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Scan of new and emerging agricultural industry opportunities and market scoping

by Colin Decker and Bettina Kurnik October 2018

Scan of new and emerging agricultural industry opportunities and market scoping A custom report compiled by Euromonitor International

by Colin Decker and Bettina Kurnik

January 2018

AgriFutures Australia Publication No 18/040 AgriFutures Australia Project No. PRJ-010938

ISBN 978-1-76053-007-5 ISSN 1440-6845

Scan of new and emerging agricultural industry opportunities and market scoping Publication No. 18/040 Project No. PRJ-010938

The information contained in this publication is intended for general use to assist public knowledge and discussion and to help improve the development of sustainable regions. You must not rely on any information contained in this publication without taking specialist advice relevant to your particular circumstances.

While reasonable care has been taken in preparing this publication to ensure that information is true and correct, the Commonwealth of Australia gives no assurance as to the accuracy of any information in this publication.

The Commonwealth of Australia, AgriFutures Australia, the authors or contributors expressly disclaim, to the maximum extent permitted by law, all responsibility and liability to any person, arising directly or indirectly from any act or omission, or for any consequences of any such act or omission, made in reliance on the contents of this publication, whether or not caused by any negligence on the part of the Commonwealth of Australia, AgriFutures Australia, the authors or contributors.

The Commonwealth of Australia does not necessarily endorse the views in this publication.

This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, all other rights are reserved. However, wide dissemination is encouraged. Requests and inquiries concerning reproduction and rights should be addressed to AgriFutures Australia Communications Team on 02 6923 6900.

Researcher Contact Details

Colin Decker, Euromonitor International Address: 224 S. Michigan Ave, Suite 1500, Chicago, IL, 60654, United States

Phone: 1-312-922-1115 Email: [email protected]

In submitting this report, the researcher has agreed to AgriFutures Australia publishing this material in its edited form.

AgriFutures Australia Contact Details

Building 007, Tooma Way Charles Sturt University Locked Bag 588 Wagga Wagga NSW 2650

Phone : 02 6923 6900 Email : [email protected] www.agrifutures.com.au

Electronically published by AgriFutures Australia in October 2018.

AgriFutures Australia is the new trading name for Rural Industries Research & Development Corporation (RIRDC), a statutory authority of the Federal Government established by the Primary Industries Research and Development Act 1989.

Foreword

This work scanned the world for Emerging Industry opportunities for Australian farmers. The approach to this scan focused on consumer trends as the driver of these value chains. Euromonitor as a global market research firm brings unique insight to this task.

Farmers, emerging leaders, and new industry champions can use this report. It can provide input into designing strategies and investments to target success in these marketplaces. These insights aim to build confidence for investors in Emerging Industries.

The priority value chains identified are:

 premium chocolate  sesame  turmeric  snails  tiger nuts  moringa  wasabi  edible insects  Chinese jujube  medicinal mushrooms.

Market scoping was completed in more detail for these priorities.

This report is an addition to AgriFutures Australia’s diverse range of over 2,000 research publications and it forms part of our Emerging Industries arena, which aims to support the early-stage establishment of high potential rural industries.

Most of AgriFutures Australia’s publications are available for viewing, free downloading or purchasing online at www.agrifutures.com.au.

John Harvey Managing Director AgriFutures Australia

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About the Author

Established in 1972, Euromonitor is a global research organisation with over 1,200 full-time staff based in 15 regional offices and more than 1,000 field-based analysts in over 100 countries worldwide, researching and tracking consumer, industrial, services and B2B markets. It is independent and privately owned.

Euromonitor’s objective is to build on its position as the leading provider of quality international market intelligence and business information services. Our policy of continuous innovation, new product development, bespoke research services and embracing new technologies ensures we remain at the cutting edge of information solutions.

The information that Euromonitor provides is used by clients to prioritise markets and evaluate opportunities. Our syndicated research covers 32 industries, such as packaged food, beverages, ingredients, personal care, and health and wellness. Our custom research team allows us to leverage our research infrastructure in 100 countries to provide additional information and analysis, particularly where no established sources exist.

We have delivered more than 10,000 bespoke research projects to our clients since 1998, including several hundred that have used a methodology similar to that which we proposed to AgriFutures Australia.

This research study was managed by Colin Decker, Consulting Manager for Euromonitor. His project background covers a wide range of industries, from government to retail, food service, health and beauty, and fast-moving consumer goods. He is also experienced in product claims and investor service.

Contents

Foreword ...... iii About the Author ...... iv Executive Summary ...... x Introduction ...... 1 Objectives ...... 2 Methodology ...... 3 Chapters ...... 4 1. Premium Chocolate ...... 4 2. Sesame ...... 25 3. Turmeric ...... 46 4. Snails ...... 59 5. Tiger Nuts ...... 75 6. Moringa ...... 86 7. Wasabi ...... 98 8. Edible Insects ...... 109 9. Jujube ...... 130 10. Medicinal Mushrooms ...... 144 Appendix ...... 159 References ...... 177

Tables

Table 1: US Food and Drug Administration (FDA) naming and ingredients of cocoa products 4 Table 2: EU naming and ingredients of cocoa products ...... 4 Table 3: World production of cocoa beans, 2014/15–2016/17 (’000 tonnes) ...... 9 Table 4: World production, grindings and stock of cocoa beans, 2011/12–2016/17 (’000 tonnes) ...... 9 Table 5: Countries whose production and share of exports are classified as fine and flavour cocoa in 2016 ...... 11 Table 6: Average price of cocoa beans per month in US$/tonne, 2017...... 12 Table 7: Global chocolate confectionery production by volume and value, 2015–2022 ...... 13 Table 8: Top 10 global confectionery companies by net sales in 2016 (US$ million) ...... 14 Table 9: Top importers of cocoa beans by value and quantity in 2016 ...... 16 Table 10: Top importers of cocoa and cocoa preparations by value and quantity in 2016 .... 17 Table 11: Top exporters of cocoa beans by value and quantity in 2016 ...... 18 Table 12: Top exporters of cocoa and cocoa preparations by value in 2016 ...... 19 Table 13: EU regulations regarding cadmium in cocoa and cocoa-derived products, effective 1 January 2019 ...... 21 Table 14: Average sesame production by top 10 countries, 2001–16 (tonnes) ...... 32 Table 15: Annual production from top producers, 2010–16 (tonnes) ...... 32 Table 16: Sesame seed oil retail prices ...... 33 Table 17: Organic sesame seed oil retail prices ...... 34 Table 18: Largest exporters of sesame products (seed, oil and cake), 2011–13 (tonnes) ..... 34 Table 19: Sesamum seeds export data by value and volume, 2016 ...... 35 Table 20: Sesame seed oil (refined and unrefined) export data by value and volume, 2016 . 36 Table 21: Sesamum seed import data by value and volume, 2016 ...... 37 Table 22: Sesame seed oil (refined and unrefined) import data by value and volume, 2016 . 38 Table 23: US retail sales of organic oils and fats in 2017 (US$ million) ...... 43 Table 24: Global edible oil production by volume and value, 2015–22 ...... 44 Table 25: Turmeric production in India by area and volume, 2012/13–2016/17 ...... 49 Table 26: India’s exports of turmeric by volume and value, 2012/13–2016/17 ...... 51 Table 27: Retail prices of turmeric powder ...... 51 Table 28: Global turmeric exports by value and volume, 2016 ...... 52 Table 29: Turmeric importers by value and volume, 2016...... 53 Table 30: Snail consumption by country, 2016 ...... 65 Table 31: Australia’s import and export of snails by countries and value, 2016 ...... 66 Table 32: Retail market prices ...... 67 Table 33: Global consumption of snails by market segment, 2016 (tonnes) ...... 67 Table 34: Global consumption of snails by country, 2016 (tonnes) ...... 68 Table 35: Snail-exporting countries by value and volume, 2016 ...... 69 Table 36: Snail-importing countries by value and volume, 2016 ...... 70 Table 37: Nutritional values of snail meat compared to the meat of other animals ...... 71 Table 38: Mineral and vitamin content of tiger nuts (mg/100g) ...... 79 Table 39: Area dedicated to the production of tiger nuts in Valencia (square metres) ...... 79 Table 40: Retail market prices ...... 80 Table 41: US sales of non-dairy beverages by volume (gallons)...... 82 Table 42: World gluten-free product sales ...... 84 Table 43: Retail prices ...... 93 Table 44: Japanese wasabi production, 2011 ...... 102 Table 45: Price of wasabi ...... 104 Table 46: Trading channels for wasabi ...... 106 Table 47: Mealworm production times ...... 114 Table 49: Wholesale prices in Thailand for various insects ...... 118 Table 50: Imports of live insects (excluding bees) by value and volume, 2016 ...... 121 Table 51: Imports of live bees by value and volume, 2016...... 122

Table 52: Export of live insects (excluding bees) by value and volume, 2016 ...... 123 Table 53: Export of live bees by value and volume, 2016 ...... 124 Table 54: National production data of Chinese jujube, 2011–15 (million tonnes) ...... 135 Table 55: Production of jujube in India, 2014–15 ...... 136 Table 56: Fresh jujube retail market prices, 2017 ...... 137 Table 57: Chinese jujube domestic market prices, 28 September 2017 (yuan/kg) ...... 138 Table 58: Global harvest area and production of edible mushrooms, 2014–16 ...... 149 Table 59: Top six cultivated varieties of mushroom in China, 2007–11 (’000 tons) ...... 149 Table 60: Australian harvest area and production of mushrooms, 2014–16 ...... 149 Table 61: Top 10 importers of Agaricus mushroom by value and volume, 2016 ...... 152 Table 62: Top 10 importers of mushrooms and truffles other than Agaricus by value and volume, 2016 ...... 153 Table 63: Top 10 exporters of Agaricus mushroom by value and volume, 2016 ...... 154 Table 64: Top 10 exporters of edible mushrooms and truffles (excluding Agaricus) by value and volume, 2016 ...... 155 Table 65: Euromonitor health and wellness forecasts ...... 158

