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21 Jan 2011


Organic Food to Taiwan: Export Opportunity for Thailand (Business Brief No.3029)

Organic food in Taiwan is regarded as a promising market with bright opportunities lying ahead for Thai exporters due to a relatively high average growth rate of 30 percent between 2005 and 2009. In addition, their organic food market will likely grow further, thanks to strong economic fundamentals in Taiwan, resulting in high purchasing power there. As a result, Taiwanese with significant buying power have turned to consume food for health as well as realizing the importance of environmental conservation. Such ‘food for health' trend and strong fundamentals of private sector consumption of as high as 58 percent of their GDP have together helped considerably toward boosting the organic food market there.
KResearch is of view that Thailand will likely have many opportunities to penetrate into the Taiwanese organic food market because we are one of the world's largest food exporters, with many natural resources and a large variety of plant produce. Moreover, Thai entrepreneurs have considerable expertise in such product categories. Also, Thai organic farm produce has even been received well in Europe, which has very strict standards for imported products.
Products that should be exported to Taiwan include organic rice and organic asparagus. In addition, other products that should be developed further as organic produce for export to Taiwan would include other organic vegetables, such as cabbage, Chinese cabbage, Cos lettuce, sauces, salad dressings, organic seasonings, canned vegetables and fruit, as well as juices made from organic vegetables and fruit. Currently, major rivals for our organic products include USA and Australia. Other rivals that may play an important role in the Taiwanese organic product market in the future would include China, due to their large cultivation capacity and a distinct transportation advantage, plus the possibility of further development in their production quality.
An obstacle for Thailand would be our relatively low production capacity that is insufficient to support export demand. As a result, we need an urgent plan to increase that volume via government stimuli, such as initiatives to help expand cultivation areas and developments in produce quality for attracting more income and sustaining expansion into markets. Regarding efforts to enhance our export opportunities in the category of organic foods, businesses here may increase the size of the import orders through importers and distributor networks in Taiwan that operates comprehensive business solutions (from purchasing products in Thailand to distributing them in Taiwan) to make export business transactions more convenient for Thai organic food exporters.

As for important impediments to Taiwanese market penetration, one would be that Taiwan has not yet issued any certifications for Thai organic food. We are therefore limited to exporting it only as ‘hygienic' products. Thai government sector should try to urge the Taiwanese authorities to issue relevant organic product certifications to enhance the value of our Thai organic food exports which now show satisfactory growth there. In addition, there are some ambiguities on standards between ‘organic' and ‘hygienic' products. Such misunderstandings may lead to a sub-standard production by Thai exporters which may reduce the reputability of Thai organic foods and create further obstacles for Thai exports to Taiwan.