With a combined population of 4.65 Billion in Asia , the developing markets and their requirements for increased complexity of ingredients, the opportunities in the region will continue to grow significantly.

The “organized food sector” constitutes around 27% of the total food industry in Asia, which is forecast to double over the next 3 to 5 years. This is amply demonstrated by the growth in fast food outlets (including KFC and McDonalds), cafes and restaurants.

There is competition between the countries in the Asian region for the world markets with the most efficient and capable being the most successful. Large opportunities exist within the region including India, Philippines and Indonesia, with an abundance of inexpensive quality ingredients available for food manufacturers, the markets over the coming years, will be interesting to watch.

ASEAN / Free Trade:
The Association of Southeast Asia Nations or ASEAN was established on the 8th August
1967 in Bangkok by the five founding Member countries, namely Indonesia, Malaysia,
Philippines, Singapore and Thailand. Brunei Darussalam joined in January 1984, Vietnam in July 1995, Lao PDR and Myanmar in July 1997 and Cambodia in April 1999.

The ASEAN region has a population of about 610 million, a total area of 4.5 million square
kilometers, a combined gross domestic product of almost A$900 billion and a total trade
of around A$1.6 Billion.

As of January 2005 tariffs on almost 99 percent of the products in the inclusion list of the
ASEAN – founding 6, Indonesia, Malaysia, Philippines, Singapore, Thailand, and Brunei
Darussalam, have been reduced to no more than 5 percent. More than 60% of these
products have zero tariffs.

The 10 ASEAN countries now are:

• Indonesia
• Malaysia
• Philippines
• Thailand
• Brunei
• Vietnam
• Myanmar
• Cambodia
• Singapore
• Lao

Consumption-driven Asian economies outshine export-driven ones. Emerging Asia Pacific economies faced a challenging third quarter in 2012 as exports to key developed markets such as the Euro-zone came under pressure. As the austerity policies implemented by many of the countries in the Euro-zone caused a significant slump in demand, emerging market economies, which serve as the ‘workshop of the world’ faced significant difficulties. Almost all major export-dependent nations like China, South Korea, Taiwan and Malaysia faced pressure re export growth.

Still, most of the economies possessed both monetary and fiscal strength to overcome the slowdown. For instance, many of the developing Asia Pacific economies were mulling a fiscal stimulus to pump-prime the economy, should a slowdown arise.

Other Asia Pacific economies that depended more on domestic consumption, but were less reliant on export growth, posted surprisingly strong performances. For instance Indonesia, which boasts a strong consumer market, and the Philippines, with a robust services sector, both posted stellar results.

While Indonesia’s growth for the second quarter of 2015 was the second fastest in G-20 countries, Philippines’s growth for second quarter beat all expectations. Both the economies have hit a sweet spot thanks to fiscal prudence, robust investment in infrastructure, and improved investor confidence. However, India, the other consumption driven economy in the region, posted its worst quarterly growth in almost nine years, as policy decisions favoring investments, remained stalled for the greater part of the year.

Food Ingredients Industry Asia:

In recent years, many suppliers of food ingredients have invested heavily in the Asian region. Some have set up manufacturing plants in countries of the region, others have built new technical centre’s and pilot facilities, with a special emphasis on Asian-based applications, while others have strengthened their marketing networks across the region. The interest of food ingredient suppliers has been aroused by the rapid development of many of the region’s food markets and the clear shift towards processed and consumer ready products.

This trend has been driven by a multitude of factors, including rising disposable incomes, diversification of consumer tastes and growing demand for convenience foods. In particular, a lot of attention is now being paid to the more developing markets such as Indonesia, Malaysia, the Philippines, India, Vietnam, Korea and China. While much of the focus of the food trade with the Asian region is in the bulk commodities, its markets for processed food ingredients continue to expand in the less traditional markets of the region.

In terms of trade with Asia in processed food ingredients, there have been consistent increases in the past four years (since 2012) in exports of artificial sweeteners, emulsifiers, sugar derivatives, starches, cocoa and cocoa products, and essential oils and plants. Among these traditional product lines, niche markets have also begun to emerge: the result primarily of changing consumer tastes, greater purchasing power, and increased market penetration by foreign suppliers.