"Five years ago we sold 70% of our trade to Europe. Now it is only 40%," said Dr. Ludwig Theuvsen, a Danish researcher who talks about the importance of Western Europe in the worldwide fresh produce sector in his research. Last Friday Dr. Ludwig talked more about this topic at the Deutscher Obst und Gemüse Kongress (German Fruit and Vegetable Conference).
From Theuvsen's research it is clear why Europe is less interesting for exporters. The population is not growing and neither is consumption per capita. In fact, consumption in Germany and the Netherlands has fallen in recent years. But in emerging markets like China and India the opposite is true. Demand for fresh fruits and vegetables is increasing due to urbanization, growing populations and a growing middle class. These markets are much more interesting for exporters in terms of investment, "With the greatest potential for revenue," says an exporter to Theuvsen. The price uncertainty in Europe also plays into this as well, "You never know what kind of price you are going to get. That is a problem," says a South African exporter. According to Theuvsen, market potential is not the only place where Europe is lagging behind. The price uncertainty also plays a role, as well as the strict phytosanitary requirements. In addition, in Germany there are not only national requirements, but also additional requirements from each customer.
According to those interviewed, interest in Europe has not only fallen over the last five years, but will also continue to fall in the next five years, at least that is what they expect to happen.
Local markets
In the search for alternative markets Asia is not the only emerging player. From Theuvsen's research it appears that intercontinental sales are also rising. For example, Chilean exporters are exporting more and more to other Latin American countries, and African traders are supplying to other African countries. All at the expense of European exports, "Five years ago we sold 70% of our trade to Europe. Now it is only 40%," says a trader. Trade flows have changed enormously in recent years.
But the grass isn't always greener. There are problems when building a network in new markets, just as there are cultural differences. And what about logistics and infrastructure, or transition problems - there's also payment difficulties and price fluctuations. Although it is sometimes thought that Europe has strict requirements, entrepreneurs tell Theuvsen that that happens everywhere, "In China, the calibration must be perfect and the product has to look perfect as well. If that is not the case, then this market is very difficult." On the other hand, in Europe you always sell everything, at least that is what a Costa Rican exporter says.
Turning the tables