How the Pacific region’s agriculture and forestry industries can gain access to the booming Chinese economy and its growing need for food and timber is what the European Union-funded Facilitating Agricultural Commodity Trade (FACT) project is examining. Source: Islands Business
Dr Lex Thomson, FACT team leader, visited Beijing to explore opportunities for Pacific Island enterprises in consultation with the Pacific Islands Trade and Invest Office in Beijing, China.
In Beijing, Dr Thomson had talks with Sam Savou, Trade Commissioner and head of Pacific Islands Trade and Invest (PT&I) in China.
According to Savou, there are opportunities for Pacific exporters to enter high-value niche markets for products such as out-of-season tropical fruits, organic coffee, honey, fish and specialty hardwood timbers.
However, along with those opportunities come a number of challenges such as transport logistics, trade protocols, strong competition from Southeast Asia and the need for excellent marketing.
Currently, high volume, relatively low value, round logs from Papua New Guinea (PNG) and Solomon Islands dominate the Pacific Islands timber exports.
In 2010 approximately 3.4 million cubic metres of round logs with a free-on-board value of US$393 million were exported from PNG and Solomon Islands, mostly bound for China.
The outlook for higher value timber products into China is also very good, especially for sought-after red-coloured, heavy, hardwoods, known collectively as hong mu, ebonies and sandalwood (tan mu).
“There is major market potential and unmet demand for these woods, but current opportunity to export from Pacific Islands countries is limited by the supply of mature trees,” says Thomson.
Excellent markets also exist for high value plantation timbers like teak and mahogany, as well as heavy hardwoods from native forests.
However, Pacific Island Countries (PICs) need to market more effectively, emphasising the high quality of their timber with Chinese importers and consumers, in order to receive better returns.