Chinese strategy
OPINION: Fonterra may have sold its dairy farms in China but the appetite for collaboration with the country remains strong.
“China has become a very new and important market but the companies are well established there,” he says.
“In India, where they are naturally sheep meat eaters and have a massive population, we haven’t done much business yet.
“That is in part because there are market access issues and getting the protocols agreed and all that stuff.
“That is the technical side of market access. We don’t have a free trade agreement but our government is working on one.
“We face high tariffs and things like that, so there are barriers but there is a bit of business being done.
“But that is the sort of market that in the future will be extremely important because of that significant population; they are natural eaters of sheep meat.
“They will be an important market because it is all part of creating that competitive tension.
“China has become a very important sheepmeat market. It will be good to have another market in that broader region that is also competing for that product.
“It is all about keeping markets honest and not becoming beholden to any one area of any one market because we would then lose the leverage we have.”
Africa is a whole new continent we have had little to do with except the northern parts like Algeria and Morocco, says Ritchie.
He says there are not necessarily opportunities there right now but there could be in future.
“Indonesia is more of a beef market and in 2000-2010 it grew into our second-largest beef market. But it is still only 10% of our market because of the significance of North America.
“But we’ve had market access issues in Indonesia which we have been working through and it has been a rollercoaster in terms of our fortunes. It has been up and down a couple of times as they have restricted imports to try to grow their domestic industry,” Ritchie adds.
“That hasn’t proved successful so now they have opened the door again and New Zealand and the USA have taken Indonesia to the WTO, from which we are awaiting results. For NZ, that is on beef access and for North America it is horticulture.”
