Back to better business in Asia
Asian consumption
emerges almost
unscathed from the
recession as the region’s
appetite for quality and
value grows.
Editor’s note: This article was written
from interviews with Rabobank Singapore’s Food and Agribusiness Research and Advisory division, and the
presentation “Outlook and Opportunities for South East Asian Agribusiness”
by the bank at the 3rd Southeast Asian
Grain Transportation Conference by
the Singapore offices of the American
Soybean Association, U.S. Grains
Council and United Soybean Board.
With the recession nearing a tail-end, feed
and livestock businesses can almost breathe
a sigh of relief as producers take stock.
The collapse of capital markets last
year precipitated a fall in global meat consumption, as consumers tightened their
belts in the face of job cuts and threats to
purchasing ability. Demand for expensive
meats by type and cut plummeted; it was
chicken rather than seafood and beef,
cheaper brisket and flank instead of prime
cuts like loin and fillet.
Such was the trend worldwide
Consumers want high-value choices
Meat consumption increases
Comparing meat consumption levels
in Asia with the developed world draws
attention to the potential for increase in
Asia. Per capita consumption ranges from
under 5 kg in India to 120 kg in Hong Kong
in 2006.
However, while meat consumption has
stabilised or may even decline in the West,
per capita growth in Asia is forecast at 15%
on average between 2006 and 2016 across
10 of the region’s biggest markets. China
marks the highest jump of 42% projected
growth during that period (see Chart 2).
As Asia becomes the new frontier for
high value, “the focus is now on food as
Veiverne Yuen
Thomas Lee Bauer
a regionalised rather than commoditised
product,” says Yuen. Pointing to Asia’s
long-standing food heritage where regional
differences have given rise to a smorgasbord of choices and tastes, Yuen shares
that Asian consumers are increasingly
bought over by distinct regional qualities
in food, right down to the specific breed
of poultry or livestock used in a particular
specialty.
“It is an era of Asian products for Asian
consumers,” notes Yuen.
Feed grain sent to regional centres
There is a growing trend of raw materials like feed grain being sent to several
regional production centres, rather than
a centralised base that produces for the
entire country. A huge grain buyer, Asia will
require even more feed grain to satisfy its
growing appetite for meat.
Procurement styles are changing as
well. To satisfy demands for the niche
inputs that go into making highly unique
products, sourcing needs will be increasingly fulfilled by several suppliers instead
of a few.
In countries with their own feed grain
production such as China, Japan and
South Korea, livestock raising and meat
production will also take place closer to the
grain baskets. The focus is towards high-value meat with strong regional associations
which tie in with perceptions of quality.
