision, innovative investments, and creative marketing to capture opportunities to fill the growing demands for imported food in Hong Kong and other Asian countries.

[1]      Gayle Bryant. “Opportunity Enormous for Australian Agriculture Exports to Asia,” Financial Review.  http://www.afr.com/p/opportunity_enormous_for_australian_KH9HFgWxyaCkVSE0hKgvsL (accessed 16 Jun, 2013).

[2]      Ibid.

[3]      Ibid.

[4]     “AUSVEG Smashes Records with Biggest Ever National Convention in Horticulture,” AUSVEG Weekly Update (accessed 15 Jun. 2013). http://ausveg.com.au/news-1/ausveg-weekly-update-116

[5]      Ibid.

[6]     Port Jackson Partners. “Greener Pastures: The Global Soft Commodity Opportunity for Australia and New Zealand,” ANZ Focus 19 Oct. 2012. (accessed 18 Jun. 2013). http://www.anzbusiness.com/content/dam/anz-superregional/AgricultureInsightsGreenerPastures.pdf

[7]      Ibid.

[8]      Gayle Bryant. “Opportunity Enormous for Australian…”.

The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Hongkong Business. The author was not remunerated for this article.

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Adam Soliman

Adam Soliman

Adam Soliman is an agricultural economist, attorney, and researcher focused on legal and economic issues in the Agriculture, Resource and Food sectors. Adam started his career at an early age in the agribusiness sector then pursued graduate studies in agricultural economics as well as law, focusing on Agriculture and Food Law. His education spans several countries, from Egypt, Canada, U.S., and Hong Kong.

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