ZIMBABWEAN sugar exporters have a big opportunity to penetrate the Malaysian market — the world's 45th-most populous country — as demand is increasing on that market, according to ZimTrade.
The export promotion body observed that Malaysia was also a suitable entry point to other south-east Asian economies, potentially opening up more markets for Zimbabwe.
Zimbabwe's sugar industry is one of the country's largest agricultural subsectors and is set to become a major export earner in the coming years.
According to the most recent data from the United Nations Comtrade database on international trade, exports of sugar and sugar confectionery earned the country US$17,14 million in 2021.
Zimbabwe's main sugar export markets are South Africa, Botswana, Namibia, Zambia, Mozambique and Malawi.
“As Zimbabwe seeks to expand its markets, producers need to begin looking beyond these markets to find new opportunities in distant countries such as Malaysia. As an emerging economy and a major player in Asia's food market, Malaysia can provide a lucrative market for Zimbabwean sugar producers looking for new sources of revenue,” ZimTrade said.
“As a result, understanding how to access the Malaysian sugar market is key for Zimbabwean exporters. If one is a sugar exporter looking to expand into markets outside of Africa, Malaysia is an ideal partner.
“Sugary foods are a huge part of the national diet, consumed daily by Malaysians who combine sugars with other food items or simply use them as a sweetener.
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Malaysian manufacturers do not produce enough sugar to meet the country's current demand.”
For example, according to a report by Knowledge Sourcing Intelligence, over the first seven months of 2022, they have imported 2,2 million tonnes and exported just 330 000 tonnes — which points towards an undersupplied market in need of external partners.
“This is where Zimbabwean exporters come in by tapping into this market opportunity and offering their unique product set to Malaysian companies and consumers, they stand to be rewarded with increased revenue streams that could help fuel further growth in other areas too,” ZimTrade said.
It added that Malaysian raw sugar imports were entirely duty-free and refined sugar imports were also duty-free but capped annually at 100 000 tonnes to support refiners.
Per capita sugar consumption is increasing on the market, thanks to rising incomes and the switch to more modern diets with more processed foods and drinks.
Further to this, ZimTrade said Malaysia is one of the world’s most important raw sugar importers. According to Observatory of Economic Complexity, in 2021, Malaysia imported US$674 million in raw sugar, becoming the 11th largest importer of raw sugar in the world.
These factors make this an ideal time for Zimbabwean exporters targeting the Malaysian market, it said.
“Zimbabwean exporters are in an opportune position to capitalise on the growth of the Malaysian market, particularly when it comes to fast moving consumer goods (FMCGs), Halal products and pharmaceuticals."
The Malaysian economy is known for its strong consumer spending, making it an ideal destination for exporters looking to diversify their portfolios.
Additionally, there is a large and growing demand for Halal products in Malaysia, providing a huge opportunity for exporters from Zimbabwe to tap into this growing market.
Malaysia is also becoming an important partner in the fields of services, Fintech, and other technological advances, further expanding the potential opportunities available to Zimbabwean sugar exporters.
By leveraging on Malaysia's established infrastructure and trade agreements with other countries, ZimTrade said Zimbabwean companies could explore new markets and increase their customer base.
In terms of market entry strategies, the organisation said developing relationships with local industry professionals was essential when it came to entering a new market like Malaysia.
