By LIBBY MIDDLEBROOK
An upsurge in the number of Korea-based vegetable producers has cut back prices and reduced demand for New Zealand-grown capsicums in Japan.
Managing director of the country's largest capsicum grower New Zealand Gourmet, Paul Martin, said demand from Japan had fallen by 65 per cent during the last
12 months.
"In 1997 we dominated the market over there and we were able to get very good profits," he said.
"Our products...we're selling them for 40 per cent of the value then we were selling them two years ago."
Between 1991 and 1997 the Korean government invested millions in the country's horticulture industry by subsidising glasshouse building projects. While New Zealand has about 11ha of glasshouse in capsicum production, Mr Martin said Korea's operation has swelled to more than 50ha.
"The market has dropped by 60 to 70 per cent from what we shipped last year and Korea has increased by 300 per cent.
"Korea will be coming into full production in December and it's going to have a huge affect on us."
He said Korean growers benefited from cheaper labour costs and better market access to Japan, which allowed them to sell capsicums at lower prices.
"We can't beat the Koreans on price so we have to beat them on quality and service and innovative marketing."
Mr Martin said the New Zealand Gourmet, which exports 80 per cent of its capsicums throughout the Asia/Pacific region, would concentrate on finding new markets for its capsicums, fresh fruit and other vegetables. At present the company is awaiting approval to export capsicums to the United States.
