Fruit and vegetables to Singapore

(Last updated: 15 Aug 2008)

Trends and opportunities

The market

Fresh tropical fruits are consumed in far larger quantities than fresh temperate fruits (excluding apples, pears and oranges). These tropical fruits include:

• papaya (or paw paw)
• watermelon
• durian
• bananas
• pineapple
• rambutans
• mangoes

These tropical fruits are popular with Singaporeans because they are part of the local food culture and well-known to local consumers. They are readily available and cheaper than fresh temperate fruits.

Most Singaporean consumers are careful when buying non-traditional products, eg. fresh temperate fruits, which are relatively expensive when compared to fresh tropical fruits. The three most important buying criteria are quality, price and taste/texture.

A number of challenges exist for suppliers of fresh temperate fruits to Singapore. Fruits deteriorate rapidly in Singapore's heat and humidity; therefore proper handling of these fruits is very important to ensure their marketability in a quality-conscious market. In addition, badly bruised and pockmarked fruits are common in some of the major supermarkets due to poor handling during display and consumer damage (eg. customers check fruits for ripeness and freshness). The damaged fruits are normally re-packed in bags and sold at a discounted price.

Opportunities

Singapore imports virtually all its fruit and vegetables. Australia's proximity has ensured that Australia is seen as a natural supplier, but success will depend on quality produce and the level of service from exporters. Australia's ability to supply during the northern hemisphere's off-season is seen as an advantage.

The following are some of the fresh temperate fruits exported to Singapore:

• apples
• pears
• oranges
• stone fruits (avocados, apricots, peaches)
• cherries
• strawberries
• raspberries
• blueberries

Some temperate fruits (eg. apples and pears) exported to Singapore are also re-exported to neighbouring countries such as Malaysia, Thailand and Brunei Darussalam.

Competitive environment

Competition in the market for fresh temperate fruits is driven by:

• Being in the market early and creating surpluses so that other distributors are not able to import more fruits in a limited market size.
• Quality, appearance, freshness and taste/flavour.
• Competitive retail price.
• Educating the consumers on buying/eating practices, preparation and cooking methods.
• In-store promotions where country promotions are associated with price discounts (the supply of fresh temperate fruits is often linked to the promotional activities of the producing nation's organisations) – USA, NZ and Australia have organised extensive series of in-store promotions over the past few years.

Tariffs, regulations and customs

The Agri-Food and Veterinary Authority (AVA) regulates the safety of all imported or locally produced food until just before it hits the retail market. AVA is responsible for setting and enforcing food safety standards as well as overseeing food labelling. AVA's expertise in accrediting food sources, backed by its up-to-date diagnostic capabilities, ensures that food arriving at the retail end is safe and wholesome.

The import of fresh fruits and vegetables is regulated under the Control of Plants Act and its subsidiary legislation by AVA’s Import and Export Division (Fruits & Vegetables Inspection Section). Fresh fruits and vegetables may be imported from any country. Imports must meet the following requirements:

1. Traders are required to apply for a Licence for Import and Transhipment of Fresh Fruits and Vegetables. Online application of the licence is done via the AVA website. Effect since 1 October 2006, there is an application fee of $21.50 (inclusive of seven per cent GST) for every new application. The licence for import and transhipment of fresh fruits and vegetables is S$378 per annum and the fee payable for the import of fruits and vegetables is S$3 per consignment.
   
   
2. Under the Control of Plants (Import & Transhipment of Fresh Fruits & Vegetables) Rules, fresh fruits and vegetables imported shall not contain any prohibited pesticide, or levels of pesticide residue or toxic chemical residue exceeding the prescribed levels specified in the Ninth Schedule of the Food Regulations or recommended in the Joint FAO/WHO Codex Alimentarius Commission.
   
   
3. An import permit issued by AVA is required for every consignment of fresh fruits and vegetables.
   
   
4. A phytosanitary certificate is required for consignments of fresh fruits and vegetables imported from countries in the South American tropics. This does not apply to Australia.
   
   
5. The containers (eg. cartons, baskets) of fresh fruits and vegetable must be labelled with the following at the time of import:
   • Name and address of the producer of the products
   • Product description
   • Date of export/packing
     All imported fruits and vegetables are to be tagged to indicate their origin. This basket-tagging system allows AVA to identify the farms that use excessive pesticides on their produce.
     
     
6. Upon import, the fresh fruits and vegetables may be subjected to inspection (ie. document and physical inspection) by AVA. Sampling for laboratory analysis may be required. This is done to ensure that there are no unnecessary residues of agricultural chemicals on the fruits and vegetables. The department conducts routine random sampling on imports from all sources. Some consignments may be placed on ‘hold and test’ pending the outcome of the laboratory analysis.

The Sale of Food Act Chapter 283 (the Act) provides regulations on:

• packaging
• sale by date/expiration date
• labelling requirements
• the minimum or permitted levels of certain constituents of each food type

Fresh fruit and vegetables enter Singapore duty free. A seven per cent Goods and Services Tax (GST) is levied on all transactions including imported goods. The GST is calculated on the costs, insurance and freight (CIF) value of the goods, plus commission, other incidental charges and any customs duties.

