Great Potential For Malaysian Food Products In US

| 08/02/2009 | Reply

By Manik Mehta

NEW YORK, Feb 6 (Bernama) — While the ongoing recession has adversely
affected consumer demand in the United States, the biggest market for
Malaysian products, foreign suppliers are scrambling to devise
marketing strategies to push products that have good growth potential
even in a depressed market state.

Malaysia has identified its processed food products as a category
that is inherent with “great potential” for business in the United
States.

“Our discussions with the trade reveal the full potential of
Malaysian food products, particularly the halal segment, in this
burgeoning market has not been fully realised,” said Wan Latiff Wan
Musa, Malaysia’s trade commissioner in New York, told Bernama.

With a population of some five to six million Muslims in the
country, the halal food segment held out “good promise” in the United
States.

Indian grocery stores, catering not only to the increasingly
wealthy and cash-rich Indian community but also to South Asian and Arab
nationals, are proliferating in the country.

Almost all Indian grocery stores stock food products that include
Malaysia-made parathas, bread and other products such as chicken curry
and dal.

Indeed, Malaysian food products compete quite well with similar products from India, the United States and the United States.

Malaysia-made parathas are very popular amongst Indian and South Asian consumers who value the rich texture of the products.

Nonetheless, health regulations are tightening in the United
States where regulators are trying to eliminate the use of trans fats –
a law to that effect is already in place in a number of states – and
reduce the use of salt that is responsible for a number of health
problems.

“We are going to aggressively court Indian and Arab stores for our
products which are already well-known amongst the Chinese grocery
stores,” Wan Latiff said.

While the outlook for selling processed food products in the US
market may be promising, there is concern over the decline in demand
for other products such as furniture, electronic and electrical
products, resulting from the economic crisis that has enveloped the
United States.

Wan Latiff said the downturn had not “severely affected our exports, as we had originally feared”.

“Yes, there was a 2.6 percent decline from January to November 2008 compared to the corresponding period in 2007.

However, our exports had declined by 10 percent in 2007 over the previous year,” he said.

The two-way trade between the United States and Malaysia in the
first 11 months of 2007 amounted to US$40 billion, with Malaysia’s
exports touching US$30 billion.

Malaysia’s exports from January to November 2008 amounted to US$29
billion. US exports to Malaysia from January to November 2008 amounted
to US$12.2 billion, up from US$10.6 billion from the corresponding
period the year earlier.

Malaysia’s major exports to the United States comprise electronic
and electrical products, refined palm oil, industrial palm oil-based
chemicals and processed food.

However, as Wan Latiff pointed out, Malaysia’s exports of
commodities and processed foods have, in fact, increased even in a
crisis year.

“Malaysia’s exports to the US were on the upward trend since January 2008 after falling in the second half of 2007.

“In fact, exports fully recovered in April 2008. The value of our
exports was above the 2007 level until September But exports began to
fall below the 2007 level in October as the US economic recession
deepened in the last quarter of 2008,” he explained.

Besides the halal food segment, Wan Latiff also sees good
potential to increase exports of construction materials following the
much-publicised US$800 billion economic stimulus package by the Obama
administration, provided “the official procurement policy is not
restricted by the Buy America Act (BAA) which will emphasise purchase
of American goods and services”.

Demand for industrial and medical gloves is expected to continue its 2008 upward trend.

Acknowledging that the BAA could pose a hurdle in the way of
increasing exports, Wan Latiff said he was not sure about the extent to
which it would affect Malaysia’s exports.

“We hope the US administration will not apply the BAA against Malaysia’s exports,” he said.

The BAA guidelines have not been finalised but it will apply to
materials such as timber-based and steel products needed in the
construction sector as part of modernising and expanding the
infrastructure.

But Wan Latiff sounded optimistic that the creation of an
additional three million jobs as a result of the stimulus package will
also boost consumer confidence and increase demand.

“I am confident there will be an economic recovery by the end of 2009,” he added.

— BERNAMA

Category: Asia, The Americas

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