Clay Eastwood, manager of International Marketing

by Clay Eastwood, Manager of International Marketing

Monthly Market Highlight

Singapore is an increasingly important market for U.S. agricultural exports, and U.S. pork specifically. In 2017, the U.S. pork export market in Singapore increased by almost 20 percent from 2016, reaching $17 million. However, U.S. pork and pork products face strong export competition from Brazil, Australia, Netherlands, Spain, and China. Even though Singapore maintains one of the most liberal, open markets in the world, U.S. pork and pork products are currently subject to increased sanitary and phytosanitary requirements, which effectively function as trade barriers. Nevertheless, pork is a significant protein staple in the diets of the Singapore population, and many high-end retail outlets are willing to pay a premium for high-quality U.S. pork products. Top imported U.S. pork and pork variety meats include picnics, loins, ribs, bellies, branded processed items, shoulders, trimmings, pork skin, livers, neck bones, brisket bones, stomachs, hearts, and fat. The National Pork Board, along with the U.S. Meat Export Federation (USMEF), realize the value and opportunity of an emerging market like Singapore, and as such, invested $255,000 in the ASEAN (Association of Southeast Asian Nations) region in 2018. This investment encompasses increased international marketing efforts in exciting new emerging markets like Singapore, Vietnam, and the Philippines.

Volatility of U.S. pork and beef exports to Singapore
Source: USMEF
Market share of Singapore’s pork imports.
Source: Agri-Food and Veterinary Authority of Singapore
U.S. pork beginning to regain market share in Singapore. Source: Agri-Food and Veterinary Authority of Singapore

Overview of Singapore

Singapore, a small island city-state located off the southern shores of Malaysia, is home to the world’s largest logistics hub along with the world’s third largest financial center and the second largest casino. As a major commerce, finance, and transportation hub, Singapore has a highly developed market, open economy. It is also strategically located in the middle of the Asian trade routes and re-exports 60-75 percent of its total imports. Singapore is home to over 5.6 million people with a per capita GDP of $61,766, larger than the U.S per capita GDP. As Singapore’s financial and gambling sectors continue to grow, the demand for imported food products, specifically animal protein, will as well. U.S. agricultural exports to Singapore increased by 199 percent in the last decade, and continue to grow year-over-year, making it an important market for U.S. pork. In 2017, the U.S. exported 11.4 million pounds of pork to Singapore, a 34 percent increase from 2016.

According to the USDA, in 2017, U.S. agriculture exports to Singapore totaled $820 million, making it the 26th largest market.
Source: USDA

Animal Protein Consumption

Pork has historically ranked third among animal protein per capita consumption in Singapore, behind chicken and seafood. Though pork consumption in Singapore has remained relatively steady over the last ten years, a slight increase in per capita pork consumption over the last few years has put it on par with seafood consumption. Simultaneously, per capita consumption of chicken has marginally declined since 2016. As almost all Singapore households are of Asian decent, imported foods most frequently prepared must readily lend themselves to Asian cuisines and preparations. Popular dishes tend to be stir-fried or steamed and prepared in curries or marinated in sauces; pork tends to work well in such cuisines, contributing to its increase in popularity.

Animal protein consumption continues.
Source: Agri-Food and Veterinary Authority of Singapore

Domestic Industry

Singapore is hugely dependent on food imports because it has virtually no local agricultural production. Specifically, in 2017 the domestic agriculture sector contributes less than 1 percent of the country’s GDP per capita and 0.119 percent of the labor force. Therefore, there are no import tariffs or excise taxes on imported food and beverages, except alcoholic beverages and tobacco and a 7 percent Goods and Services Tax (GST) levied at the point of distribution. In 2017, Singapore imported $13 billion worth of agriculture, fish and forestry products. The United States was the fourth largest agricultural exporter to Singapore with a market share of eight percent valued at US$1 billion. Malaysia, Indonesia and China are the top three supplying countries in descending order.

Singapore’s local food production has grown steadily in the last 10 years.
Source: Agri-Food and Veterinary Authority of Singapore

Retail Sector

Singapore’s retail sector is highly developed, and dominated by three key players (See Table 1), with total sales in 2016 reaching $6 billion. Consumer convenience is the key and preferences tend towards modern grocery retailers, such as supermarkets and hypermarkets in particular. Such stores offer one-stop shopping for consumers and increased benefits: clean, comfortable, and air-conditioned environments, extended store hours, wider product ranges, accept different payment options, and maintain loyalty programs and promotional offerings. Traditional grocery retailers such as wet markets and independent small grocers are losing their market share due to strong competition from modern grocery retailing. However, there are some, especially older consumers, who perceive food products from wet markets as fresher than products from supermarkets. With increased USMEF investment in Singapore and the ASEAN region, market strategy centers around the education of various stakeholders on the quality, consistency, and profitability of U.S. pork, displacing competitor product, and increasing local consumption and acceptance of pork.

Singapore’s top three retailers
Source: USDA Gain Report

Trade Barriers

Currently, the U.S. can only export pork that is frozen, heat treated or processed in accordance with former U.S. requirements to mitigate trichinae. Singapore does not currently accept PQA Plus or any alternative program as a certification for exporting non-trichinae mitigated pork products. In addition, Singapore imposes shelf-life restrictions on frozen and chilled pork, specifically: chilled pork is rejected for export if it enters Singapore more than one week after production date. Frozen pork is rejected for export if it enters Singapore more than six months after production, and frozen pork that enters Singapore between three and six months from production is subject to automatic laboratory testing detention. Singapore also employs a zero-tolerance standard for Salmonella contamination on the surface of chilled and frozen pork muscle cuts, although this is not consistently enforced. Lastly, restrictions on pathogen reduction treatments (PRTs) allowed to be used as a food safety intervention on the surface of all red meat carcasses and cuts exist. There are only nine PRTs approved for use on red meat products; however, all of the nine that are approved cover the primary PRTs used in the pork industry.

Looking Ahead

The U.S. currently holds a five percent market share in the pork and pork products sector, and thus has vast opportunity to increase market share. Singapore’s dependency on imported agricultural and food products coupled with zero import tariffs and a demand for high-quality products make it a strategic trade partner for the U.S. in Southeast Asia. Because pork is a major protein food staple, Singapore is an attractive market with good prospects in high-end outlets where consumers are willing to pay premium prices for higher quality. Singaporeans generally perceive “Made in USA” and its brand-owners as quality suppliers of food and drink products. Thus, a tremendous opportunity exists for U.S. pork to gain market share in Singapore, especially as our strategic partners continue to work to remove existing trade barriers.