Figures

Figure 1: Beans inside a criollo pod ...... 8 Figure 2: Trinitario pods Figure 3: Criollo pods ...... 8 Figure 4: Cocoa production, 2007/08–2016/17 ...... 10 Figure 5: Worldwide production of fine cocoa beans by continent, 2008–15 (’000 tonnes) ... 10 Figure 6: Average price of cocoa beans per month in US$/tonne, 2017 ...... 12 Figure 7: Consumer prices for fine cocoa products in Europe in 2016 ...... 13 Figure 8: Standard boxed assortments – brand performance by price platform 2010–15 ..... 14 Figure 9: Confectionary – putting Asia Pacific in context, 2012–17 ...... 15 Figure 10: The value of imports of cocoa beans by country in 2016 (US$000) ...... 16 Figure 11: The value of imports of cocoa and cocoa preparations by country in 2016 (US$000) ...... 17 Figure 12: The value of exports of cocoa beans by country in 2016 (US$000) ...... 18 Figure 13: The value of exports of cocoa and cocoa preparations by country in 2016 (US$000) ...... 19 Figure 14: Stakeholders in the trading channel for cocoa ...... 22 Figure 15: UTZ-certified sales, 2010–16 (tonnes) ...... 24 Figure 16: The sesame plant ...... 25 Figure 17: Sesamum indicum (left) and Sesamum radiatum (right) ...... 25 Figure 18: The US Department of Agriculture nutrient profile on sesame oil ...... 28 Figure 19: Global production and yield of sesame seed, 2001–16 (tonnes/hectares) ...... 30 Figure 20: Countries that currently produce sesame ...... 31 Figure 21: Production share of sesame seed by region, 2001–16 ...... 33 Figure 22: Sesamum seed exporters by value, 2016 (US$000) ...... 35 Figure 23: Sesame seed oil exporters by value, 2016 (US$000) ...... 36 Figure 24: Sesamum seed importers by value, 2016 (US$000) ...... 37 Figure 25: Sesame oil importers by value, 2016 (US$000) ...... 38 Figure 26: Total imports of sesame oil to Europe, 2011–15 (tonnes) ...... 40 Figure 27: An example of trade channels for sesame oil – here, in Germany ...... 42 Figure 28: Global consumption of edible vegetable oils, 2013–17 (million tonnes) ...... 44 Figure 29: Turmeric plant and flower ...... 46 Figure 30: Turmeric Rhizome ...... 46 Figure 31: USDA nutrient database for ground turmeric ...... 48 Figure 32: Major spice-producing states in India by area and production volume ...... 50 Figure 33: Markets supplying turmeric to Australia by value (US$000) ...... 51 Figure 34: Turmeric exporters by value, 2016 (US$000) ...... 53

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Figure 35: The top European importers of turmeric (Curcuma longa), 2011–15 (’000 tonnes) ...... 54 Figure 36: The market channels for turmeric (Curcuma longa) for health uses ...... 56 Figure 37: Cornu aspersum ...... 59 Figure 38: Helix pomatia ...... 59 Figure 39: Otala lactea ...... 60 Figure 40: Iberus alonensis ...... 60 Figure 41: Capaea nemoralis ...... 60 Figure 42: Capaea hortensis ...... 60 Figure 43: Otala punctata ...... 61 Figure 44: Eobania vermiculata ...... 61 Figure 45: Helix lucorum ...... 61 Figure 46: Helix aperta ...... 61 Figure 47: Theba pisana ...... 62 Figure 48: Sphincterochila candidissima ...... 62 Figure 49: Achatina fulica ...... 62 Figure 50: Snail-exporting countries by value, 2016 (US$000) ...... 69 Figure 51: Snail-importing countries by value, 2016 ...... 70 Figure 52: The main industry segments for snails and snail products in the US ...... 73 Figure 53: Tiger nuts plant ...... 75 Figure 54: Nutritional profile of tiger nuts compared to beef, potatoes and beef liver ...... 76 Figure 55: Nutritional content of tiger nuts compared to potato and sweet potato ...... 76 Figure 56: Fat content of tiger nuts compared to ground beef ...... 76 Figure 57: Nutritional profile for raw tiger nuts ...... 78 Figure 58: Mineral profile for raw tiger nuts ...... 78 Figure 59: The moringa tree, its flowers and leaf structure ...... 87 Figure 60: Moringa seed pods ...... 87 Figure 61: USDA nutritional profile of moringa leaves ...... 88 Figure 62: Moringa seeds ...... 89 Figure 63: Moringa-producing nations ...... 92 Figure 64: India’s export markets for moringa by value and volume, Jan. 2014 – Dec. 2016 93 Figure 65: India’s export markets for moringa leaf by value and volume, Jan. 2014 – Dec. 2016 ...... 94 Figure 66: The trading channel for a moringa leaf originating in Africa and sold in Europe ... 96 Figure 67: Wasabi plant ...... 98 Figure 68: Mazuma wasabi ...... 98 Figure 69: Daruma and mazuma wasabi ...... 98 Figure 70: Wasabi rhizome (left) and wasabi flowers ...... 99 Figure 71: Wasabi nutritional profile ...... 100 Figure 72: World protein production, 2016/17 (million tonnes) ...... 110 Figure 73: Percentage of animal that is edible and feed required per kilogram of weight .... 111 Figure 74: Global compound animal feed production, 2016 (tonnes) ...... 112 Figure 75: Thailand edible insect markets ...... 116 Figure 76: The most commonly consumed bugs in Thailand and their source ...... 120 Figure 77: The main live insect-importing countries (excluding bees) by value, 2016 (US$000) ...... 121 Figure 78: The main live bee-importing countries by value, 2016 (US$000) ...... 122 Figure 79: The main exporting countries for live insects (excluding bees) by value, 2016 (US$000) ...... 123 Figure 80: The main exporting countries for live bees by value, 2016 (US$000) ...... 124 Figure 82: Chinese jujube ...... 131 Figure 83: The nutritional profile for raw jujubes ...... 132 Figure 84: The cultivation areas and major production areas of jujube in China ...... 135 Figure 85: Pathway for imports of fresh jujube from China into continental US ...... 141

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Figure 86: Growth of the Chinese pharmaceutical industry in China, 2011–15, 2016–20 (yuan bn) ...... 143 Figure 87: Comparison of antioxidant levels ...... 146 Figure 88: Life cycle of a mushroom ...... 147 Figure 89: Australian mushroom industry size and production distribution by state, and supply chain and value, 2014/15 ...... 150 Figure 90: Top importers of the Aqaricus mushroom by value, 2016 (US$000) ...... 151 Figure 91: Top importers of edible mushrooms and truffles (excluding Agaricus) by value, 2016 (US$000) ...... 152 Figure 92: Top exporters of Agaricus mushrooms by value, 2016 (US$000) ...... 153 Figure 93: Top exporters of edible mushrooms and truffles (excluding Agaricus) by value, 2016 (US$000) ...... 154 Figure 94: Example of mushroom trading channel ...... 156 Figure 95: Growth of the Chinese pharmaceutical industry in China, 2011–15, 2016–20 (yuan bn) ...... 158

Executive Summary

What the report is about

As part of its New Plant and Animal Opportunities Feasibility program, AgriFutures Australia (AgriFutures) intended to develop a report that identifies industry opportunities for expansion and growth. The project would be based on reviews and analysis of the data and reports Euromonitor publishes to identify trends, applications, geographies, and other areas in which the industries may have small or significant growth opportunities.

Who is the report targeted at?

This report has been written for and is targeted at the entire AgriFutures organisation.

Background

AgriFutures invests in research and development to assist rural industries to be productive, profitable and sustainable, and conducts research and identifies opportunities to support such industries’ progression through the industry life cycle. One example was uncovering the strong demand for turmeric in the global market and developing that industry in Australia. AgriFutures would like to find more opportunities such as this for other industries it supports, and working with a third party that has access to information on global markets and trends will provide a more streamlined approach to finding spaces for its industries to progress through the life cycle.

Aims/objectives

The report provided by Euromonitor would be used by AgriFutures to prioritise growth opportunities and determine additional research and other support the industries would need to exploit the identified opportunities.

The objective of the project is to identify opportunities for new AgriFutures industries and products. Opportunities will be defined as:

• local or global trends impacting the potential for demand of an industry’s output • applications and/or downstream industries into which an industry’s output could be supplied • country markets and/or consumer segments showing strong potential demand for an industry’s output • other opportunities determined by Euromonitor.

Methods used

After a preliminary global scan was conducted by Euromonitor for an initial list of seemingly high-potential industries, AgriFutures narrowed the list to 10 industries to be researched in detail for this report. As the agreed approach to this study, desk research primarily centred on internet sources for the necessary information to identify the growth potential of the short- listed industries.

Metrics used to assess the opportunity of the industries included a quantitative and qualitative analysis of supply (identifying current sources of origin), demand (identifying current consumer, commercial or industrial markets), value (current size of the market), and potential (future size of the market).

Results/key findings

The research showed that of the 10 short-listed industries – premium chocolate, sesame, turmeric, snails, tiger nuts, moringa, wasabi, edible insects, Chinese jujube and medicinal mushrooms – some had greater potential for Australia than others. For example, turmeric is not a fad as it can be used in a variety of applications and it is in high demand in the food industry in high population regions; however, tiger nuts could be a fad.

Implications for relevant stakeholders

Players involved in the peripheral industries within each ingredient may find this report useful in providing a global perspective on their consumer markets and competitors. Policymakers that govern the regulations on importation and quarantines may be interested in knowing about the potential of products that are not yet present in Australia, the introduction of which may prove more beneficial than detrimental to domestic ecosystems and the regional or national economies.

Recommendations

Following this study, the list of 10 industries is to be narrowed further, weeding out the industries that would appear to be of little interest of potential for Australia.

Recommendations for each industry are listed after each chapter. Where further research is needed, Euromonitor has identified the kind of information that may be useful to gather in the next phase, such as the technical aspects of production and the economic implications of introducing the new industry.

Introduction

AgriFutures Australia (AgriFutures) has developed a report that identifies new products and industry opportunities for expansion and growth. The project is based on desk research to identify applications, geographies, and other areas in which the industries may have small or significant growth opportunities. This report examines not only the quantitative demand and supply factors of each of the industries discussed, but also the qualitative trends that would indicate their potential growth.

The report by Euromonitor International (Euromonitor or EMI) could be used by AgriFutures to prioritise these opportunities and determine if additional research and other support are needed to exploit the identified opportunities.

Opportunities will be defined as:

• current demand for an industry on a local or global scale. A commodity or industry currently exhibiting a high demand from consumers and high return for producers and suppliers may prove reason enough for Australia to enter the industry, provided it shows signs of maintaining a sustainable demand in the future. • local or global trends impacting the potential for demand of an industry’s output. Where applicable, growth potential is assessed from a macro and long-term point of view, given the dynamics of today’s trading and consuming markets. Purchasing habits of consumers, ongoing research, and any environmental or economic factors are examined. • applications and/or downstream industries into which an industry’s output could be supplied. As new uses and applications are discovered for some of these products and industries, demand for an industry or ingredient may continue to rise, particularly if they move from being niche products to developing more global or mass market applications. • country markets and/or consumer segments showing strong potential demand for an industry’s output. Tying in with current and future trends of these industries, consumer demand is assessed on a macro as well as micro level, and, where possible or applicable, potential new end users are identified for the industry. • other opportunities determined by Euromonitor. This includes assessing Australia’s own competitive advantage compared to existing suppliers in the industry.

Objectives

The objective of the project is to identify opportunities for new agricultural industries and products. Opportunities will be defined as:

Methodology

The first phase of the study involved a global scan of potential products or ingredients to be researched in greater detail for the report. Products or ingredients considered high value or high potential in one or more markets were chosen. Euromonitor came up with a list of nearly 50 products, which was short-listed to 10 by AgriFutures. The initial list of products was obtained through a combination of interviews and desk research.

Euromonitor then conducted desk research, primarily by internet, for the identified industries in their respective markets. This involved searching reliable sources of online information, such as trade, government and corporate websites; compendiums; news articles; and published studies.

Where possible, actual and recent quantitative data was obtained for the volume and value produced, traded and consumed for each ingredient. If this was not available, qualitative assessment of the trends affecting each industry is included to present a picture of its growth potential.

An analysis of each industry opportunity was then prepared, using:

• an overview of the product – what it is, where current supply comes from • a description of demand factors and possible drivers of future demand • major and/or interesting uses/applications for the industry • trends related to the industry • potential opportunities and/or threats • perceptions of the industry.

