Developing capability and capacity for seafood international trade in new and existing markets
The Food and Wine Collaboration project (F&W project) intends to expand trade across agriculture and fisheries sectors into emerging export markets and/or high-growth, high-potential markets. Building existing and developing new markets is a priority for the industry, not only to identify new opportunities beyond China and reduce the reliance on a single market, but also to take a more proactive approach to leverage Australia’s key bilateral relationships and trade partnerships. South Korea, Vietnam and Indonesia have significant growth potential. The new Federal government has identified market diversification as a priority area for R&D.
South Korea is one of Australia’s largest trading partners and we have had favourable trading and bilateral relationships for a long time, made stronger when the Korea Australia Free Trade Agreement (KAFTA) which came into force in 2014. Recent technical market access wins – in particular, for lobster at the end of 2021, continues to make South Korea an active market for seafood exporters.
South Korea is a stable, advanced, and growing economy and while COVID-19 reduced consumption and business activity, food and beverage consumption hit record double digit, year-on-year growth during the pandemic – driven by e-commerce. Koreans are high consumers of seafood and import more than 70 per cent of their food and agriculture products, with demand for high-end, niche premium food including seafood such as (but not limited to) lobster, sea urchin and yellowtail kingfish is increasing.
Vietnam has one of the fastest growing economies and the World Bank predicts a GDP growth of more than 5.5% pa in 2022. Australian exports during the pandemic rose to $9.7 billion – an increase of 61 percent in 2021. Vietnam’s strong growth and expanding middle-class has increased demand for imported goods including premium food and beverage products such as seafood.
Australia and Vietnam have strong trading relationships and have had a long alliance. It has a commitment to global economic integration and a rules based trading process with a growing amount of free trade agreements including ASEAN-Australia-New Zealand Free Trade Area (AANZFTA), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP).
With 100 million people and a growing economy, it is expected to surpass Malaysia, Singapore, and the Philippines over the coming years. Vietnam is a strong relationship-based society and being in country and building personal relationships and trust are key pillars for doing business in Vietnam.
Indonesia is one of the fastest growing economies and with strong bilateral relationships supported through favourable trade agreements such as Indonesia-Australia Comprehensive Economic Partnership Agreement (IACEPA and ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA), this is a strong potential market for the seafood industry.
According to Euromonitor Consulting (2021), Australia has a good reputation for providing premium products, however recognition of Australian seafood brands overall is relatively low and there is a need to increase awareness and exposure of our products. Establishing and building relationships across retail and food service, supported through embassy representation will help expand market presence. Also, as the market sees strong growth of modern grocery outlets, high-end supermarkets, e-commerce platforms and food service outlets; consumer demand and reach is growing including wealthy Chinese expats seeking premium ‘status’ products such as abalone and lobster. This market represents long-term trading opportunities for the industry.
Succeeding in business across any Asian market – including South Korea, Vietnam and Indonesia involves developing strong business relationships, and a clear understanding of the market and the environment. The F&W project provides an opportunity for SIA and industry to develop this understanding and to build capacity and capabilities across these markets. There is also the opportunity to engage with and learn from other agriculture sectors, Australian representatives, and in-country staff to help build capable leaders in the international trade space and develop long-term beneficial trading opportunities for the industry.
Climate resilient wild catch fisheries
The need for this project is to activate and engage industry in viable options towards climate resilience by 2030. This includes the need to demonstrate that immediate options exist and are viable and meaningful, while also gaining support for a clear plan to transform the industry and supply chain with support both internally and beyond the sector. The key needs are:
01 | Industry awareness of the problems and solutions around climate change and resilience is below where it needs to be to activate broad transformation. There is little action towards climate resilience (1 player) in comparison to other agricultural sectors.
02 | There will be increasing competition within the protein market to validate and promote sustainable practices and positive contributions to the environment/climate.
03 | Leaders and innovators in the industry are attempting to act in isolation with few resources to support industry and supply chain coordination and acceleration.
04 | Change around the edges that can be achieved by some stakeholders operating alone will not deliver the transformation at a scale or pace that is required to meet growing and broadly felt consumer expectations that indicate demonstrable action on climate change.
05 | There is a surplus of tools, resources and research around climate change and resilience, but to this point, little of that work has been translated into forms fishers find usable and valuable.
06 | There is a need to identify early adopters and innovators in the space to lead new ways operating into the future.
07 | There is an FRDC funded project to undertake a Lifecycle Assessment being concluded early November. This work has been preliminarily identified fuel, transport, and refrigeration as key challenges requiring new solutions/opportunities for industry.
08 | Propulsion and fuel have been identified as key challenges in wild catch fisheries achieving climate resilience and reducing carbon emissions, and will be the focus of this project.