The Sunday Mail
Trade Focus
Allan Majuru
AS the world readjusts, with some countries learning to live with Covid-19 and others without it, businesses are moving into full swing.
Some borders are opening to foreign travel and certain activities that promote consumption such as tourism, are starting to gain traction.
Over the past two weeks, restaurants in many countries in Europe and Asia have started to open, with improved reservations and increased demand for takeaways.
These developments in the food industry will likely result in increased exports, particularly the type and quality that cannot be sourced internally.
This is the time for local companies to implement post Covid-19 strategies so that they can tap into the growing demand.
To easily navigate the terrain that is seemingly new due to changing consumption patterns, it is important for businesses to understand current trade trends within targeted markets.
Currently, the low hanging fruits for local businesses are concentrated in horticultural produce.
This is because more people are concentrating on placing their earnings on healthy eating habits.
Undoubtedly, this places Zimbabwe in a strategic position because the country already enjoys competitive and comparative advantages.
Agriculture is the mainstay of the economy. Zimbabwe enjoys good climatic conditions favourable for production of a variety of produce currently in demand as well as good supply windows to Europe and the Middle East.
If local companies take charge of the opportunities that lie within this sector and target the right markets, there is potential to grow their export volumes.
There is growing demand for fresh, organic produce as it is considered a “superfood” because of assumed health benefits.
According to Produce Marketing Association, during the last week of May, elevated everyday demand in Europe drove double digit produce gains for fresh, frozen and shelf stable fruits and vegetables.
“Fresh produce year-over-year growth for the week of May 31 versus the comparable week in 2019 increased 13,2 percent.
Frozen fruit and vegetables increased the most, up 28,8 percent despite continued high out-of-stocks and severely limited assortment availability for both frozen vegetables and fruit.”
As food prices continue to increase across the world, food growers struggle to meet demand. Certain fruits and vegetables have become more expensive since the start of the global lockdown.
According to Fresh Plaza, a European fresh produce magazine, bananas in France jumped by 12 percent when comparing prices of goods sold between March 2-7 2020 and those on sale from April 6-11 2020.
Likewise, apples jumped by 9 percent between the two periods and the cost of vegetables spiked by almost 30 percent. Prices for cauliflower and broccoli also went up.
The reasons for price increases are numerous including fears about transmission of coronavirus resulting in “healthier shopping”.
This growth in demand and price increases present a gap that local producers can address if they target the right market with the right approach.
The European Union (EU) and the United Arab Emirates (UAE) are some of the world’s biggest importers of fresh horticultural and floricultural products. Therefore, these markets are ideal for Zimbabwe’s exports.
European Union
Produce is already being exported through the Netherlands and current uptake is indicative of a growing demand.
The EU is already the principal buyer of agricultural products from Zimbabwe.
Trade between the two has been made easy by the interim Economic Partnership Agreement (EPA) which allows for Zimbabwean qualifying products to enter European markets duty-free and quota-free if they meet the required standards and certification.
While there is existing trade between Zimbabwe and the EU, there is still potential to grow exports into that market by targeting supply of products in demand.
These include avocados, sweet potatoes and citrus fruits.
Sweet potatoes: Over the past five years, consumption of sweet potatoes has doubled in Europe and demand is still rising. This has been influenced by the growing interest in organic, exotic and ethnic food.
With the growing emphasis on healthy lifestyles, the sweet potato has become among the most sought-after superfood produce because it is high in vitamins and has the capacity to improve blood sugar regulation as well as being a source of iron, magnesium and potassium.
There is growing interest in organically produced sweet potatoes. But the volume and export quality are relatively volatile due to difficulties related to their production.
Zimbabwe has an opportunity to develop its exports of sweet potatoes in the EU market due to its rich soils and favourable climatic conditions.
Local producers of sweet potatoes can fully utilise the duty-free quota to access the EU market for all qualifying products.
However, it is important to note that Zimbabwean sweet potato producers should meet EU import requirements and standards if they are to penetrate the market.
The requirements include food and health, as well as packaging and labelling standards.
Avocado: This has become one of the top superfoods in recent years. It is one of the top imported fruits around the world. There are two main varieties of avocado produced and consumed across the world, which are Hass avocado and green-skinned avocado such as Fuerte, Bacon, Gwen, MacArthur, Pinkerton, Reed and Zutano avocado.
Around 80 percent of avocado produced and consumed worldwide are Hass, which also happens to be the main variety grown for export in Zimbabwe.
With regards to capacity to increase supply, indications are that Zimbabwean avocado exports will grow in the coming years.
Demand for Zimbabwe-grown avocado is expected to continue to surge as current demand is bigger than supply.
Currently, major global exporters of avocado, such as Mexico, have witnessed a rise in exports and are still failing to meet demand.
According to Explica, although “the quantity of product shipped from Mexico to other countries was lower, demand increased, as people made purchases for the new coronavirus, which caused the price to rise”.
Consultative Group of Agricultural Markets (GCMA) indicate that during the first four months of the year, the public price of avocado has risen around 18 percent, which has increased the income of producers by 22 percent.
Citrus: Fruits, particularly lemons, have been widely touted as immune-boosting for those who are looking at home remedies to deal with Covid-19.
This is because citrus fruits are a major source of Vitamin C, which helps in the fight against colds. For local producers to export to the EU markets, buyers require fruits to be uniformly sized with no physical bruises on the skin of the fruits.
Fruits also need to be uniformly yellow in colour, fine, crisp and free from dehydration. Netherlands’ import bill of citrus fruits was US$1,21 billion in 2019 and can be a gateway for local producers into the EU market.
Middle East
The UAE has also grown to be one of the biggest re-exporters of food in the world, being the intermediary market for other Gulf nations like Qatar, Saudi Arabia and beyond.
Markets like Dubai can, therefore, be used as entry points into the entire Middle East region.
The growing affluence in UAE has translated into increased buying power and the trends are pointing towards Eurocentric eating habits like ready-to-eat, convenient and healthy meals.
Local companies can also take advantage of the window of demand for fresh produce all year round throughout the region as there is limited production due to the arid climatic conditions.
Zimbabwe has the potential to supply this market with fruits and vegetables such as avocado, potatoes, butternut and chillies, among many others.
Allan Majuru is the ZimTrade chief executive officer.
