Asia offers significant opportunities for New Zealand primary producers but requires an increase in incomes and social security to realise its full potential – a Rabobank senior analyst told customers in Te Puke.

Rabobank Food & Agribusiness Research and Advisory senior analyst Marc Soccio met with customers at a luncheon in at the Kiwi 360 in Te Puke yesterday to discuss development in Asia.

Marc Soccio, senior analyst with Rabobank Food & Agribusiness Research and Advisory.

He says in countries with little or no social security, people save a significant proportion of their income, and spend less than in countries like Japan, which have some level of social security.

'China is transitioning to a consumer economy in which people will save less and spend more but social security spending will need to increase for the savings rate to drop.”

The rate urbanisation is another aspect which is affecting how consumers shop, he says.

'Those in rural and outlying areas shop more at wet markets and street markets but in China, Indonesia and the Philippines they tend to shop more in the sort of channels we are more familiar with like supermarkets.”

While other economies were shrinking, Marc says the International Monetary Fund is predicting the Asian region to grow its share of global GDP to around 30 per cent in the next five years.

As incomes increase consumers can afford to buy more high quality food including dairy products and fruit.

Despite its recent economic slowdown, Marc says Japan provided an interesting example of an Asian country which had gone through the industrialisation process to become a high income, advanced economy.

'From 1965 to 1990 there was huge growth for all sorts of different food products in Japan and this is what we expect to see in other developing countries. Food spending has flat-lined in Japan, but dairy and fruit are still strong.”

Many Asian countries will try to meet their own food needs but climate, resources and know how are likely to be limiting factors so they will still need to import food.

New Zealand and Australia would however continue to meet competitions from other primary producers including those in South America so it was essential to build relationships in Asia.