This report is an overview of the 10 industries identified, not an exhaustive coverage of all each industry’s singularities. More in-depth research would be required for industries that show potential for development in Australia.

Chapters 1. Premium Chocolate

10.1. Introduction

Theobroma cacao, also called the cacao tree or cocoa tree, is native to the deep tropical regions of Central and South America. Its seeds, cocoa beans, are used to make cocoa mass, cocoa powder, confectionery, ganache, and chocolate. A perennial tree, cocoa is grown in tropical regions and has an economic life of 25 to 30 years.

There are several types of chocolate, classified according to the proportion of cocoa used in a particular formulation. Several countries have their own regulations on how chocolates can be classified. For example, Tables 1 and 2 list the United States (US) and European Union (EU) requirements.

Table 1: US Food and Drug Administration (FDA) naming and ingredients of cocoa products Product Chocolate Milk Sugar Cocoa Milk Fat Liquor Solids Fat Milk Chocolate ≥ 10% ≥ 12% Sweet Chocolate ≥ 15% < 12% Semisweet or Bittersweet ≥ 35% < 12% (Dark) Chocolate White Chocolate ≥ 14% ≤ 55% ≥ 20% ≥ 3.5% Source: US FDA

Table 2: EU naming and ingredients of cocoa products Product Total Cocoa Non-Fat Total Milk Fat Milk Flour/ Dry Butter Cocoa Fat Solids Starch Cocoa Solids Solids Chocolate ≥ 35% ≥ 18% ≥ 14% Couverture ≥ 35% ≥ 31% ≥ 2.5% Chocolate Chocolate ≥ 32% ≥ 12% ≥ 14% Vermicelli or Flakes Milk ≥ 25% ≥ 2.5% ≥ 25% ≥ 3.5% ≥ 14% Chocolate Couverture ≥ 25% ≥ 2.5% ≥ 31% ≥ 3.5% ≥ 14% Milk Chocolate Milk ≥ 20% ≥ 2.5% ≥ 12% ≥ 3.5% ≥ 12% Chocolate Vermicelli or Flakes Family Milk ≥ 20% ≥ 2.5% ≥ 25% ≥ 5% ≥ 20% Chocolate Cream ≥ 25% ≥ 2.5% ≥ 25% ≥ 5.5% ≥ 14% Chocolate

Skimmed ≥ 25% ≥ 2.5% ≥ 25% ≤ 1% ≥ 14% Milk Chocolate White ≥ 20% ≥ 14% Chocolate Chocolate a ≥ 35% ≥ 18% ≥ 14% ≤ 8% la Taza Chocolate ≥ 30% ≥ 18% ≥ 12% ≤ 18% Familiar a la Taza ‘Total Fat’ refers to the combined cocoa butter and milk fat content. ‘Total Dry Cocoa Solids’ refers to combined cocoa powder and butter. Source: EC of the European Parliament

Most regulatory authorities have avoided defining the market in terms of premium and regular/everyday chocolate. Most of the US industry follows the National Confectioners Association (NCA) definition for premium chocolate: as being at least US$11 per pound (0.45 kilogram) or more (retail), disregarding items that make this minimum price due to design or novelty value rather than the product itself.

Premium chocolate is not just chocolate sold at a higher price point. At its core, successful premium chocolate must create greater value for the consumer than other chocolate, through a premium experience driven by the quality of taste and texture, packaging, image and perception, and communication (Thomas, 2011). In many cases, premium chocolate is defined as chocolate derived from fine cocoa vs bulk cocoa.

Premium chocolate is currently driving innovation and sales and, in many countries including the US, sales are growing faster than for regular chocolate.

10.2. Product overview

10.2.1. Uses and applications

Cocoa is a rich source of antioxidants such as procyanidins and flavonoids, which are known to possess anti-aging properties. Cocoa also contains epicatechin, a compound that has been scientifically proven to be beneficial to cardiovascular health. However, any benefit to cardiovascular health refers to raw and not dark chocolate as the compounds tend to degrade during processing. Cocoa is also a stimulant and contains theobromine and caffeine. Compared to coffee beans, the caffeine content is low and generally ranges between 0.1% and 0.7%. Excessive consumption of large quantities of chocolate, without a corresponding increase in activity, can increase the risk of weight gain and possibly obesity. Chocolate and cocoa contain moderate to high amounts of oxalate, which may increase the risk of developing kidney stones.

One of the components found in dark chocolate is theobromine. When consumed in larger amounts, theobromine can cause a dip in blood pressure, excitability, and give energy. Another chemical found in chocolate is anandamide. Anandamide can boost mood and energy without the addiction and cardiovascular damage that comes with other stimulating substances. Several scientific research studies over the years have proven dark chocolate to improve health in a multitude of ways – it improves cognitive functioning, reduces the risk of pre-eclampsia, lowers blood pressure and cholesterol, prevents sun damage on the skin, and even improves blood flow to the fetus.

Like all industries, the chocolate industry is currently focused on “clean label” products, which are those that contain natural, familiar and simple ingredients in response to a consumer-led shift away from artificial ingredients or synthetic chemicals. This is especially prevalent in the premium chocolate industry, where innovations in dark chocolate have included single-origin labelling and the inclusion of other healthy ingredients such as raspberry and blueberry. Dark chocolate contains antioxidants, such as polyphenols, and is relatively low in sugar. It has a reputation as a healthier alternative to other types of chocolate, such as milk chocolate.

In terms of its end market, cocoa is used in four key industries:

• Confectionery • Food and food service • Beauty and cosmetics • Nutraceutical.

The confectionery industry accounts for over two-thirds of all cocoa production through the manufacturing of produce chocolate and other confectionery products. Fine cocoa is used only in this end market.

The food industry utilises cocoa powder as an ingredient in beverages, desserts, spreads, sauces and condiments.

The cosmetics industry is a small end market and primarily uses cocoa in the form of cocoa butter in products such as creams and soaps.

In the last few years, as research on chocolate, particularly premium chocolate, deemed it a superfood, there has also been interest from the health and wellness sector. Cocoa-based supplements are sold over the counter as herbal/nutraceutical products in many countries.

10.2.2. Issues/challenges facing the product

Health-conscious customers across the world are cutting back on sugary products. Cocoa prices are very erratic, but they have declined significantly in the last year due to excess supply.

While organic chocolate is a key differentiator and growth factor in the chocolate market, there are a few challenges in this segment, the most important being smaller yields. Farmers who use pesticides and fertilisers have a higher yield than organic farmers: generally, 750 kg–1500 kg/hectare vs 500 kg/ha.

Fine cocoa, which is the key to the production of premium chocolate products, is not very productive from the farmer’s viewpoint in terms of the price it fetches, its susceptibility to diseases and pests, and its costs, as the yield per tree is low compared to the forastero variety of cocoa/cacao beans.

10.2.3. Supply

Production and cultivation

Cocoa trees, which are cultivated in many tropical locations, are small, understorey trees that need rich, well-drained soils. They grow naturally within 20 degrees either side of the equator because they need about 2000 mm of rainfall a year and temperatures in the range of 21– 32°C. Cocoa trees cannot tolerate a temperature lower than 15°C. Two methods are used to establish cocoa tree plantations: young trees are interspersed with new permanent or temporary shade trees such as coconut, plantains, and bananas following the clear-felling of the forest; or forest trees are thinned out and cocoa trees are planted between the

established trees. Although the cocoa plant needs fertile and coarse-textured soil, it can thrive in most soil types. The optimum soil needs a pH of 5–7.5.

Cocoa trees begin to bear fruit when they are three to four years old. A single tree can yield about 20 to 30 pods a year and on average it takes a year’s crop from one tree to make about 450 grams of chocolate. Cocoa pods grow from the trunk of the tree and the main branches. In general, only a small portion of the flowers develop into fruits.

Once ripened, the pods change colour from green or red to yellow or orange. Only the ripe pods are harvested. Unripe pods have a low content of cocoa butter or sugar, which directly affects fermentation, and thus the end product. Cocoa harvesting is a labour-intensive process. The pods are split open by hand and the seeds or beans, which are covered with a sweet white pulp or mucilage, are removed ready to undergo the two-part curing process – fermentation and drying. The processing of raw cocoa beans into cocoa mass involves a number of steps. Before arriving at the factory, the raw cocoa beans are fermented and dried; while during transportation, the first quality control takes place at the port.

Cocoa beans are generally dried in the sun. Any presence of moisture directly affects the quality of the bean. While there is machinery available to dry cocoa beans in times of rain, the sun is the preferred mode. However, new micro solar-drying processes are marketed as being as good as sunshine as they dry the beans consistently and evenly. In some countries in the West Indies and South America, drying takes place on wooden drying floors with movable roofs. The beans are normally turned or raked to ensure uniformity of drying, and they need to be covered when it rains. Other commonly used artificial dryers include convection or Samoan dryers, platform dryers using heat exchanges, and conduction dryers. On arrival at the processing factory, the beans undergo another thorough inspection before being cleaned, mixed into the desired blend, fragmented, and stripped of their husks.

The cocoa nib is the inner part of the kernel that is left over after the fermentation process. Cocoa nibs are heat-treated to eliminate possible bacteria and then roasted and ground into a liquid cocoa mass. The nibs are alkalised before, during, or after the roasting process. This determines the colour and taste of the cocoa mass, which, as an intermediate or semi- finished product, is supplied to the chocolate industry and is also the basis for the production of cocoa powder and cocoa butter (European Cocoa Association).

Chocolate is made from cocoa mass, with sugar, cocoa butter and, optionally, milk added. The resulting mixture is rolled and conched. During conching, the chocolate is kept in continuous movement to allow the cocoa mass to thicken and develop into a homogeneous substance. This process results in a better aroma as it allows volatile acids to escape. Conching takes several hours and, depending on the end taste required, other ingredients may be added. Once the hot chocolate mass is cool, it can be poured into any desired form and hardened. This process, called tempering, is important for the correct crystallisation. During tempering the volume is reduced, allowing the chocolate to automatically come out of the mould. White chocolate undergoes a similar process but only contains sugar, milk, vanilla, and cocoa butter. Dark chocolate is made from cocoa butter instead of milk-based butter like milk chocolate and contains a higher percentage of cocoa. Government and industry standards of what products may be labelled dark chocolate vary by country and market.

There are three main varieties of cocoa/cacao beans used in chocolate – criollo, forastero, and trinitario. Criollo represents only 5% of all cocoa grown and is the rarest and most expensive cocoa on the market. It is native to Central America, the Caribbean islands, and the northern part of South America. Criollos are difficult to grow as the yield per tree is low and are vulnerable to a number of environmental threats, such as insects and extreme weather. The African cocoa crop is entirely of the forastero variety and is significantly hardier and of higher yield than criollo. Trinitario is a natural hybrid of criollo and forastero. Trinitario

originated in Trinidad after the introduction of forastero to the local criollo crop. Nearly all the cocoa produced over the past five decades is of the forastero or trinitario varieties.

