Department of State Development

Insights to the current situation with COVID-19 in specific markets from our overseas office networks.

 

 

China

  • China’s yuan gains foothold in iron ore deals: Australia’s Rio Tinto, BHP Group and Fortescue Metals, as well as Brazil’s Vale, recorded their first yuan-denominated transactions in China in the last year. More yuan-prices transactions will increase the internationalisation of the Chinese currency and also help the economy in line with the new ‘dual circulation’ strategy.
  • State firms set to see growth in exports: After months of losses caused by factors such as COVID-19 and declining global demand, Chinese state-owned manufacturers have managed decent export business volume since the second quarter. SAIC Motor Corp, the largest vehicle producer and exporter in China, exported 2,500 MG and Maxus-branded vehicles to Australia, New Zealand and Fiji as demand in Oceania grows for Chinese vehicles.

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Hong Kong

 

Opportunities for South Australian exporters

Food and beverage:

  • Retail frozen packs (branded or private labelling)
  • Ready to eat meals; beef, chicken, mutton, seafood, fish, abalone, small goods, sausages (organic, no hormones or antibodies, natural)
    • Plant based/vegetable proteins
    • Healthy and functional foods and snacks
    • Dairy – fresh and UHT milk
    • Non-alcoholic  beverages
    • Handwash

Health and Medical:

  • PPE – face and eye shields, hand gloves (latex and nitrile), isolation gown for healthcare sectors, workforce and consumer
  • Health supplements – immunity booster
  • Gerontechnology:
    • New norm – golden age/elderly staying at home even more and doing e-banking, e-shopping and home exercise
    • Help for elderly individuals to retain self-management skills – AI and robotics, chat bot/video conferencing/auto routing/health index monitoring
    • Assistive technology/devices (e.g. prevent falls)
    • Telehealth, inclusive designs
    • Digital application platforms with two interfaces – one designed for golden age/elderly groups
    • Evidence based testbeds for new product development.

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India

The Indian breakfast market gets ‘mueslier’ with Carman’s launch 

  • Australia’s iconic muesli brand, Carman’s, has expanded their presence to online platforms such as Amazon and Flipkart in India. The brand was launched earlier in 2020 during the Australia-India Business Exchange exclusively at Foodhall, a premium gourmet retailer in India. This outcome is on the back of the buyer mission hosted by Austrade alongside states during the Global Table & Fine Food show last year. The breakfast cereal market in India is estimated at $320 million, growing at a CAGR of 18% every year. 

Food and agribusiness supply chain appears to have restored in Bangladesh

  • As per conversations with industry, most food importers have shared that the supply chain of agricultural and other daily products has largely recovered from the initial disruption caused during the lockdown in Bangladesh. However, there seems to be a shortage of imported products including chips, chocolate, butter and personal care products in the market. This is due to  the delays in releasing imported products from ships due to a lack of labourers and other support staff. Meanwhile, the largest port in Bangladesh has resumed normal handling of containers and the supply chain of premium imported products is expected to recover soon. Australia has recently exported containers of pulses and fruits to Bangladesh. Austrade is monitoring these shipments, which are being cleared as per the scheduled time.
     

Austrade scoping out canola and sunflower seed export opportunities to Sri Lanka

  • The Sri Lankan Government has unveiled ambitious plans to replace 20,000 hectares of land earmarked for palm oil plantation in the country. This is on the back of increased environmental concerns opposing the expansion of palm oil plantation. The government is contemplating the planting of other edible oil such as canola or sunflower in this earmarked area. Sri Lanka imported over 150,732 metric tonnes of edible oil last year, while the current government is keen to reduce import dependence in the country. Austrade is scoping out export opportunities for canola and sunflower seeds with the planters’ association of Sri Lanka.

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Japan

Market Conditions:

  • Japan has entered the “With Corona” era, meaning that people are leveraging positive outcomes despite corona barriers to tell the story of their product or service. People are getting on with the job, deals that may ordinarily be nixed due to Covid-19 are being re-thought or adjusted to go with the present conditions.
  • Hotels, restaurants and shopping areas reopening, albeit with strict social distancing guidelines. Some wine importers have started small wine events with ambassadors in market rather than the winemakers, and consumers seem to be very receptive.
  • Further, the has been the opening of several luxury hotels, and high-end shopping and eating establishments, that were due to open in time for the Olympics but were initially delayed. This is all good news because these are the kind of venues that use South Australia’s premium food and beverage products.

