Hong Kong exports boost farmers

Japanese food exporters view rapidly growing market as gateway to mainland China

by Natsuko Fukue

Japan’s agriculture has long had a global reputation for protectionism and weak price competition for rice grown in its rural areas.

But some high-quality Japanese products are starting to buck the trend and make a mark in parts of Asia.

In Hong Kong, Japanese food has for years been popular as a status symbol for the wealthy middle class, thanks to its reputation for high quality and safety.

The export drive has made Hong Kong the No. 1 importer of Japanese food in the world, and some of Japan’s farmers have started regarding the region as a gateway to tapping the much bigger market of mainland China in the future.

“Japan’s population is decreasing. Therefore there will be less demand for Japanese food domestically,” said Junsuke Imai, an official at the export promotion office of the Agriculture, Forestry and Fisheries Ministry.

“We hope the prospects of Japanese agriculture will be improved by exporting our food overseas.”

Japan’s total exports of agriculture and marine products increased to ¥433.7 billion in 2007 from ¥295.4 billion in 2004. The agriculture ministry hopes to expand exports to ¥1 trillion by 2013.

The ministry’s top target is Asia, where a wealthy middle class is growing due to the rise of the region’s economic power.

In 2007, Hong Kong ranked at the top in importing Japanese farm and marine products, accounting for 18.4 percent of all such exports and overtaking the United States, the largest importer for the previous nine years. Other important customers included South Korea, China, Taiwan and Thailand.

Joe Tang, a 33-year-old doctor in Hong Kong, said by e-mail that he always buys Japanese snacks, fresh vegetables and fruit.

“I believe that Japanese vegetables and fruit are more healthy and organic. Japanese food can remain fresh as Hong Kong is not far from Japan,” he said.

Because much of the food in Hong Kong is imported from China, where there have been several recent food-related scandals, he said food safety is a concern for the region’s people.

“Hong Kong people like Japanese products and foods very much,” said Chun Keung Liu, chief PR officer of the Hong Kong Economic and Trade Office in Tokyo. “In Hong Kong, you can see so many Japanese supermarkets and restaurants.”

But for many Hong Kong people, Japanese food still remains an expensive luxury product.

According to an agriculture ministry survey in 2007, the price of Japanese fruit in Hong Kong was double that of fruit imported from other countries.

“I buy Japanese fresh food such as fruit only on the Chinese mid-autumn festival day or on my pay day, or when I send them as a gift for my friends,” said Phoebe Lam, 24, who works at the Consulate General of Japan in Hong Kong.

But the high quality and luxury image that appeals to wealthy middle-class consumers has made many Japanese foods a remarkable success story.

For example, Amaou strawberries grown in Fukuoka Prefecture cost 148 Hong Kong dollars for 600 grams in 2007, which was the equivalent of ¥2,200 at the time, said Yoshima Aoyagi from the sales department of the Fukuoka branch of the National Federation of Agriculture Cooperative Associations (Zen-Noh). The price in Japan for the same amount of strawberries was around ¥1,000 at the time.

Despite the high price, the export volume of Amaou strawberries to Hong Kong has continued to increase, jumping to 70.4 tons in fiscal 2007 from only 1.4 tons in fiscal 2003.

Aoyagi of Zen-Noh Fukuoka sees Hong Kong as a test case for Japanese food to enter the huge Chinese market. Currently, strawberries are not exported to China because the only Japanese fruits allowed in are apples and pears.

“If the regulation on imported fruits in China is loosened, we hope to sell our strawberries in China,” Aoyagi said.

Yukio Minagawa of the Business Service Center at the Japan External Trade Organization also says there is growing interest in Hong Kong as a potential gateway to consumers in China.

According to Minagawa, the number of farmers and food manufacturers who sought consultations regarding the export of food to Hong Kong tripled in 2008 compared with 2006.

“Recently, more farmers and manufacturers are informed about opportunities in Hong Kong,” he said.

Aoyagi of Zen-Noh Fukuoka said that to increase its sales in Hong Kong, the branch has been organizing promotional events such as offering strawberry tasting at Hong Kong branches of Japanese supermarkets.