Figure 1: Beans inside a criollo pod

Figure 2: Trinitario pods Figure 3: Criollo pods

Generally, fine/flavour cocoa beans are produced from criollo or trinitario cocoa tree varieties, while bulk cocoa beans come from forastero trees. An exception is the Ecuadorian forastero cacao Nacional, or ariba forastero, which is used as fine cacao. Another is cocoa beans from Cameroon that are produced by trinitario-type trees – although the cocoa powder has a distinct and sought-after red colour, the beans are classified as bulk. Most differences between fine cocoa and bulk relate to the flavour. Fine flavours include fruit (fresh and browned, mature fruits), floral, herbal, and wood notes, nut and caramel notes, and rich and balanced chocolate bases.

10.2.4. Global production

Africa accounts for the majority of global cocoa production. In 2016/17, over 75% of all production was in Africa, with more than 40% of production from Côte d’Ivoire. In 2016/17, cocoa bean production was up by 18%, which, unfortunately, resulted in oversupply and price reductions. Cocoa prices in 2016 were the lowest in four years. Table 3 shows the volume of cocoa bean production in the last three years and Table 4 shows world production, grindings and stock since 2011/12.

Table 3: World production of cocoa beans, 2014/15–2016/17 (’000 tonnes) Region 2014/15 2015/16 2016/17(forecast)

Africa 3,074 2,918 3,565 Cameroon 232 211 240 Côte d’Ivoire 1,796 1,581 2,010 Ghana 740 778 950 Nigeria 195 200 225 Others 111 148 140 America 777 666 757 Brazil 230 140 180 Ecuador 261 232 270 Others 286 294 307 Asia and Oceania 400 397 379 Indonesia 325 320 290 Papua New Guinea 36 36 40 Others 39 41 49 Total 4,251 3,981 4,701 Source: International Cocoa Organization (ICCO)

Table 4: World production, grindings and stock of cocoa beans, 2011/12–2016/17 (’000 tonnes) Crop Year Gross Crop Grindings Surplus/ Total End of Deficit Season Stock 2011/12 4,095 3,972 82 1,828 2012/13 3,943 4,180 -276 1,552 2013/14 4,370 4,335 -9 1,543 2014/15 4,251 4,154 54 1,597 2015/16 3,981 4,128 -187 1,410 2016/17(foreca 4,700 4,282 371 1,781 st) Source: ICCO

Figure 4 shows how the dynamics of cocoa production change annually based on production and grindings.

Figure 3: Cocoa production, 2007/08–2016/17

Fine flavour cocoa accounts for about 6% of the world’s cocoa production: approximately 300,000 tonnes in 2016 according to the International Cocoa Organization (ICCO). Most major chocolate manufacturers have premium quality chocolate products in their range, which require fine/flavour cocoa from specific regions to create the distinct taste or colour of their chocolate. Despite its small production, fine/flavour cocoa is the fastest growing segment of the cocoa and chocolate industry. Figure 5 shows the worldwide production of fine cocoa beans.

Figure 4: Worldwide production of fine cocoa beans by continent, 2008–15 (’000 tonnes)

Table 5 shows fine/flavour cocoa’s share of total exports in each exporting country in 2016. Countries regularly lobby the ICCO to showcase their product and get approval for their fine/flavour cocoa. Due to more countries gaining certification, production of fine and flavour cocoa is rising. In reality, overall production from criollo and trinitario is down and these varieties are also highly susceptible to pests compared to forastero varieties, resulting in increased plantations of forastero.

Table 5: Fine/flavour cocoa’s share of total exports in each exporting country in 2016 Countries Share of total exports of the country classified as fine and flavour cocoa Belize 50% Bolivia 100% Colombia 95% Costa Rica 100% Dominica 100% Dominican Republic 40% Ecuador 75% Grenada 100% Guatemala 50% Honduras 50% Indonesia 1% Jamaica 95% Madagascar 100% Mexico 100% Nicaragua 100% Panama 50% Papua New Guinea 90% Peru 75% Saint Lucia 100% São Tomé and Principé 35% Trinidad and Tobago 100% Venezuela 100% Vietnam 40% Source: ICCO

10.2.5. Current Australian landscape

Australian cocoa producers are located in North Queensland along the tropical coast from the Daintree region to south of Tully and focused around the towns of Mossman and Innisfail. The industry produces cocoa for boutique chocolate manufacturers through on-farm processing or by selling to aligned chocolatiers. Currently, production is on a small scale (Queensland Government). The chocolate industry in Australia is experiencing good growth with national luxury/artisan chocolatiers. However, Australian cocoa output is low. Much of the crop is a PNG-hybrid with a trinitario base. Because the crop is grown in cyclonic zones, farmers are experimenting with trellising, which could lead to long-term security of planting environments.

In 2017, the Australian chocolate confectionery industry grew 4% in current value terms, compared with 3% in 2016. This was largely driven by continued consumer demand for premium quality chocolate. Consumers continued to view chocolate confectionery as an indulgence, with health-conscious consumers choosing to moderate their chocolate intake or move to products with a higher cocoa content rather than change to other snacks. Mondelēz Australia held the leading value share within chocolate confectionery of 37%, a slight decline from 2016. The company experienced a gradual decline over the review period largely due to a decline in its mainstream chocolate brands as more premium positioned brands grew. In particular, Cadbury Dairy Milk, owned by Mondelēz Australia, declined steadily over the 2012-2017 historical review period and held a 10% value share in chocolate confectionery in

2017. Lindor, owned by Lindt & Sprüngli (Australia), continued to gain ground with a 5% value share. Darrell Lea, a domestic brand owned by Darrell Lea Chocolate Shops, also grew, with a 5% value share. Chocolate confectionery will post a 3% value compound annual growth rate (CAGR) during 2017-2022, similar to the 2% CAGR experienced over the historical review period, at constant 2017 prices (EMI Data, 2017).

10.2.6. Retail market prices

Consumer market prices for chocolate can be volatile, partly due to the highly volatile prices of cocoa beans. However, as Table 6 and Figure 6 show, cocoa bean prices were relatively stable for most of 2017

Table 6: Average price of cocoa beans per month in US$/tonne, 2017 Month Average Price (US$/tonne) Jan-17 2,195.85 Feb-17 2,034.08 Mar-17 2,057.80 Apr-17 1,961.16 May-17 1,983.48 Jun-17 1,998.25 Jul-17 1,988.58 Aug-17 1,988.56 Sep-17 1,998.30 Oct-17 2,097.06 Nov-17 2,127.90 Dec-17 1,917.60 Source: ICCO

Figure 5: Average price of cocoa beans per month in US$/tonne, 2017 Source: ICCO

In retail markets, prices for chocolate vary depending on the product. For example, in the US, 1 pound (0.45 kg) of Godiva dark premium chocolate costs US$25 and a 1 pound bar of regular Snickers can cost about US$10. In the fine cocoa wholesale market, prices can vary by product and country. Figure 7 shows the variation in consumer prices for fine cocoa products in Europe in 2016.

Figure 6: Consumer prices for fine cocoa products in Europe in 2016

Source: European Cocoa Association, CBI Europe 10.2.7. Illicit trade or other issues

One of the biggest issues that the cocoa industry faces today is the presence of child labour in many African countries. The industry is trying to curb this by adding certifications of child- labour free and other ethical standards, but research shows that child labour is still widely prevalent in this industry. A 2015 report by the US Department of Labor found that more than two million children were working in hazardous conditions in the cocoa industry in Ghana and Côte d’Ivoire.

10.2.8. Demand

Globally, consumption of chocolate was about 7 million tonnes in 2016. There was a drop in chocolate consumption from 2014 to 2016. However, the market is recovering slowly, primarily due to increased consumption of premium or dark chocolate as people slowly realise the benefits associated with fine cocoa/dark chocolate over bulk. Despite this, bulk chocolate still accounts for most sales. To offset volume falls in developed markets, as well as rising input costs, many in the chocolate industry have turned towards the premium segment to increase value and protect margins. Per capita, Western Europe is the biggest market for chocolate, led by Switzerland and the United Kingdom. The US has the largest chocolate bar market but is not the leading market for chocolate in per capita terms. Table 7 shows global chocolate confectionery production by volume and value.

Table 7: Global chocolate confectionery production by volume and value, 2015–2022 Chocolate 2015 2016 2017 2018 2019 2020 2021 2022 Confectionery

Volume 7,104.6 7,078.5 7,103.4 7,151.9 7,224.2 7,309.0 7,405.6 7,506.2 (’000 tonnes)

Value 95,503.1 98,720.5 102,510.1 103,890.9 105,529.9 107,353.5 109,333.7 111,397.9 (US$ million)

Source: EMI

Table 8 lists the top 10 global confectionery companies by sales. Mars Inc., the last of the top 10 companies to enter the premium chocolate segment, has strong sales in the bulk/ordinary chocolate segment, making it the top confectionery company in the world by value of sales.

Table 8: Top 10 global confectionery companies by net sales in 2016 (US$ million) Company Net Sales 2016 (US$ million) Mars Inc. (US) 18,000 Mondelēz International (US) 12,900 Ferrero Group (Luxembourg/Italy) 10,637 Meiji Co. Ltd (Japan) 9,850 Nestlé SA (Switzerland) 9,138 Hershey Co. (US) 7,461 Pladis (UK) 5,200 Chocoladenfabriken Lindt & Sprüngli AG (Switzerland) 3,968 Ezaki Glico Co. Ltd (Japan) 3,437 Arcor (Argentina) 2,900

Source: ICCO

In China, premium brands in standard boxed assortments, such as Ferrero Rocher, clearly outperformed the market. Internet platforms have enabled cross-border internet retailing, resulting in the introduction to mainland China of a large number of imported chocolate products with premium positioning and packaging.

In Brazil, standard boxed assortments are dominated by Nestlé brands including Garoto, Mundy and Alpino, all of which sit in the economy/standard price bracket. Nestlé’s smaller Alpino brand had one of the strongest performances, with a 16% CAGR. Brazilians continue to increase consumption of chocolate confectionery mainly due to rising income levels among lower income consumers, who are demanding more elaborate products.

Figure 7: Standard boxed assortments – brand performance by price platform 2010–15 Source: EMI

Figure 8: Confectionary – putting Asia Pacific in context, 2012–17 Source: EMI

As Figure 9 shows, despite the Asia-Pacific region being the second-largest market for confectionery, per capita spending is low compared to Western Europe and North America as most chocolate sold is ordinary/bulk. However, with increased customer spending and disposable income, the region’s markets are emerging as important for premium chocolate sales as customers are not only consuming premium chocolate themselves but also buying it for gifts.

Imports

Figure 10 shows the value of imports of cocoa beans by country in 2016. As Table 9 shows, the top importers of cocoa beans (raw or roasted) in 2016 were European nations (Netherlands, Germany, Belgium, France, Italy), the US, and Malaysia.

Figure 9: The value of imports of cocoa beans by country in 2016 (US$000)

Source: Trademap.org

Table 9: Top importers of cocoa beans by value and quantity in 2016 Country Value Imported (US$000) Quantity Imported (tonnes) World 10,336,713 3,249,782 Netherlands 2,554,354 818,613 US 1,327,673 421,198 Germany 1,095,164 343,084 Belgium 997,110 304,484 Malaysia 653,922 213,841 France 485,473 148,836 Spain 350,047 110,659 Italy 312,336 93,667 Turkey 281,924 86,985 Singapore 269,861 86,457 Japan 218,959 63,191 Source: Trademap.org

Figure 11 shows the value of imports of cocoa and cocoa-based products (including cocoa beans, cocoa powder, cocoa shells, etc.) by country in 2016. Table 10 shows that the top importers are again the US and EU nations.

