Farmers taking advantage of hungry South Korea market
THE ability for growers to export their produce to Asia might be hampered by current conditions but the potential is there to tap into a lucrative market when the water is flowing.
Lockyer Valley farmers recently returned from a trade mission to South Korea alongside other Queensland vegetable growers and industry representatives, having made inroads on an initial visit two years ago.
Market access for broccoli was obtained by Lockyer Valley Growers in July 2017 and the first trial shipment of broccoli was sent to Seoul a month later.
Since then, the group has secured market access for a large variety of vegetables including lettuce, spinach, kale, cauliflower, cabbages, radicchio and other leafy greens.
Local farmers have already been sending produce to Japan and Singapore for close to a decade but gaining access to South Korea was a more difficult exercise. The initial trip was a chance for growers to make inroads with potential buyers and importers, with a couple of major operations making fruitful connections to begin exporting produce there over the past 12 months.
Lockyer Valley Growers president Michael Sippel said the second trip was about tracking how well things had gone, cementing relationships and being able to see first-hand how produce was being received.
South Korea is an enticing prospect; the country of 50 million people imports more than 70 per cent of its food and agricultural products and they are hungry for our fruit and veggies.
If water security in the region is clinched, it provides another avenue if domestic markets are oversupplied.
"We went in the middle of our winter, so in their summer and that's when the demand is," he said.
"During the summer they buy a lot of stuff out of the US and China and that's also summer production. So for us we can grow very good quality produce in the middle of winter. We had a full day at the Australian embassy and had hourly appointments with importers and supermarkets and food service people.
"It diversifies and spreads (growers') risk. It enables growers to service more markets. If we're only supplying Coles and Woolworths and domestically it doesn't take long for big growers to over-service the market. (Asian countries) are paying pretty reasonable money for our stuff and they're wanting to commit 12 months out. These growers can lock in some good prices."
Mr Sippel said work still needs to be done to gain market access for more products, such as processed carrots, and improving the understanding of government employees on the ground as to how they can better help.
"I don't think growers are going to seriously be able to handle Korea without a big rain event and we get more water," he said.
"Growers are struggling to tackle domestic markets at this point in time. We need assistance from the government to help better skill growers into how to export. You need one or two packing facilities set up here in the region that can consolidate loads. You won't get buyers in Korea interested in handling a pallet here and there, they want container loads."
The latest trade mission was a chance for Glenore Grove grower Darren Howard to explore his options, with the kale and radicchio he grows on his 130-acre family farm in hot demand.
He supplies markets around Australia and believes the chance to send his vegetables directly to South Korea would be a good opportunity.
"The tariffs they've got on vegetables are dropping every year, going forward it's probably going to be more worthwhile," he said.
"But of course it comes down to the profitability of it all," he said.
"I do think outlets like this will be needed to move more produce (in the future). We'll employ more people in the area as well.
"My window is nearly over for the year so it gives me a few months to make some plans of what I could actually do from April to November next year. I can work with (large growers) to supply those smaller lines and do a seasonal window. That's what I would be looking at."
Asian demand for our fruit, vegies is on the rise
The "excitement" for Aussie produce was evident as our farmers toured South Korean supermarkets on a recent trade mission.
It's a country on the rise and as its standard of living continues to increase, a desire for top of the line fresh produce does as well.
"They want good quality food and particularly what I noticed when you go into the high-end supermarkets, it's the 35 and younger (customers)... they want to buy that really high quality food," Lockyer Valley Growers president Michael Sippel said.
"They're not buying from the streets and not looking to buy the Chinese stuff. They're using their phones, they're scanning barcodes wanting to know who the grower is and where it came from. (Australian produce) has a very good image.
"The demand is only going to increase. Our challenge is we have the land, we just don't have an abundance of water to grow extra for Korea. That's the trade off at the moment.
"Growers here, particularly in southern Queensland, are conscious about supplying Coles and Woolworths and feeding our own people but it comes to a point where... Coles and Woolies are competing against these export markets now."
The Korea-Australia Free Trade Agreement started in December 2014 and reduces trade and investment barriers to help level the playing field for Australian exporters competing with those from the USA, Europe, Chile and ASEAN countries.