Trade Opportunities:

  • For Japan’s Sustainable Development Goals, South Australian businesses have the upper hand; we have very strict regulations and definitions of specific terms, we take sustainability very seriously, and traceability and transparency are very important and so is the use of renewable energy. 
  • Japanese consumers are now looking for what they can get out of their food and beverages. Japan not only has an ageing population that requires functional food products but a market that has changing needs. This can be seen on everyday supermarket shelves with the introduction of plant-based milk drinks, non-meat protein products and drinks with specific health benefits.    
  • South Australia’s Covid-19 response has not gone unnoticed and this includes the assistance towards international students too. There are numerous young Japanese students who are keener than ever to go and study in such a welcoming environment once they can.
  • Australia’s relationship with Japan has never been stronger, and this was reiterated in the two Prime Ministers’ summit last month. We are safe and the preferable trading and investment partner of Japan, so this is our opportunity to leverage across all sectors.

Space:

  • Hayabusa’s status and its return to earth are being broadcast on the news and its planned landing in the desert of South Australia.
  • It is not only households watching the news who are becoming familiar with our state but school children all over Japan are learning about Hayabusa2 and its landing in South Australia, where we are, the location of the Australian Space Agency, and how important our role is in Japan’s space research. This will plant the seed in these children to grow a thirst and desire to know more about SA, come and study here and discover more about space-related education in SA, from high school programs to post graduate studies at one of our universities.

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Malaysia

Technology/Digital Economy:

  • Malaysia will establish a Digital Economy Task Force at government and industry level, responsible for executing 15 high impact programs to accelerate the digital agenda. Key areas of focus include talent development, the gig economy, e-learning, adoption of cashless payments, e-commerce, digitalisation of SMEs, promoting startups and innovation, cyber security and data sharing.

Food and Beverage:

  • A major Malaysian fresh produce importer cited an uptick in demand for apples, oranges and citrus produce since the implementation of Malaysia’s lockdown.

Economic indicators: 

  • Malaysia unemployment rate drops as sectors reopen during RMCO Malaysia's June 2020 unemployment rate declined month-on-month to 4.9 per cent from a record-high of 5.3 per cent in May 2020 as more sectors, including the services industry, reopened due to the implementation of the nation's recovery movement control order (RMCO) to revive the country's economy while curbing the Covid-19 pandemic. In a statement, Statistics Department chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the number of unemployed persons declined by 52,900 individuals, or 6.4 per cent, to 773,200 people in June 2020.
  • Malaysia on track for economic recovery in 2021, says Zafrul Malaysia’s economy is on the right track for recovery in 2021, said Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz. Judging by the recent pick-up in economic performance, the minister said he was optimistic that the country’s economy would rebound next year. "We are watching this closely, but I’m very optimistic after seeing the facts and figures that were presented before us, especially for June and July," he told reporters

Trade & Investment:

  • RCEP: Signing expected to proceed in November, says Azmin The Regional Comprehensive Economic Partnership (RCEP) participating countries (RPCs), including Malaysia, are expected to proceed with the signing of the agreement in November, according to International Trade and Industry Minister Datuk Seri Mohamed Azmin Ali. He pointed out that the trade and industry ministers of RPCs had agreed to do this at the virtual 10th RCEP Inter-sessional Ministerial Meeting on June 23.

Travel/Borders:

  • Applications for cross-border travel between Malaysia and Singapore will be open on Monday 17 August 2020. Immigration Department (JIM) director-general Datuk Khairul Dzaimee Daud in a statement today said foreigners living in Singapore who wish to enter Malaysia for a short period of time for official purposes and business dealings could do so through the Reciprocal Green Lane (RGL) facility.

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MENA

  • A global fall in oil prices was indirectly caused by COVID-19 after a drop in demand from China led to Saudi Arabia cutting export prices in March 2020. The fall in oil prices caused a contraction in economies across the oil trade-dependent GCC (Saudi Arabia, Oman, Kuwait, Qatar and UAE) with the IMF predicting a loss of more than $230 billion in lost annual revenue. Likewise, the paralysis in the tourism industry as a result of border closures and travel restrictions across MENA to contain COVID-19  are having a negative impact on economies of the region; in UAE, Emirates Airlines alone is set to cut 9,000 jobs and has already done the same in South Australia.
  • Economies across the region will contract roughly 3.3%, as per prediction of the IMF. While the GCC economies are predicted to bounce back in late 2021, outside of this sub-region the pain will be longer-lasting. Outside of the GCC, governments do not have the funds to invest in fiscal stimulus packages and thus will be forced to turn to international aid packages increasing foreign debt or tap into already depleted foreign reserves.
  • Grocery food and beverage items, online education and curriculum development, healthcare services and technology, cyber security and e-commerce remain some of the key opportunities for South Australia in the market.