Figure 10: The value of imports of cocoa and cocoa preparations by country in 2016 (US$000) Source: Trademap.org

Table 10: Top importers of cocoa and cocoa preparations by value and quantity in 2016 Country Value Imported (US$000) Quantity Imported (tonnes) World 10,336,713 3,249,782 Netherlands 2,554,354 818,613 US 1,327,673 421,198 Germany 1,095,164 343,084 Belgium 997,110 304,484 Malaysia 653,922 213,841 France 485,473 148,836 Spain 350,047 110,659 Italy 312,336 93,667 Turkey 281,924 86,985 Singapore 269,861 86,457 Source: Trademap.org

Exports

The top three exporters account for nearly 65% of the whole export market. Most exporters are from Africa.

Figure 11: The value of exports of cocoa beans by country in 2016 (US$000) Source: Trademap.org

Table 11: Top exporters of cocoa beans by value and quantity in 2016 Countries Value Exported Quantity Exported (US$000) (tonnes) World* 10,057,254 –* Côte d'Ivoire 3,875,959 1,220,382 Ghana 1,886,219 581,375 Cameroon 670,054 263,746 Ecuador 621,970 227,214 Belgium 613,470 187,201 Netherlands 439,977 138,623 Malaysia 276,486 91,090 Nigeria* 238,277 –* Dominican Republic 227,941 73,712 Peru 201,569 61,888 Source: Trademap.org *World and Nigeria quantity not yet reported.

Figure 12: The value of exports of cocoa and cocoa preparations by country in 2016 (US$000) Source: Trademap.org

Table 12: Top exporters of cocoa and cocoa preparations by value in 2016 Countries Value Exported (US$000) World 47,970,505 Germany 5,868,550 Côte d'Ivoire 5,726,135 Netherlands 5,168,160 Belgium 3,732,612 France 2,174,653 US 2,032,712 Ghana 1,898,465 Italy 1,698,841 Poland 1,633,799 Canada 1,529,537 Source: Trademap.org

10.2.9. Consumer perception

People around the world enjoy cocoa in many different forms, consuming more than 3 million tonnes of cocoa beans annually. Consumers are increasingly demanding clean labels with respect to the end product, driven by safety and health concerns. Dark chocolate is perceived to be a superfood as it is rich in flavonoids and antioxidants that have been shown to lower blood pressure, improve blood flow, and boost overall heart health. Premium chocolate manufacturers are looking at increasing their market share by further improving the taste of their chocolate products. Consumers are willing to pay for higher value chocolates if they believe they taste better. In line with the health trend, consumers are also seeking sugar-free and vitamin-enriched chocolates, with an emphasis on healthy, unsaturated fats. Other health trends include sugar-free, vegan, and organic chocolates.

10.2.10. Retail market value

Cocoa is traded on a number of markets, most importantly the New York and London futures exchanges. Currently, cocoa is traded at US$1,990/tonne, the lowest price in four years. Cocoa prices had a poor year in 2017, dropping 11% in New York. They were undermined by strong West African production, which drove the world back into production surplus. Many producers are confident that cocoa prices will rise to about $2,100–2,200/tonne in 2018. Cocoa prices averaged $3,100/tonne in mid-2016. Lower prices could boost consumption.

Products certified by Fairtrade International have a minimum price of $2,000/tonne, while organic cocoa is about $2,300/tonne.

10.2.11. Legislative and regulatory environment

According to the International Cocoa Organization (ICCO), there is no universally accepted criteria to qualify cocoa as fine/flavour cocoa. However, several criteria exist to distinguish fine/flavour from bulk cocoa. (It is important to note that the difference between fine/flavour and bulk cocoa is predominantly in terms of flavour rather than other quality factors.) Relevant criteria include the following:

• The genetic origin of planting material • An origin’s reputation for specific flavour characteristics and quality • Organoleptic quality (aroma, flavour notes, uniqueness) • Consistency in the volume and quality produced • Physical quality (standard parameters of fermentation, moisture content, bean size and colour, and the absence of saltiness, mould and insect damage).

(Source: CBI (Centre for the Promotion of Imports from developing countries) Europe and ICCO)

Organic certifications: The cost of compliance with organic standards includes the fee to be paid by the farmer organisation/exporter to the certification body and indirect costs to comply with organic requirements. Even farmers are subject to the costs in order to receive a Fairtrade or an organic standard certification. Generally, farmers need to pay 3% of their turnover (applicable to all products in this document); however, in recent years, the premiums for organic certified cocoa (for example, UTZ or Fairtrade) reached 18%, according to the International Institute for Sustainable Development.

The industry is increasingly witnessing multiple certification to the likes of UTZ, Fairtrade, Organic and Rainforest Alliance (RFA). The certification schemes that are most commonly used by cocoa producers are UTZ Certified and RFA.

UTZ: This certification scheme requires producers to adhere to certain agricultural practices, in addition to meeting social and environmental criteria.

RFA: This scheme requires producers to meet criteria of the Sustainable Agriculture Network in terms of environmental, social, labour, and agronomic management.

Fairtrade: A certification for small‐scale producers, it requires producers to adhere to certain environmental and social standards.

When exporting cocoa, the country must meet the legal requirements set by the importer. These include general requirements for food products, such as food safety, contaminants and labelling, as well as specific ones for the cocoa and chocolate industry.

The EU, for instance, has strengthened its regulation on cadmium in cocoa and cocoa- derived products (see Table 13). Cadmium found naturally in soil and in pesticides is a source of contamination for cocoa products and beans. It is found especially in cocoa from

Latin America. Although new EU regulations will be in effect from January 2019, some countries, including Germany, are already practising them.

Table 13: EU regulations regarding cadmium in cocoa and cocoa-derived products, effective 1 January 2019 Cocoa Products Maximum Permitted Cadmium Levels from 1 Jan. 2019 (parts per million)

Milk chocolate with <30% total dry cocoa 0.10 solids

Chocolate with <50% total dry cocoa 0.30 solids; milk chocolate with ≥ 30% total dry cocoa solids

Chocolate with >50% total dry cocoa 0.80 solids

Cocoa powder sold to the final consumer 0.60 or as an ingredient in sweetened cocoa powder sold to the final consumer

Source: Regulation EU 488/2014

Mycotoxins such as aflatoxins and Ochratoxin A are a problem in the industry as they can result in fungal infection of the crop. Almost all countries have regulatory limits set up against the presence of mycotoxins.

Another contaminant is polycyclic-aromatic hydrocarbons (PAHs), which can affect the crop post-harvest or during processing. The main source of PAH is smoke during drying or storage. The upper limit for benzopyrene, the most commonly found PAH, is 5 micrograms per kilogram (μg/kg) of fat and 30 μg/kg for the total sum of PAHs.

Other contaminants include microbiological contamination due to incorrect harvesting and drying techniques. Food safety authorities can withdraw imported food products from the market or prevent them from entering the country when micro-organisms are found.

10.2.12. Trading channels

Figure 14 shows all the stakeholders involved in the trading channel for cocoa.

Figure 13: Stakeholders in the trading channel for cocoa

In most cases, exporters of bulk cocoa sell their product directly to the grinders and processors of cocoa beans, who then process the beans into cocoa mass, cocoa butter, and/or cocoa powder, and distribute the processed products to various end markets, such as the manufacture of confectionery or food, or beauty and cosmetics, where products like cocoa butter are in great demand. In Europe, for instance, some countries including the Netherlands, Belgium and Germany are considered trade hubs for cocoa, and they re-export the product in Europe. The Netherlands is the largest grinder in Europe, accounting for about 32% of all European grinding.

In the fine/flavour cocoa segment, cocoa beans are increasingly traded directly from producer to chocolate makers.

10.3. Opportunities and threats

10.3.1. Opportunities

In the bulk cocoa market, the top cocoa producer, Côte d’Ivoire, announced it was cutting the fixed price paid to farmers by 36% in 2018. This could discourage harvesting for 2017–18, resulting in lower yield. This represents a good opportunity for Australia and other cocoa- producing nations in the coming years.

Organic chocolate-based confectionery launches in Europe increased from 7% in 2010 to 11% in 2015, indicating an increased interest in organic cocoa. Most of the organic production is now concentrated in Latin America, with the Dominican Republic accounting for 70% of global organic cocoa supply, followed by Peru, Ecuador and Mexico, which together make up about 20% of global production. Australia could work on attaining organic permits and certifications as the market is currently growing for organic products. Overall, legislative changes have made it difficult for small producers to compete.

There is a growing demand for premium chocolate across the world, driven by the health trend and quest for exclusive products. Dark chocolate in the premium space is believed to have several health benefits, resulting in growing demand. In terms of fine cocoa requirements, the demand is especially high in Europe, primarily due to the presence of big manufacturers. In Australia, consumer demand for premium and high-quality chocolate has driven the growing sales of companies like Lindt & Sprüngli (Australia). Lindt grew by 10% value share of chocolate confectionery in 2017. In particular, the company held a 20% share of boxed assortments. The company also saw solid growth in seasonal sales, with an 18%

value share of seasonal chocolate products in 2017. Its success was largely driven by its Lindor brand. Nestlé Australia now provides a premium chocolate experience for its customers through the Kit Kat brand. The company established a permanent Kit Kat store in Melbourne in late 2016, which allows customers to customise their own Kit Kat. Private label maintained a minor presence in the chocolate confectionery industry in Australia, with consumers continuing to demand premium brands.

The increase in chocolate consumption across Asia in countries like India and China has been driven by an increase in disposable income and strong economic performance. The current trend to clean labels could also benefit Australian cocoa production. Cocoa growth in the APAC region is projected to grow at 5% for the calendar year 2017.

10.3.2. Threats

Demand for healthier snacks is likely to grow in the short-to-mid-term. Sugar will remain in the spotlight as consumers look to combat growing rates of obesity, diabetes, and chronic health conditions.

Despite technologies such as smart drip, for instance, cocoa production in many countries is still highly dependent on manual labour, as cocoa is primarily cultivated by small and medium farmers in the developing countries of Africa, Asia and Latin America. Manual labour is cheap in these countries, resulting in lower final prices being traded on the New York and London futures exchanges for cocoa. Extreme poverty among West African cocoa producers fuels cocoa production — farmers in Ghana earn as little as 84 cents a day, and Ivorian farmers, 50 cents.

Australia also faces direct competition from countries that produce large amounts of cocoa per year. Not only do these countries have extremely large production volumes, but they have the labour force, trade agreements, and some certifications in place to ensure their continued presence in the chocolate market. In the fine/flavour market, Latin American countries have a very strong supplier power, making it difficult for new entrants. Most already have strategic alliances with the chocolate manufacturers in Latin America. Some producers also have interesting stories or backgrounds that are helpful in promoting their product to the chocolate manufacturers.

Finally, most of the current production in Australia is in cyclone-prone zones, which means the product/crop can be destroyed. This could be offset if farmers succeed in trellising cocoa. Another threat is that trinitario beans are susceptible to diseases and pests.

