March 2022 monthly update from our global network of In-Market Representatives about what's going on in markets around the world.
Food Export – Midwest and Food Export – Northeast have developed a network of uniquely experienced 19 overseas In-Market Representatives around the globe. These local marketing experts with food industry experience provide on-the-ground help in assisting Food Export – Midwest and Food Export – Northeast to implement our various programs and services.
In addition, through regular trade servicing, these local representatives are aware of issues, trends and opportunities for international buyers to connect with suppliers of U.S. agricultural and food products. Every month we will share with you some of the top market information from the trade servicing reports we receive to help you improve your international exporting efforts.
On Thursday, February 24, 2022 Russian president Vladimir Putin ordered a military invasion into Ukraine, due to the country’s increasing orientation towards Western Europe, and thus the European Union. Escalation of the conflict came as a surprise as experts predicted Putin would only aim at showing military strength to NATO (The North Atlantic Treaty Organization) and would withdraw from actual military actions.
One of the many things that this ongoing conflict will impact is internal and external trading in the EU. Russia is the world’s biggest exporter of fertilizer, gas, and wheat while the Ukraine is the world’s third largest wheat supplier. As well as a significant supplier of maize and sunflower oil.
At $192.3 billion, Russian trade with the EU accounted for about one-third of the country’s total trade in 2020, making the EU by far Russia’s largest trading partner. Russia also supplies about 38% of the EU’s gas imports as of 2019 with an upward trend in the past few years. Therefore the current sanctions in place bring major consequences for economies and trading routes all over the European continent.
Prices for agricultural products such as wheat, corn, and sunflower oil have already risen dramatically since the beginning of the conflict.
While leading to short-term challenges within Europe, sanctions might also create opportunities for U.S. companies. Especially for agricultural commodities, as well as fish and seafood products. Predicted loss of Russian supply creates new demands that can be covered for American producers.
Food and household goods are recording significant price jumps resulting from increased transportation costs and supply shortages. It can be expected that relations with Russia won`t normalize anytime soon, and inflation will remain high in near future. For American exporters, this can be beneficial as higher prices allow higher margins for external suppliers.
The Hong Kong Retail Management Association announced that the total retail sales value (RSV) recorded a year-on-year increase of 6.2% in December 2021. It is believed that this is due to the stable pandemic situation and the festive atmosphere of the Chinese New Year.
For 2021, the value of total retail sales was estimated at $45.3 billion, an increase of 8.1% from 2020. The value of online retail sales was provisionally estimated at $3.7 billion, a jump of 39% compared to 2020. The increase in retail sales was mainly due to improved sales of electrical and consumer goods.
Sales of commodities in supermarkets decreased by 8.4% compared to 2020. Sales of food, alcoholic beverages and tobacco dropped 2.7% in value and sales of commodities in department stores lowered 3.3%.
According to a recent article from Aju Business Daily South Korea’s vegan meat market is growing rapidly to meet the demand of an increasing population of vegans in the country. Data from Euromonitor shows that South Korea’s vegan meat market was recently valued around $10.2 Million. Market research firm EMBRAIN conducted an online survey earlier this year in conjunction with Shinsegae Food, a food company affiliated with South Korea’s retail group of the same name. The survey results showed that young Korean consumers have positive reactions and feelings towards vegan meat products.
When asked why they consume alternative meat more than 70% of those surveyed picked environmental conservation as the driving factor. About 43% of the consumers answered that they had tried alternative meat products before and 78.2% said they wish to try vegan meat products in the future. 40% have already tried vegan pork used in sandwiches and salads and 34.5% have tried plant-based beef.
Ireland-based Kerry Group has released its annual “Taste Charts” trend report for 2022. The top trend they are highlighting is comfort food, but with a twist! Such as ‘new tastes paired with familiar flavors’. The reasoning behind this trend is cited as nostalgia, a wish for authentic representation of foods remembered.
Another trend, possibly inspired by the pandemic, is the desire for immune support foods and an ongoing interest in plant-based, vegan, sugar-free and lower-carb, plus ingredients such as collagen. However, consumers are not willing to compromise on taste for these elements.
You can check out the entire 2022 Taste Chart here.
An article from VNExpress back in January explains how Vietnam plans to cut its value-added tax by 2 percentage points starting February 1, 2022. The goal of this reduction is to help boost recovery after two years of COVID-19 impacts.
According to Decree #15 of the Vietnamese government the tax break will last until the end 2022. Some sectors that have not been as affected by the pandemic will not be eligible for the tax break including, communications, information and technology, finance, banking, securities, insurance and real estate.
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