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UAE

Food, Agribusiness & Wine

  • Suppliers of organic produce, free from & healthy food products in the UAE have seen delivery sales spike as much as 300 to 400 percent as residents become increasingly health conscious amid the Covid19 pandemic. 
  • Sizable disposable income, a more health conscious consumer, and local government initiatives for a fitter lifestyle are increasing the demand of such products.
  • Traditional brick & mortar grocery retailers are looking to expand their online presence.
  • Dubai Duty Free which does retailing at Dubai International Airport, has now started online sales and home delivery within UAE for different category of products.
  • There has been a huge drop in sales of alcohol/wines due to the temporary shutdown of hotels and their high end restaurants/bars in the first & second quarter of 2020.

Health & Medical

  • Enhanced focus on innovative medical devices and technology with UAE based healthcare stakeholders looking for hi-tech – AI & ML driven healthcare technology from around the World.
  • There are opportunities within Healthcare services like training & development of medical staff.

Defence & Space

  • With the geopolitical situation in the region, and as per the recent attacks on some of the oil & gas assets both on-shore and offshore, the regional economies like Saudi Arabia & UAE have a big focus on investing into drones, underwater defense systems, and advanced military accessory products. Training of military officials is also a service needed across the region.
  • Space life sciences, Robotics, Automation & AI based technologies are required by the UAE for its space sector.

International Education

  • The UAE has shown enhanced flexibility in providing recognition to online education & certification programs, especially after the outbreak of Covid19, which in turn is also making investors look at education and immersive technology opportunities in UAE and internationally. Prior to this, there was more focus on transnational education, and opening up of foreign university campuses in UAE.
  • Opportunities exist in online education curriculum development for school & university students as well as for professionals.

E-commerce opportunities for the region

  • Ecommerce is a growing opportunity in UAE both for food & beverage as well as other FMCG product categories.
  • Internet penetration is above 95% in the UAE, and majority of them are using social media platforms like Facebook & Instagram, and Whatsapp business is also picking up.
  • Fashion & apparel is another segment where UAE is big on online ecommerce, with a lot more consumers opting to shop online in the current Covid19 scenario; a trend expected to continue even after Covid19.

Investment Focus

  • Investors from UAE are looking to build resilience against future crises & more open to look at investments into areas such as clean water & sanitation, good health & well-being, and other sustainable, green or impact investment opportunities both domestically and internationally. The Covid19 crisis has highlighted a sizable vulnerability in the strategic assessment and planning for investors & corporates not only of the healthcare systems, but also of the global supply chain across different sectors.

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USA

  • In the US market, consumers are making larger grocery purchased, spending up to 16% more on groceries, but they are making fewer trips to the stores.  The top and bottom ranking of food categories shows the change in focus of consumers from the beginning of the pandemic to now. 
  • Initially, consumers were focused on comfort and convenience items.  However, in the last few weeks, the top growth categories indicate the consumers are starting to experiment with cooking foods and consuming fresh foods.
  • This is the time for unique, fresh-ingredients, and high-quality food products. 
  • The USA market is seeking unique and innovate solutions and products and it is important for South Australian companies to have unique selling points to capitalise on business opportunities, either in innovation, quality, or the story behind the product. 
  • South Australian companies offer capabilities that provide unique solutions across all US business ecosystems. The Department for Trade and Investment’s office in Houston can support companies by facilitating opportunities across key priority sectors around the country. Currently, there are opportunities within the creative/technology hub in Austin or San Francisco; in the medical centres of Houston and Boston; and in the defence and space sectors. 
  • As one example of opportunities in the US, DTI Americas, is working with food and wine distributors to showcase an array of South Australian wineries and food products. One distributor is particularly interested in products new to the US. These companies are interested in long-term relationships to bring South Australian food products and wines to the US.  
  • Despite the current economic impact of the coronavirus, there are opportunities for South Australian companies in the US market. The challenge is having the patience and the persistence to access these opportunities. 

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