10.4. Conclusions and recommendations

North Queensland currently produces fine/flavour trinitario cocoa beans, which meet the current market demand for fine/flavour cocoa. Importers and manufacturers are increasingly looking for organic and certified cocoa products. Australia should lobby the ICCO to get its production certified, as this would increase both market value and demand. Certified cocoa has a higher growth in the market. For example, UTZ-certified sales increased 10% in 2016 (see Figure 15), which is higher than the overall growth in the cocoa market.

Figure 14: UTZ-certified sales, 2010–16 (tonnes) Source: UTZ

Certification can also help exporters and cooperatives gain access to new markets. Today, multiple certifications are the norm in the cocoa industry. Also, the largest global chocolate manufacturers now have sustainability targets in place. Mars, Hershey’s, and Ferrero have committed to using 100% certified cocoa by 2021.

The bean-to-bar trend is also contributing to the market for fine/flavour cocoa. This type of manufacturing involves distinctive methods of production, packaging, and direct shipping or sales to high-end outlets. In the premium/fine cocoa industry, direct trade relationships between the cocoa grower and final manufacturer offer good long-term opportunities for both parties, as well as better costs/profits. Australian farmers should forge direct trade relationships with chocolatiers in Europe for strong growth opportunities.

If Australia decides to invest in the cocoa industry, the country needs to research other suitable zones for plantation due to the threat from cyclones in the current zone. Research trials in Australia have proven it can produce an average of 3 t/ha compared to 1–2 t/ha in other parts of the world. Australia could use this as a competitive advantage in both the bulk and premium cocoa markets. Strong growth is expected in the premium chocolate industry even in Australia, as chocolate manufacturers compete for consumer attention with ever more flavour innovations. Consumers will continue to demand premium chocolate, with ingredients and sourcing becoming an increasingly important part of the decision-making process.

2. Sesame

10.1. Introduction

Sesame is a flowering plant of the genus Sesamum/benne. Sesamum has approximately 20 species, of which the best known is sesame (Sesamum indicum/Sesamum orientale), the source of the popular sesame seeds. Sesame seed is one of the oldest oil crops, with records dating back to 3000–4000 BC.1 Sesame has many species and varieties, many of which grow wild in the plant’s native zone of Sub-Saharan Africa. Cultivated for its edible seeds and oil, sesame has over time become widely naturalised in tropical regions across the world, but notably in Africa and Asia.

Figure 15: The sesame plant

There are two popular varieties of sesame: Sesamum indicum, the most traded variety, and Sesamum radiatum, also known as benniseed, black sesame and black benniseed. Sesamum radiatum, which is native to west and central Africa, has become popular in Asian and African cuisines.

Figure 16: Sesamum indicum (left) and Sesamum radiatum (right) 10.2. Product overview

1 The Origins of Agriculture and Crop Domestication, The Harlan Symposium, A.B. Damania, J. Valkoun, G.Willcox and C.O. Qualset.

10.2.1. Uses and applications

Sesame seed

Sesame fruits split open once to release the seeds. The colour and size of the seeds vary depending on the variety. The seeds can be off-white (the most commonly traded colour), tan, brown, reddish-grey or black. They are typically 3–4 mm long and about 1 mm2 thick, and can be smooth or ribbed.

Sesame seeds contain about 55% oil and 25% protein.3 The white and black seeds are popular in foods and cuisines across the world. Sesame seeds are used in baking, to top breads, buns (some reports claim that most of Mexico’s sesame seed production is used to top McDonald’s hamburgers), bagels and biscuits. They are also a popular ingredient in the cuisines of East Africa, India and some Asian countries, including China and Korea, where they are either ground or used as an ingredient or condiment. Asian and Indian cuisines use sesame seeds in dishes across the menu: from soups to main courses (sesame chicken) to desserts (halva). Black sesame seeds are popular in Korean cooking to marinate meat and vegetables. Chefs in tempura restaurants mix black sesame seeds with cottonseed oil for deep-frying. Sesame is also known as simsim in Africa, and is used to make a variety of dishes; for example, wangila is made with ground black sesame seeds and mostly served with smoked fish or lobster.

Tahini, a traditional Middle Eastern paste, is made from hulled sesame seeds. Rich in protein and a good source of energy, this spread is often used with chickpeas to make hummus and with aubergine to make baba ganoush.

Sesame seed oil

Sesame seed oil is an edible oil derived from sesame seeds. It is also known as gingelly oil. It is commonly used as both a cooking oil and a condiment in cuisines across the world. It is composed of fatty acids including linoleic acid (41%), oleic acid (39%), palmitic acid (8%), stearic acid (5%), and others.4 Sesame seeds burst once they are completely ripe. This process, known as dehiscence, varies. Sesame seed oil is used in cooking (as a cooking oil, in margarines, and even directly in salads) and traditional medicines, and as an ingredient in many commercial/industrial products.

Sesame seed oil is a flavour ingredient in Asian (particularly Chinese) cuisine. It is a good antioxidant due to the presence of sesamol. The oil has two distinct flavour profiles depending the extraction process: the oil extraction from the raw sesame seed is a pale- yellow liquid that has a nutty flavour, is high in polyunsaturated fats and is used for cooking and frying purposes (also in cosmetics), while the darker amber-coloured aromatic oil extracted from toasted and pressed seeds is used as a flavouring agent and not as a cooking oil. Sesame seed oil has a long shelf life.

2 Alternative Field Crops Manual, E.S. Oplinger, D.H. Putnam, A.R. Kaminski, C.V. Hanson, E.A. Oelke, E.E. Schulte, J.D. Doll 3 AGMRC sesame profile, https://www.agmrc.org/commodities-products/grains-oilseeds/sesame-profile/ 4 ‘Nutrition facts for sesame oil per 100 g, analysis of fats and fatty acids’, Conde Nast for the USDA National Nutrient Database, version SR-21.

Other uses and applications

Other than cooking, sesame seed oil is used as an ingredient in beauty and cosmetics products (for example, soaps, perfumes, bath oils), paints, insecticides and pesticides, and pharmaceutical and traditional medicines. Its appeal to the beauty and cosmetics industry is a high antioxidant level coupled with moisturising (emollient) properties. It is also naturally antibacterial and effective against common skin pathogens, as well as common skin fungi, including athlete's foot fungus. As a result, many skin products positioned around natural ingredients now use sesame seed oil. Sesame oil contains two important antioxidants – sesamolin and sesamol – believed to promote cell integrity and the healthy function of body tissues in the presence of oxidising compounds. These antioxidants maintain fats and dramatically increase vitamin E activity.

They are also being researched as potential industrial antioxidants, as well as nutraceuticals and potential templates for synthetic pharmaceutical compounds5 (AGMRC, 2017). Sesame seed oil is being investigated as a cell-growth regulator that could slow down cell growth and replication, partly through its antioxidant properties. Research shows that the oil can neutralise free oxygen radicals within the skin and surrounding tissues. Other experiments have demonstrated positive effects for helping to clear blocked arteries.6

At present, sesame oil usage in traditional medicines is mostly as an ingredient in rheumatic oils and for cleansing/detoxing, because the product can be used as a laxative (Dark, 1998). It is also used as a pharmaceutical aid to deliver drugs and as a solvent for intramuscular injections, and it has nutritive, demulcent, and emollient properties (Tyler et al., 1976).

Sesame cake/meal

When sesame oil is extracted from the seed, the leftover is called sesame cake. This is used for human and livestock consumption. It has high protein of about 35–50% and hence can be used as a feed for poultry and livestock or mixed with flour and used as an ingredient in baking goods. Figure 18 shows the US Department of Agriculture (USDA) nutrient profile on sesame oil.

5 Nutraceutical Importance of Sesame Seed and Oil: A Review of the Contribution of their Lignans, PJ Kanu, JZ Bahsoon, JB Kanu, JBA Kandeh 6 Food, Industrial, Nutraceutical, and Pharmaceutical Uses of Sesame Genetic Resources, Trends in New Crops and New Uses

Figure 17: The US Department of Agriculture nutrient profile on sesame oil

10.2.1. Issues/challenges facing the product

While there are no big challenges in the market, like all crops, the plant is prone to bugs (for example, African bollworm, green vegetable bug, gall midge, crickets) and pests (for example, aphids, termites) The lygaeid or sesame seed bug, which is found predominantly in the clay soils of Sudan (a top sesame producer), tends to deplete the oil content of the seed, reducing the overall quality as well as the quantity of the seed oil. The bacterial blight and leafspot found in many parts of Africa also tend to deform the leaves and flowers of the sesame tree.

Harvested seeds are also prone to losses from threshing and storage. As always, the crop is prone to challenges from the weather. For example, the wind factor prevented commercial cultivation in France. Non-dehiscence varieties are grown in the south-western US as dehiscent varieties led to several production issues.7

10.2.2. Supply

Production and cultivation

Sesame planting requires about 90 to 120 frost-free days. The optimal temperature for sesame growth is about 25–27°C.8 Any temperature below 10°C results in inhibited growth, while temperatures below 20°C result in lower yield and growth. Due to its drought-resistant nature, it grows well in tropical and subtropical regions. Despite that, it needs adequate irrigation/moisture in the initial growth phase. Moisture levels ahead of planting and flowering result in a very good yield. Any rainfall during the last part of the growth season results in losses and prolonged growth. It is also sensitive to the wind, as high winds can prevent cultivation. In the case of a sesame seed, the protein and oil content are inversely proportional. Sesame grows best in fertile well-drained soil with a neutral pH. It doesn’t grow well in wet conditions. Good drainage is required as the plant is susceptible to waterlogging.

The sesame plant grows to 50–100 cm in height. It is an annual. The flowers vary in colour depending on the varieties. The colour of the flower/fruit is generally the same as the seed. In the dehiscence process, the fruit splits to release the seeds when ripe. Research has been done on high-yielding dehiscence-resistant varieties as dehiscence time varies between plants, which has resulted in production losses in the US. The seeds are small and hence difficult to dry post-harvest; therefore, they need to be harvested as dry as possible. Post- harvest, they need to be stored in 6% moisture or less as moist seeds can heat up quickly and turn rancid. After harvesting, the seeds must be cleaned and dehulled. The seeds pass through an air separation stage to remove any foreign particles. Sesame is usually harvested between 90 and 150 days after planting. The crop must be harvested before the cold sets in as the first frost can cause havoc on the plant and seed quality. The mature leaves and stems change colour from green to yellow and red (AGMRC, 2017).

Sesame seeds also come in shattering and non-shattering varieties, and the harvesting technique is different for each. Due to their size and weight, the seeds can be easily damaged during harvest. In the case of non-shattering varieties, low speed (450–500 rpm) mechanical methods are used to reduce seed damage and loss.

Sesame oil production methods vary by country. In countries with cheap labour, the process is manually intensive, which is the case for most of the top producers of sesame seeds. However, today most countries use at least some kind of expeller press. The end product

7 Nondehiscent sesame (Sesamum indicum L.): its unique production potential and expansion into the southeastern USA, Annie Couch, Romain M. Gloaguen, D. Ray Langham, George J. Hochmuth, Jerry M. Bennett & Diane L. Rowland, 2017 8 Alternative Field Crops Manual, E.S. Oplinger, D.H. Putnam, A.R. Kaminski, C.V. Hanson, E.A. Oelke, E.E. Schulte, and J.D. Doll

can be either refined or unrefined. Unrefined is a popular way to retain nutrients while refining is done by solvent extraction, neutralisation, and bleaching processes. The flavour profile depends on the process of extraction and can be light or dark in colour.

