No Room For Complacency In Eastern Markets

Press, Volume CX, Issue 32321, 12 June 1970, Page 7

No Room For Complacency In Eastern Markets

A warning that New Zealand could not be complacent about developing markets in the East, particularly for dairy produce, when food production was being greatly increased in South-East Asia, was issued this week by Mr J. R. Maddren, of Christchurch, who was the leader of the New Zealand trade mission to Japan, Hawaii and Hong Kong, which returned home last week-end.

Mr Maddren, who was discussing prospects in the area for primary products, said that much was heard of the population explosion and the demand for foodstuffs that would take place with the upsurge in living standards, and all this was very true, but it had to be placed against the background of scientific developments which were undoubtedly helping tn raise the production of Asian farmlands.

Rice was an example of what was happening. Only a few years ago this commodity was in undersupply, but now due to the develop-

ment of “miracle rice” production had risen to such an extent that in Japan, in particular, supplies far exceeded the consumption of the market He understood that there was about three years’ supply in store and deterioration was setting in.

Mr Maddren said he had heard that the Japanese were experimenting with placing the rice in plastic bags and storing it on the floor of lakes to provide cheaper storage, and so far he believed that this had been successful.

Mainland China also seemed to be becoming selfsufficient in wheat for the first time, so it appeared that surplus wheat from Canada and Australia would be more difficult to sell. During the summer there was also an adequate supply of fresh fruit and vegetables in Japan. This gave some indication of the productive capacity of Japan. The population was concentrated about the main cities so that there were still considerable areas of farmland available for production, although it had to be admitted that pollution of waterways and air pollution did pose serious problems, particularly in industrial areas.

The rice surplus had posed problems for the Japanese Government and they were rather like the Americans in that they were now paying so much per acre to farmers for redeployment of their land and the planting of other alternative crops. Fanners were being encouraged to develop the dairly industry but costs on small Japanese dairy farms running only a few cows were very high indeed and on the basis of some figures that had been Shown to his mission there was a clear indication that because of the high retail prices ruling in Japan consumption of dairy products was tending to decline. The trade mission was very conscious that this-was a New Zealand trade mission, said Mr Maddren, and that all types of products from this country had to be promoted to the maximum degree. “We therefore took maximum advantage of the coverage given us by the news media to sell New Zealand as a major source of lowcost dairy products—low cost because of our favourable climate and very effi-

cient production and pointed to the advantages of dealing with New Zealand as a long-term supplier of these products. “We also stressed the advantages of the price equalisation scheme that had been submitted to the Japanese authorities by the "Dairy Board—an excellent formula has been devised by the board that will not only protect the Japanese farmers and give much more

attractive prices to the consumer, but would also provide a very favourable market for New Zealand dairy exports.

“It was clear by the time we left Japan that our message had registered amongst the business community and the consumers. “I believe that there is urgency to develop the market in Japan for New Zealand's dairy products—-

urgency because the consumer is anxious to purchase and the Japanese Government is clearly conscious of this. They are already in the process of removing quota restrictions over quite a wide range of imports.

“Margarine sells in Japan and could be a threat to our dairy products unless we are able’ to pentrate the market in greater depth in the reasonably near future. “1 would be happier if I could see the possibility of a major break-through in this market in the very near future.” The demand for meat as a protein food was rising steadily in Japan, said Mr Maddren. One reliable estimate placed the growth rate at, about 15 per cent per year, which when compounded amounted to a very substantial figure. New Zealand mutton was still in strong demand but price was of course always a factor as far as the Japanese market was concerned.

Undoubtedly the demand for lamb would increase and be believed that the Japanese would ultimately pay the premium required for this product. The Meat Board bad made an outstanding contribution to the industry through its promotion work in Japan and its activities in conjunction with Expo 70 were of the highest order. The New Zealand restaurant and the laraburger bar in the New Zealand pavilion were creating a tremendous amount of interest and were unquestionably most useful promotional aids in the development of the meat market in Japan. Labour was becoming scarcer in Japan and as time went on It was reasonable to expect that labour now in the agricultural industry would move towards .other types of industry and this would give better opportunities still for New Zealand exporters, because of rising living standards and the greater purchasing power that these generated. New Zealand should, wherever possible, process agricultural products, including meat, at least to some degree for the Japan-

ese market. It was, however, necessary to have the tastes of the consumer very clearly identified before any processing was instituted. Artificial meat production in Japan had run into some problems, Mr Maddren said, and was not making the progress that, had seemed likely a short time ago, but these difficulties would probably be overcome. The problem, he understood, was related to some of the additives used. He had been asked why New Zealand did not produce beef like Japan’s premium price high quality Kobe beef. While beef imports were under quotas, Mr Maddren said that this might be worth looking at as no doubt if the animals were given the appropriate diet it would be possible to go quite a long way to producing this type of beef. It was interesting to note the increasing interest being taken in New Zealand carpets in Japan. Here again if it was possible to process a percentage of New Zealand wool and sell in the form of tops or better still in carpet the return per lb would be multiplied dramatically.

The reception rooms ■and the section of the foyer in the Imperial Hotel in Tokyo that had been carpeted in' New Zealand wool carpet l looked absolutely superb. and represented a real | break-through as far as New ; Zealand manufacturers were' concerned. This carpeting had created wide interest and should prove to be the forerunner of a greatly expanded business for New Zealand. The mat that had been the traditional floor covering in Japanese homes was becoming more costly to produce and production was being limited by a shortage of labour and this was creating a much greater awareness of carpet as an alternative floor covering. Mr Maddren said that be believed that there was a livelier interest in New Zealand wools in Japan, but at present restriction on textile imports into the United States were causing concern in Japan.

Stock foods were in very great demand in Asia and particularly in Japan. There was much Inquiry for New Zealand lucerne meal pellets. As American production costs were rising Japan was turning to an ever greater degree towards New Zealand as a supplier of stock foods. Although in summer there was a big production of fruit and vegetables, in the winter canned and frozen vegetables were being used on an increasing scale and with the expansion of supermarkets into the suburbs, where the housewife had more ready access to frozen vegetables, this trade must certainly expand. In general Mr Maddren said that a very big market existed in Japan for all types of foodstuffs and this demand would continue to develop. This was a market that had to be supplied with precisely what it wanted in terms of packaging, size of pack and preparation of the product, and once the market had been secured it could not be neglected and all contracts had to be de-

livered precisely in terms of the arrangements.

Of Hawaii, Mr Maddren said that this state already took more from New Zealand than the combined imports of India and Hong Kong and there was extensive scope for further expansion of this trade. With rapidly increasing tourist traffic through Hawaii, he said that it would become increasingly the apex for triangular package tours in the Pacific. Here also processed foods could be sold 1 in greater volume.

In talks with Governor 1 Burns, in which the Americans had raised the question of supplies of New Zealand meat and the New Zealand mission the quotas on imports, it had been suggested to the mission that New Zealand might pay more attention to distributing its meat more evenly through the United States rather than there being a concentration of the product near ports of entry, in that this could react to this country’s advantage in that the volume of; imported products would not be so pronounced in some areas.