Industry standards

Singapore is recognised internationally for its high standards in food hygiene and safety. The Agri Food and Veterinary Authority (AVA) and the Ministry of Environment are the regulatory authorities, which ensure that food and beverage establishments maintain stringent standards of hygiene.

Singapore's food regulations feature relevant standards that are applied internationally and have been adopted and/or modified to suit Singapore's conditions. Such controls are in place for public health, security or safety reasons. Under circumstances where any foodstuff or ingredient falls outside the scope of the Food Regulations, permission is first required from the Food Control Division of AVA before approval can be obtained to import it into Singapore. In addition, all new food ingredients being introduced into the country are to be submitted to the Food Advisory Committee for approval before they can be accepted for use by food processors in Singapore.

Marketing your products and services

Market entry

Suppliers can enter the Singapore fresh fruit industry through the following categories:

• Retail
  Fresh fruits and vegetables are distributed through supermarkets and wet markets and fully dedicated fruit shops in the Housing Development Board Estates. Wet markets have dominated the retailing of fresh fruits and vegetables; however, this pattern is now changing. Younger consumers are increasingly shopping at supermarkets rather than the usual wet markets, as supermarkets operate longer hours, enabling consumers to shop after work. The cleaner environment and wide products range also attract younger consumers to supermarkets.
  
  
• Food service
  Singapore is the transportation and tourist hub of South East Asia and is one of the fastest growing regions in the world. It has a very important food service industry with many hotels, restaurants, airline caterers, ship chandlers, hospitals and clubs.
  
  
• Domestic manufacturing
  Singapore has a limited domestic food manufacturing industry, based on imported materials. Vegetable and fruit processing is not extensive, but a small proportion of imported fresh fruits are used by local companies.
  
  
• Re-export trade
  In comparison to the re-export trend in the late 90’s, much lesser fresh fruit imports are being re-exported to countries such as Malaysia, Indonesia and Thailand. This is a result of the current economic conditions surrounding the region and the credit risk involved.

Pasir Panjang wholesale market is the oldest and largest wholesale market in Singapore. It houses dried goods, fresh fruit and vegetables, cold rooms and offices.

Fresh fruit and vegetables are usually imported by agents or distributors who service wholesalers, retailers and the food service sector (hotels, restaurants and ship providers). Margins are made by the various parties along the distribution chain. This practice is difficult to avoid and, as a result, adds to the cost of distribution and inevitably increases the retail price of fruits and vegetable.

The key barriers to entry into the Singaporean fresh fruit market include:

• Limited access to high quality local sales and marketing personnel
• Limited access to distribution channels
• The intense price-based competition
• The strength of existing players, particularly those with well-established distribution functions and strong marketing, technical and research support
• Local taste and preferences

The following factors should be considered by Australian exporters:

• The general business risk in the sector
• The competitive threat from existing players and potential new entrants
• Product life expectancy (ie. whether the sector has long-term potential)
• Price sensitivity in the sector among importers, retailers, local users and end consumers
• Seasonality in demand (ie. traditional festival periods and other events)
• Potential market size
• Potential market growth rates
• The effects of the regulatory environment (government regulations, attitudes and policies on consumption of a particular product)
• The power of distributor channels to affect the future success (or failure) of the product
• The levels of access to consumers that can be reasonably attained
• The required levels of advertising and promotion expenditure and other support to be provided to the distributor

The following activities have had very positive effects on fruit consumption over the past few years:

• The Singapore Government’s healthy eating campaigns have stressed the benefits of consuming more fruit and vegetables.
• Regular aggressive marketing campaigns by organisations such as Horticulture Australia Limited and ENZA.
• Promotions in supermarkets such as lucky draws and sampling conducted in major supermarket chains such as Cold Storage, NTUC and Shop and Save have provided more exposure for temperate fruits.

The exported products need the expertise of a good distributor who can work with national promotions and access the target market through appropriate retail outlets. They will need:

• A high degree of differentiation
• High advertising and promotion to maintain awareness and differentiation
• Some form of promotion with a theme to emphasise the benefits of buying Australian produce. This is necessary as the market is exposed to similar products from other countries that have been available in the market for sometime

Transport

Fresh fruits are imported both by sea and airfreight by agents and distributors. The freight time varies depending on the port of loading. For more specific information on freight, please speak to your local freight delivery companies.

Links and industry contacts

Government, business and trade resources for Singapore

Agri Food and Veterinary Authority (AVA) – www.ava.gov.sg
Singapore Customs – www.customs.gov.sg  
Singapore Fruits and Vegetables Importers and Exporters Association – www.singaporefva.com

Service providers

Carrefour – www.carrefour.com.sg
Cold Storage – www.coldstorage.com.sg
NTUC – www.fairprice.com.sg

Australian resources

Horticulture Australia Limited – www.horticulture.com.au and www.australiafresh.com.au