Sesame yield on average is 181–272 kg/hectare. The highest yields per acre have been about 422 kg. Production costs are equal to that of soybeans or sorghum, making it inexpensive to grow.

10.2.3. Global production

Global production of sesame seeds amounted to 6.1 million tonnes in 2016. Figure 19 shows the global production and yield quantities of sesame seed from 2001–16. Some research claims that about 70% of global production is extracted for sesame oil and, of that, about 15% is used for tahini (sesame paste) and about 15% as a food ingredient.

Figure 18: Global production and yield of sesame seed, 2001–16 (tonnes/hectares) Source: FAO, Dec. 2017 Based on Food and Agriculture Organization of the United Nations (FAO) data, the product is grown in nearly 75 countries today (see Figure 20). Table 14 shows the largest average producers of sesame from 2001–16 and Table 15 shows annual production of the top 10 producers from 2010–16.

Figure 19: Countries that currently produce sesame Source: FAO, Dec. 2017

Table 14: Average sesame production by top 10 countries, 2001–16 (tonnes) Country Quantity (tonnes) India 713,668.8 Myanmar 669,513.9 China, mainland 651,386.3 Sudan 464,800.0 United Republic 366,152.8 of Tanzania Sudan (former) 308,909.1 Nigeria 259,453.4 South Sudan 198,306.2 Ethiopia 179,700.6 Uganda 129,132.3 Source: FAO, Dec. 2017

Table 15: Annual production from top producers, 2010–16 (tonnes) Country 2010 2011 2012 2013 2014 2015 2016 China 587,947 605,770 639,989 624,831 632,108 642,427 649,589 Ethiopia 327,741 244,783 181,376 220,216 288,770 302,273 267,867 India 893,000 810,000 685,000 715,000 828,000 850,000 797,700 Myanmar 787,400 832,100 794,600 817,100 801,600 828,270 812,952 149,410 229,167 994,800 584,980 434,990 432,900 460,988 Nigeria South 200,000 225,000 175,000 189,504 202,027 Sudan Sudan 187,000 562,000 721,000 329,000 525,000 Uganda 119,000 141,926 124,000 124,208 144,982 120,000 130,000 Tanzania 144,420 357,162 456,000 1,050,000 1,113,982 1,174,589 940,221 Source: FAO, Dec. 2017

FAO data shows that production levels have been quite standard in most countries, although in the long run (over 10 years) there has been a decline in production levels from India and China to Africa and Latin America. The Republic of Tanzania has massively increased its production over the past five years. Tanzania’s increased production has come at a great price as the Tanzanian Government is now dealing with other issues such as deforestation. Apparently many villages have scorched their forests to grow sesame due to its high price in the international market. As Figure 21 shows, 54.4% of sesame is grown in Asia, followed by Africa with 41.5%.

Figure 20: Production share of sesame seed by region, 2001–16 Source: FAO, Dec. 2017 10.2.4. Current Australian landscape

FAO data shows the product is not currently grown in Australia. There was minimal production in the 1990s; however, it has since been scrapped.

FAO does not have updated data on Australian imports and exports.

The figure from 2013 shows 5,758 tonnes of sesame seeds imported into the country at an official value of US$13.94 million. Australia also imported 1,462 tonnes of sesame oil in the same year at US$8.31 million (source: FAO). In 2016, Australia imported 6,740 tonnes of sesame seeds and 3,243 tonnes of sesame oil (source: ITC).

10.2.5. Retail market prices

Price fluctuations are very normal in the sesame industry, as it is a commonly traded commodity. For example, 2014 was a record year for sesame yield/production, but production fell in 2015 and 2016. Production was 6.5 million tonnes in 2014 and 6.1 million tonnes in 2016.

Retail prices in each country are very different. For example, Table 16 shows that prices can range from $4.5/kg in India to $26/kg in the US.

Table 16: Sesame seed oil retail prices Country Estimated Price (US$/kg) Estimated Price (A$/kg) India 3.5–4.5 4.5–5.8 US 10.0–20.0 13.0–26.0 China 6.5–8.0 8.4–10.4 Notes: Retail prices are based on the prices in the top online grocery stores in the respective country – but prices could be lower in store. US prices are from store checks. It’s also possible to buy wholesale quantity at much lower prices, for instance, via e-commerce platforms like Alibaba in China.

As Table 17 shows, organic sesame oil generally costs about 1.5 to 2 times the price of regular sesame oil.

Table 17: Organic sesame seed oil retail prices Country Estimated Price (US$/kg) Estimated Price (A$/kg) India 4.0–5.0 5.2–6.5 US 12.0–18.0 15.5–23.5 China 3.5–5 4.5–6.5

Retail prices are based on the prices in the top online grocery stores in the respective country – but prices could be lower in store. One report claims that the prices of sesame seed from farmers to the market in India can be as low as $1–1.25/kg.

10.2.6. Illicit trade or other issues

As sesame oil is a relatively expensive vegetable oil, producers often mixed it with cheaper vegetable oils in the past (source: CBI Europe). However, today there are strict regulations on product composition and origin.

10.2.7. Demand

Sesame seeds are exported and imported in three forms – sesame seed, sesame oil and sesame meal/cake.

The top exporters of sesame seed are India, Ethiopia, Nigeria and Sudan (see Table 18). Despite being among the top producers, most of China’s product is consumed domestically. Trade data from FAO is only available up to 2013.

Table 18: Largest exporters of sesame products (seed, oil and cake), 2011–13 (tonnes) Country Item 2011 2012 2013 China Oil, sesame 10,565 12,706 12,238 China Sesame seed 33,882 37,577 34,594 Ethiopia Sesame seed 254,127 317,920 240,094 India Cake, sesame 2,635 2,807 4,153 seed India Oil, sesame 7,166 4,416 6,247 India Sesame seed 408,687 327,059 279,727 Myanmar Cake, sesame 5,600 5,600 5,600 seed Myanmar Oil, sesame 800 800 800 Myanmar Sesame seed 36,500 38,200 33,300 Nigeria Sesame seed 124,700 137,861 153,400 Sudan Oil, sesame 144 181 Sudan Sesame seed 175,476 219,635 Tanzania Oil, sesame 475 10,283 11,764 Tanzania Sesame seed 76,017 76,710 87,727 Source: FAO, 2017

The International Trade Centre’s TradeMap shows that the export market for sesamum seeds (broken and unbroken) in 2016 was led by Ethiopia, followed by India, Sudan, Myanmar and Tanzania (see Table 19 and Figure 22). The world exported nearly US$2.15 billion of sesamum in 2016.

Table 19: Sesamum seeds export data by value and volume, 2016 Country Value Exported (US$000) Volume Exported (tonnes) Ethiopia 431,332 411,542 India 415,203 325,908 Sudan 290,592 259,481 Myanmar 166,001 103,756 Tanzania 129,570 133,752 Burkina Faso 112,957 159,837 Nigeria 106,786 Unreported China 49,206 26,265 Source: TradeMap, International Trade Centre

Figure 21: Sesamum seed exporters by value, 2016 (US$000) Source: TradeMap, International Trade Centre

Global exports of sesame seed oil (refined and unrefined) amounted to US$234 million in 2016, led by Japan, Mexico, Taipei, Singapore, India and China.

Table 20: Sesame seed oil (refined and unrefined) export data by value and volume, 2016 Country Value Exported Volume Exported (US$000) (tonnes) Japan 52,219 8,139 Mexico 34,863 9,410 Taipei 19,950 4,657 Singapore 18,231 3,941 India 16,654 8,392 China 16,409 4,383 Source: TradeMap, International Trade Centre

Figure 22: Sesame seed oil exporters by value, 2016 (US$000) Source: TradeMap, International Trade Centre

Marketing varies by country. In Tanzania, sesame was marketed as a high returns perfect crop to help farmers change their lives. In 2016, following the increase in global demand for sesame seeds, there was a big push from domestic exporters to get more farmers to grow sesame. Sesame is the second most lucrative crop farmed in the region, after cashews, and farmers can make about $200–400 per acre. The entire initiative backfired for the country. Several cultivators burnt down forests to create farms that they only used for two to three seasons; they believed new land was more profitable as it had minimal maintenance and produced a high yield (this was unproven and more like a local belief). This resulted in minimal rains, water shortages and deforestation, which the government now has to deal with. The government has also set up organisations and associations to educate and train new and existing farmers on cultivation techniques and new technologies (for example, for extraction, mobile technologies for training), as well as to help them in reaching the right buyers and export markets. This process is followed in most of the producing countries.

Ethiopia produces sesame seeds purely for the export market. It is a high-value export crop that plays a strong role in the country’s national economy. It currently represents more than one-third of Ethiopia’s total oilseed production. Unlike other sesame producers, Ethiopia’s sesame is mainly produced for the international market (the largest importer is China), with close to 75% exported. The sesame that is not exported is mostly used for seed, oil crushing, and baked products.9

Marketing for the end user also varies by country. While the EU markets sesame oil as a specialty oil used in the food sector, India markets the product using celebrity endorsements (regional celebrities).

Table 21 and Figure 24 shows that the top importers of sesamum seeds are China, Turkey, Japan and South Korea, which all use the seeds as a key cooking ingredient.

Table 21: Sesamum seed import data by value and volume, 2016 Country Imported Value (US$000) Imported Volume (tonnes) China 956,346 931,159 Turkey 235,860 137,011 Japan 205,438 152,101 South Korea 111,099 77,906 Vietnam 100,427 Unreported Source: TradeMap, International Trade Centre

Figure 23: Sesamum seed importers by value, 2016 (US$000)

Source: TradeMap, International Trade Centre

In the EU, the key importers of sesame seed are Germany, Greece, the Netherlands, the UK and France. Most of these countries are also trade hubs in Europe so the imports are not only used domestically but are also re-exported within Europe. For instance, the Netherlands accounted for almost 40% of sesame seed exports in 2015 as it is one of the main trade hubs, while the UK’s re-export markets in 2015 included Ireland (29%), Germany (23%) and France (20%).

9 Ethiopia’s Oilseed Production Forecast to Increase despite Drought, FAS/USDA, 2016

Table 22 and Figure 25 show that the top importers of sesame seed oil are the US, the UK, Canada, Australia and Germany. The world imported US$243 million worth of sesame oil in 2016.

Table 22: Sesame seed oil (refined and unrefined) import data by value and volume, 2016 Country Imported Value (US$000) Imported Volume (tonnes) US 83,634 16,399 UK 14,111 3,634 Canada 11,994 2,149 Australia 10,438 3,243 Germany 9,661 2,123 Source: TradeMap, International Trade Centre

Figure 24: Sesame oil importers by value, 2016 (US$000) Source: TradeMap, International Trade Centre

Eurostat data (2015) shows that European imports of sesame oil reached 12,000 tonnes (worth €51 million). Since 2011, imports have increased at an annual rate of 7.1% in volume, mainly due to the expanding use of sesame oil in Europe, in both Asian cuisines and gourmet and health products, as well as its marketing as a high-quality oil (see Figure 26). Continued demand is expected in the sesame oil industry as more customers realise the health benefits of the product.

