The Sunday Mail
Trade Focus
Allan Majuru
THE recent State visit by Belarusian President Aleksandr Lukashenko is evidence of the positive trajectory of the Second Republic’s economic diplomacy.
With the Government forging stronger ties with countries across the world, local companies stand to benefit the most, especially as business relations are strengthened and new markets are created.
However, to get maximum value from these relations, local companies need to leverage on areas in which the country enjoys comparative and competitive advantage.
Horticulture is one of those areas, as locally-grown produce is known for its high quality and better taste.
Spices and herbs from Zimbabwe are also known to be of good quality. This has been confirmed over many years by potential buyers.
Local companies that exhibited at the recent Fruit Logistica Fair in Germany — the world’s leading international fair for fruits and vegetables — were told that local produce has potential to perform well across Europe.
Facilitated by ZimTrade — the national trade development and promotion organisation — local companies that participated at the fair engaged with international buyers, distributors, packagers and handling experts.
Companies that are working on their strategic export plans should, therefore, focus on continuously introducing new profitable products and markets to their portfolios.
They must narrow down their market focus to be able to find areas that have not been tapped by competitors.
Diversification helps companies broaden revenue streams and increase profitability.
Firms can diversify by focusing on niche products, which help them establish a loyal customer base, as the offering would suit the needs of a specific customer segment within the broader market.
Niche products are more profitable because a company can price them higher than generic goods, since the market is insensitive to a price change.
Buyers in this market focus more on the value they get from the product offering as opposed to pricing.
Some of the benefits companies can reap from focusing on niche products are less competition, lower marketing costs, higher profit margins and increased brand loyalty.
In Zimbabwe, niche produce such as super foods, natural and wild fruits, essential oils, herbs and spices are creating opportunities for companies to make money in international markets.
Super foods are in demand because of their high nutrients and perceived ability to keep diseases at bay and promote healthy lifestyles.
Some of the superfoods found in Zimbabwe that have huge export potential are baobab fruit; sweet potatoes; whole grains like brown rice and oatmeal; and pecan nuts.
Baobab fruit — which is rich in vitamins and minerals such as potassium, magnesium, iron and zinc — is found in semi-dry areas across Zimbabwe.
Its demand continues to grow, largely driven by the health-conscious market looking for nutritious and high-value products.
It can be marketed as powder, oil, harvested pulp and supplements. The baobab oil, extracted from the seeds, is commonly used in hair and skin products, while the powder is used predominantly in smoothies and porridge.
It has the highest antioxidant ratings.
Baobab fruit has seen its use expanded into gin, beauty products and yoghurt.
It has been widely accepted in most European restaurants, which at times make baobab butter for baobab popcorn or use it to marinate and pan-fry tilapia and prawns.
Zimbabwe can also target the spices market.
Spices such as turmeric, ginger, garlic, peppermint, cinnamon, parsley and chili powder not only improve the taste of food, but also provide a good source of vitamins (B and C), iron, calcium and other antioxidants.
Spices are also being used in medical industries for cosmetics, pharmaceuticals and perfumeries.
In the food industry, they are used to enhance the taste and flavour of food.
Global demand
According to Trade Map, the consumption of spices rose from US$2,5 billion in 2017 to US$3,6 billion in 2021, with the main markets being the United States, Malaysia, Netherlands, Germany, Saudi Arabia, France and the United Kingdom.
Black pepper is the most traded spice in the world, while paprika, chilli powder, cumin, ginger, garlic and cinnamon are also popular. However, it is important to note that different spices are popular in different regions and cultures. For instance, turmeric, cumin, coriander and chili are more popular in India and South Asia, while cinnamon is in demand in Western countries.
Oregon is common in the Mediterranean region, while garlic is popular in Europe and Africa. Consumption of essential oils — which include baobab oils, marula oils and mongongo oils — has increased, with earnings pegged at US$5,8 billion at the end of 2021, according to Trade Map.
The major export destinations include the US, France, Germany, China, Ireland and the UK.
Accessing export markets
As companies choose markets to serve, they are encouraged to consider countries that Zimbabwe has cordial trading relations with for easy acceptance. Zimbabwe has bilateral trading agreements with Malawi, Mozambique, Botswana and Namibia.
In terms of multilateral trading agreements, Zimbabwe is a member of the Southern African Development Community; the Common Market for Eastern and Southern Africa; and the United Kingdom-Eastern and Southern Africa States Economic Partnership Agreement (UK-ESA EPA).
Europe has traditionally been the first and largest market for baobab exports, and companies can trade under the Euro1 initiative.
The UK-ESA EPA allows Zimbabwean products to enter the UK market duty-free and quota-free. To benefit from these trading agreements, companies must register with the Zimbabwe Revenue Authority, and the process is free of charge.
Allan Majuru is the ZimTrade chief executive officer.
