Negligible penetration of North American, UK markets by local products - surveys
Poor image, packaging, import regulations among problems
November 19, 2002
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New York and Toronto
These surveys, conducted by Kenneth Weiss, a consultant hired by the USAID/GEO project, encompassed studies in areas of fresh produce, seafood, processed food, food supplements, kitchen implements, gold jewellery, handicraft and furniture.
Of a population of 723,127 West Indians living in New York, it is estimated that 400,000 to 500,000 of these are Guyanese, while there is a growing community in New Jersey which promises an expanded market.
Guyana has penetrated markets in New York, especially in the area of seafood where in some cases "it sells so fast that is neither refrigerated nor frozen in the store," the survey found.
In 2001 alone a study of selected exports from Guyana to the United States shows that nearly US$11M was earned from products, with fish and shrimp making up a significant amount of this revenue. Processed foods, food supplements such as GPC products and cookware such as purple heart rolling pins, were also found to be the markets penetrated by locally produced exports in spite of competing products of higher quality which cost less from other countries like Trinidad and Jamaica. "Guyanese-styled" products produced in the US were also among the competitors.
Other potential exports include locust bark, Halaal canned meat, processed mangoes, pineapples and other fruits, in a market where Guyana has the advantage of the image that its products are natural and taste better.
However, the lack of export mentality; import regulations; quality and unacceptable packaging; and expensive freight costs from Guyana, were all cited as the major constraints to exporting to New York.
Export mentality referred to proper business ethics, honesty, reliability, consistency in quality and quantity and regularity of supplies.
While there are no import duties many local products are inadmissible on the US market because of import regulations. For example an import permit from the United States Department of Agriculture-Animal and Plant Health Inspection Service (USDA-APHIS) is required in order to import fruits and vegetable from Guyana. One way of facilitating the admissibility through APHIS is the marketing of fresh produce of a higher quality.
Meanwhile, in Toronto where there are around 400,000 to 500,000 West Indians, it is calculated that the Guyanese market size is around 140,000.
With precious stones making up the majority of imports however, Guyana has only penetrated a limited market in the fresh foods area where the West Indian appetite for mangoes is dominated by importers from Guyana. Other Guyanese products which could find a potential market includes processed mangoes, yams, tropical fruit pulp, coconut water and sugar cane juice. Guyana's biggest competitors here are Jamaica and Trinidad and Tobago.
Import regulations, though found to be problems, were not the major constraints to exporting to this market. Limited transportation to Toronto, which affects the volume of exports as well as deficiencies in packaging were found to be the biggest limitations to exporting to this market. Poor packaging, in used bottles for example, affected the quality of the products and labelling designs did not meet Canadian requirements such as being bi-lingual and showing the ingredients and name and location of the manufacturer, the survey showed. In the area of processed foods for example, there is a perception that it is risky to buy from Guyanese companies because they often do not follow good sanitary procedures, do not carry product liability insurance and do not ship the same quantity that was ordered.
The survey of this market, which looked specifically at openings for fresh produce, processed foods, organic produce, seafood and food supplements, found that though the opportunity exists, penetration of the markets was negligible and competition substantial.
Conducted by export promotion officer Uchenna Gibson, the survey found a market of 85,000 to 120,000 Guyanese.
However perception, non-tariff trade barriers, quality, packaging and expensive freight and distribution were found to be the major constraints to exporting to this market.
Dalgety Tea and plantain chips, Banks Beer, Continental curry Powder, Major's Cassareep, Prestige Mixed Essence and Mayo Achar are the Guyanese products currently on the market in London while products with potential for this market include dried spices, cassava and other tubers, Scotch Bonnet Peppers and packaged processed food such as plantain chips, cassareep, and pepper sauce. Another growing market, the survey found, was that for organic agriculture, which makes up 70% of imports.
According to this survey conducted by Marsha Krigsvold, an economist with the Honduras Foundation for Agriculture Research, the failure of local exporters to meet international market requirements coupled with both regional and international competition and strict import restrictions, is responsible for failure to access the markets or increase exports.
The market in the Caribbean islands studied in the survey is estimated to be sustained by 7.2 million people, including tourists.
It was however found that this was contracting due to migration and declining tourist arrivals.
According to her findings, from speaking with retailers such as supermarkets and wholesalers, Guyanese fruits and vegetables such as mangoes, pineapples, bora, pumpkins, yams and eddoes can be exported or sold increasingly to these countries if they could meet the market requirements.
Islands with little, if any, horticultural production, such as Barbados, remain the most attractive importers, as does Trinidad and Tobago, and these are the two best prospects for increased exportation. St Maarten as well as Antigua, where financial, weather and soil problems have rocked the agriculture-based economy there, are also prospects despite competition and transportation cost.
The markets in Guadeloupe and Martinique and St Lucia were however found to be closed, being highly dependent on foreign imports, or, as in the case of St Lucia, where there is still large domestic agricultural production, it was found that there was a deliberate import substitution policy and imposition of sanitary restrictions.
The researcher found that the importers found the image of Guyanese products to be negative.
They are of poor quality or condition; they are insufficiently packaged; products were delivered late or never delivered at all; when they were delivered they were found to be less than what was ordered; Guyanese products are more expensive compared to other; there is a limited product line; and exporters over-bill and demand cash advances.
The three surveys concluded that there is need for investment in the development of exports to meet international market requirements and improve competitive advantages. Other recommendations to access these markets included working to remove barriers or finding ways around them, such as exporting value-added or semi-processed products for target markets or becoming direct suppliers in these countries to get around importation regulations; the establishment of a quick one-window system by government for export documentation and the creation of a private/public sector committee to improve export facilitation. It was further suggested that a freight users group for example could be formed to analyse transportation of exports and make recommendations for improving it.
"Image is everything in an export market," Krigsvold said.
Since almost all buyers already have suppliers, it is necessary to convince them that local exporters have the high quality product, at the right price and will provide reliable service, to convince the buyer to substitute or increase sales volumes of local products. (Andre Haynes)