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Export of Potatoes
According to the details, Iran has recently put some quality
restrictions, Sri Lanka came up with import duties and borders with Afghanistan
have been sealed. This loss of overseas markets has left the entire crop with
farmers who have no option but to dispose it off quickly. But the domestic
market cannot absorb such a large quantity; therefore, the producers do not know
how and where to dispose it off.
Presently, the farmers in Punjab have thrown their crop on the road because a gunny bag costs more than what it contains. The Farmers' Associations of Pakistan asked the government to take immediate corrective measures. They said that the government must take up the issue immediately, and come up with a solution, as it is a perishable item. Since there is no processing industry in Pakistan, it has no option but to help export the crop.
AREA & PRODUCTION OF POTATOES
Area Production
(000 ha) (000 Tonnes)
2000-01 101.5 1666.1
2001-02 103.2 1678.5
POTATO- FY02
% Change over last year
Area 1.7
Production 0.7
Yield per ha -0.9
Unfortunately Pakistani farmers depend only on a few traditional markets. They must seek new markets for their products. Here we are giving some basic details about the Hong Kong potato market, which would help them to explore this market. For further details, interested exporters may contact the Export Promotion Help Desk.
Hong Kong potato market
Due to the acute scarcity of cultivable land, potatoes, like most agricultural products, are not grown in commercial quantities in Hong Kong. The consumer demand for potatoes is primarily met through imports from world-wide sources. Hong Kong imports around 34,735 metric tonnes of fresh and frozen potatoes annually at a total cost of $38.972 million.
Import regulations
There are no restrictions on the import of fresh or frozen potatoes - except for potatoes covered with contaminated soil. Normally, the imported potatoes are either washed or cleaned manually or mechanically with brush to wipe off soil prior to shipment.
Import tariff
There is no import tariff as Hong Kong is a free port. Consignments are cleared within a few hours of their arrival at the Hong Kong seaport.
Market size
A total of 2,206.356 MT of fresh and 14,409.243 MT of frozen potatoes were imported into Hong Kong during January to July 2003.
Major suppliers
The major suppliers of potatoes to Hong Kong are USA, China, Australia, Denmark, Netherlands, Canada, France, Indonesia, Japan, Malaysia and Singapore. The individual shares of all these countries in the markets are indicated in the tables I and II.
Import cycles
The monthly import of potatoes throughout the year remains stable without any cyclical or seasonal charges.
Distribution channels
The two major importers and retailers are superstore chains namely Park 'n' Shop and Wellcome. Their collective monthly imports are around 800 MT. They account for almost half the total import of potatoes to Hong Kong. The remaining quantities are imported through other importers; list of importers can be obtained from EPB.
Products differentiation and price
Hong Kong imports different varieties of potatoes suitable for baking, boiling, French fries, casserole stew and gourmet. United Kingdom and Japan export special varieties of gourmet potatoes. These potatoes are white in colour and miniature in size and sell in the market at an average price of $2.0 per kg.
Packing
Potatoes imported from sources other than China are transported in 40-foot reefer containers. Each container carries between 20-24 MT of potatoes. Normally they are packed in reinforced two-ply cardboard cartons. The net weight of the carton is usually between 20-23 kg comprising 80-90 pieces (tubers). From the US, each tuber (potato) weighs 205-300 grams and is sorted/graded according to weight. The potatoes from China are exported in cane baskets.
Certification
A phytosanitary certificate is normally required by the Hong Kong customs for clearance. The importer conducts a quality check at their warehouse.
Payment terms
The import of potatoes is usually executed on consignment basis. Payment is made within 30 days of the date of arrival of the goods. Since the two major supermarket chain stores importing the commodity are reputable and well established, the risk of non-payment is minimal. However, if the quality of the shipment is not up to the standard the importers reserve the right to either ask for a discount or to reject the consignment outright.
Shipment
The potatoes originating from the United States are shipped out of Washington State on the West Coast with a voyage time of 2Y2 to 3 weeks. The variety usually imported from USA is called Russit Burbank. Cost of shipment is very competitive due to frequent sailing of container vessels from this port of USA.
Strategy for export to Hong Kong
Hong Kong is a highly developed and quality conscious market. The purchasing power is amongst the highest in the world and the consumers can logically afford to pay premium prices for quality potatoes. The importers can assess the suitability of the potatoes after testing the quality and physical characteristics of the produce. These factors in turn determine the prices.
Packing and grading requirements are stringent and inflexible. Initially, it is suggested that the two supermarket chain stores should be targeted for sales. However, to be successful in penetrating this market, it is imperative that the quality of the potatoes that we export should be comparable to the best in the world at prices somewhat lower than the ones already being imported.
TABLE-I: HONG KONG GLOBAL IMPORT OF POTATOES - FRESH
Quantity in kg -- Vale in US$ '000'
S. No. Country Jan-Dec 2002 Share Jan-Dec 2003 Share
Quality (kg) Value % Quality (kg) Value %
1 Australia 369,936 1,663 10.83 222,734 989 14.53
2 Belgium 21,502 49 0.32 126,237 259 3.80
3 Canada 312,119 424 2.76 162,708 238 3.50
4 China 258,736 755 4.92 5,024 12 0.18
5 Denmark 9,770 32 0.21 149,980 443 6.51
6 Germany 180 1 0.01 5,450 29 0.43
7 Spain 2,190 7 0.05 23,516 15 0.22
8 France 15 -- -- -- -- --
9 UK 143,265 608 3.96 57,530 371 5.45
10 Indonesia 26,718 48 0.31 -- -- --
11 Japan 119,686 499 3.25 40,531 200 2.94
12 Korea 13,639 65 0.42 12,867 56 0.82
13 Macau 12,719 39 0.25 5,938 22 0.32
14 Malaysia 676,896 2,238 14.58 358,681 1,222 17.95
15 Netherlands 284,163 838 5.46 14,774 80 1.18
16 Philippines 8,278 9 0.06 3,166 6 0.09
17 Switzerland 18,618 27 0.18 -- -- --
18 Saudi Arabia 11,384 26 0.17 -- -- --
19 Sweden 5 -- -- -- -- --
20 Singapore 607,866 2,186 14.24 353,823 1,236 18.16
21 Thailand 84,261 265 1.73 42,036 114 1.67
22 Taiwan 79,082 198 1.29 56,633 111 1.63
23 USA 2,225,200 5,357 34.89 563,523 1,398 20.54
24 Vietnam 2,915 18 0.12 1,205 6 0.09
Total 5,289,143 15352 -- 2,206,356 6,807 --
TABLE-II: HONG KONG GLOBAL IMPORTS OF POTATOES - FROZEN
Quantity in kg -- Vale in US$ 'ODD'
S. No. Country Jan-Dec 2002 Share Jan-Dec 2003 Share
Quality (kg) Value % Quality (kg) Value %
1 Australia 142,758 211 0.89 29,478 43 0.35
2 Canada 712,375 552 2.34 348328 236 1.93
3 China 130,265 141 0.60 20,900 15 0.12
4 Germany 13,603 17 0.07 810 1 0.01
5 UK 559 2 0.01 -- -- --
6 Japan 84,451 324 1.37 75,441 310 2.54
7 Netherlands 213,558 187 0.79 571,379 346 2.83
8 New Zealand 857,884 570 2.41 -- -- --
9 Switzerland 8,485 15 0.06 3,035 8 0.07
10 United States 27,282,020 21,601 91.45 13,359,872 11,256 92.15
Total 29,445,958 23620 -- 14409,243 12,215 --
Source: EPB