The main importers of sesame oil in Europe are:

• UK (27% of European imports) • Netherlands (19%) • Germany (17%) • France (10%).

10.2.8. Consumer perception

Sesame seeds and oil are very popular in many parts of the world. They are a staple in many Asian cuisines (for example, Japanese, Chinese, Indian, Korean), as well as African cuisines (for example, Tanzania, Nigeria). In use for over 4,000 years, sesame is considered one of the most potent, nutrient-dense medicinal foods still used today. Not only are the seeds nutritional, the oil is also highly valued for its rancid resistance. Sesame is used in various

forms, the most common being toppings on burger buns and bakery products. Many traditional Asian dishes have sesame as an important ingredient, while sesame oil is used as a garnish in various Eastern dishes and for frying Japanese dishes such as tempura. It has the highest oil content among all oilseeds.

The health and wellness trend is also aiding its increased sales and demand. Some of the customer perceptions of sesame’s health benefits include:

• improved skin, hair, and bone health (due to high zinc content) • oral health – sesame oil is promoted in many Asian countries as a perfect tool to improve oral health by removing plaque • antioxidants and anti-inflammatory properties – the presence of sesamol contributes to sesame’s high level of antioxidants and anti-inflammatory properties, making it a perfect natural product to aid with heart health, rheumatoid arthritis, skin issues and burns • anti-cancer – not only do sesame seeds contain an anti-cancer compound called phytate, but the magnesium in sesame seeds also harnesses anti-cancer properties. A study published in The American Journal of Clinical Nutrition found that the risk of colorectal tumours decreased by 13% and the risk of colorectal cancer decreased by 12% for every 100 mg of magnesium taken in.10 Magnesium also helps with respiratory health • diabetes prevention and blood pressure reduction – the substitution of sesame oil as the sole edible oil in the diet has an additive effect in lowering blood pressure and plasma glucose in hypertensive diabetics11 • improved digestive health due to high fibre level.

Despite its many beneficial properties, sesame oil is not the most-used edible vegetable oil in cooking today due to the presence of cheaper oils such as palm oil and vegetable oil. However, it has potential. In Europe, it is being marketed as a high-quality oil, and accounts for 40% of the market in the UK and 20% in Germany (source: Eurostat, 2016).

10 Magnesium intake and colorectal tumour risk: a case-control study and meta-analysis, Petra A Wark, Rosa Lau, Teresa Norat, and Ellen Kampman, 2012 11 A pilot study of open label sesame oil in hypertensive diabetics, Sankar D, Rao MR, Sambandam G, Pugalendi KV.

Figure 25: Total imports of sesame oil to Europe, 2011–15 (tonnes) Source: Eurostat, 2016

Sesame seeds have always been highly popular as an ingredient in baking and cooking in many parts of the world. However, both oil and seed imports are susceptible to quality and origin. The indication of origin of sesame seeds and sesame oil is one of the important factors influencing its price, as it is produced in many regions worldwide and certain provenances are especially sought after.12

10.2.9. Retail market value

Average export prices for raw sesame in Asia range from US$1,000 to $1,600/tonne (some African nations, such as Nigeria and Tanzania, even undercut the prices to US$900/tonne). These countries are also major markets for sesame oil. The South African beef market consumes much of the cake. Because of the nutritional value of sesame cake for cattle, prices range from US$550 to $600/tonne.

10.2.10. Legislative and regulatory environment

Sesame is a much-traded product around the world. It has set regulations in most countries and tariff rates/duties are in place in some countries.

China produced 1 million hectares of sesame a few decades ago but is now down to 400,000 hectares. The product is now mostly imported from Africa after trade agreements eliminated tariff rates for sesame seed imports. China’s decline in production is also attributed to the tedious harvesting process in the past. Currently, China has tariffs in place for sesame seed/oil imports from a number of countries, including Australia (4.8%), the US (12%) and the UK (12%). Imports from developing nations, ASEAN, and even New Zealand and Singapore are at a 0% tariff rate for China. India had an export ban on bulk/wholesale edible oils in place until April 2017, which limited its export capabilities. Despite that, it is still one of the larger consumers of the product.

12 Control of Origin of Sesame Oil from Various Countries by Stable Isotope Analysis and DNA Based Markers – A Pilot Study, David William, 2015.

Almost all importing nations have legal requirements in place applicable to the food and oil industry, which include food safety, hygiene, contamination levels (for example, Benzopyrene, Salmonella), extraction solvents, product composition, labelling (must include nutrition and allergens as sesame seed allergy affects some people and sesame oil is sometimes sold under other names, such as gingelly oil), and all other supplier-specific requirements like packaging.

In the EU, imported sesame needs to comply with the following regulations13:

• Maximum level for erucic acid in oils and fats – EU legislation fixes a maximum level of erucic acid in oils and fats intended for human consumption • Extraction solvents for food – there are EU rules for the marketing and application of extraction solvents used in the production of foodstuffs and food ingredients (EU Directive 2009/32s/EC) • Contaminants in food – the EU has laid down maximum levels of contaminants in food, including ingredients such as vegetable oils (Regulation (EC) No 1881/2006). Contamination with PAHs, especially benzopyrene, is common for sesame oil, which can occur during drying and roasting of the sesame seeds. The maximum limit of benzopyrene allowed is 2.0 μg/kg. Other contamination sources can be salmonella and aflatoxins, which deserve special attention for unrefined oils • Maximum residue levels (MRLs) of pesticides in food – EU legislation has been laid down to regulate the presence of pesticide residues in food products. If sesame seed has been treated with pesticides, the residue should remain within limits • Additives, enzymes, and flavourings in food – the EU has a list of permitted flavourings and requirements for use in foodstuffs intended for human consumption, which includes vegetable oils • Hygiene – EU food hygiene levels are determined by HACCP (Hazard Analysis and Critical Control Points) principles and these are applicable to import/export of food to/from the EU • Labelling – all sesame-based products sold to consumers in bottles/containers etc. should adhere to EU Regulation 1169/2011 • Allergens – for example, sesame seeds in sesame oil should also be labelled (Directive 2003/89/EC) • Organic farming: organic products must adhere to further organic standards. Organic sesame oil is one of the vegetable oils gaining popularity in the German food market • Fairtrade – while not a requirement, there is growing attention to the social and/or environmental conditions in the producing areas. Most European buyers have a social code of conduct which they will expect you to adhere to. FairFLO is the leading standard-setting and certification organisation for Fairtrade and other standards like Fairtrade Ecocert and IMO’s Fair for Life.

10.2.11. Trading channels

Government entities exist in nearly all producing countries that assist with product marketing; educate and train farmers on cultivation techniques and new technologies; and help farmers to reach the buyers. Governments in most countries also provide some incentives to farmers to help cushion the effect of global price drops. Figure 27 gives an example of the trading channels for sesame oil.

13 CBI, Ministry of Foreign Affairs, Europe, 2016

Figure 26: An example of trade channels for sesame oil in Germany Source: CBI product factsheet

In general, the following margins can be expected (source: CBI):

• Brokers – approximately 0.5–2%, or fixed price, per tonne • Importers –depends on whether the oil is simply being forwarded (5–10%) or the importer has to re-sell specific quantities (10–20%) • Refiners charge a fixed amount per tonne of oil refined, approx. €200–300/tonne • The margins charged by other industry players such as food manufacturers, bottlers, and retailers will highly depend on the nature of the final product.

10.3. Opportunities and threats

10.3.1. Opportunities

Sesame is a widely traded product around the world. Sesame offers drought tolerance, good yield potential, a decent price, and few pest problems. Sesame does well with comparatively little irrigation – 30–38 cm a year. By comparison, corn requires 56–61 cm; soybeans 43–48 cm; and cotton 48–56 cm. Many farmers in the US are now rotating sesame with cotton.

Despite over 75 countries producing sesame, many are not self-sufficient and therefore they rely on trade. China is one example of this. Supply and demand are mostly stable but can vary vastly by year. For instance, high demand in 2013 outpaced supply, while in 2015 the reverse was true.

The key opportunities for sesame seeds lie in the organic market. This plays a very important role as more and more customers and importing nations (for example, Japan, the US and Germany) seek to purchase organic, chemical-free product. The US is the top market for organic products, followed by Germany. In 2016, the US organic industry hit US$47 billion in retail sales, up from US$43 billion in 2015. Organic food now accounts for more than 5% of total food sales in the US. Organic food sales increased by 8.4% from 2015, blowing past the stagnant 0.6% growth rate in the overall food market (source: Organic Trade Association

[OTA]). Table 23 shows the value of retail sales of organic oils and fats in the US in 2017. The global organic food market was valued at US$77.4 billion in 2015 and is expected to continue its strong growth.

Table 23: US retail sales of organic oils and fats in 2017 (US$ million)

Source: OTA

Studies show that the global organic seed market was worth US$1.6 billion in 2015. It is expected to grow at a compound annual growth rate exceeding 12–14% from 2016 to 2024.14 This may be attributed to a shift in consumer preference from chemicals and genetically modified crops to naturally sourced products. Organic certification is expected to be an important competitive advantage for producers and/or exporters targeting the health and speciality segments in Europe.

Despite high production volumes, today’s crops are not without issues. For example, Tanzania’s high production has comparatively low export value and volumes as the product is of low quality. Tanzanian farmers are focused on producing multiple colour sesame seeds rather than off-white seeds, which are in highest demand, and they also have poor storage and facilities, which lead to losses. There is export demand, but the country is unable to meet it. Australia could exploit these opportunities.

Even countries like India, the second-largest exporter, have issues. While organic farming is growing, not all farmers follow it. And, despite no official ban, Japan doesn’t import from India due to the presence of pesticides in the past.

In Europe, while consumer sales exist, there is a growing market for sesame in food applications, such as sesame oil in hummus and salad dressings. It is marketed as a high- quality oil. Top consumers in Europe are the UK and Germany. Consumption in Europe has been increasing at 7% year on year. In Europe, sesame oil is considered a specialty oil and not a commodity (source: CBI Europe).

Despite being traded widely, global consumption of sesame oil is low compared to other edible vegetable oils (see Figure 28), primarily due to higher price points. Based on its nutrient profile, the potential exists to increase this.

14 Various competitive research studies.

Figure 27: Global consumption of edible vegetable oils, 2013–17 (million tonnes) Source: Statista

The global edible oil market is expected to grow by 4.7% compound annual growth rate from 2017 to 2022 (Euromonitor). Table 24 shows the estimated growth of edible oils by volume and value to 2022.

Table 24: Global edible oil production by volume and value, 2015–22 Edible Oils 2015 2016 2017 2018 2019 2020 2021 2022

Volume (million 51,880.1 54,254.9 57,290.1 60,172.0 63,220.4 66,227.6 69,057.8 71,669.3 litres)

Value (US$ million) 70,647.5 77,094.5 84,756.8 88,825.0 92,841.2 96,615.3 99,842.1 102,521.4

Source: Euromonitor

10.3.2. Threats

Australia faces direct competition from Asian and African countries that produce large volumes of sesame. Not only do these countries have extremely large production volumes, but they have the labour force and trade agreements in place with other countries to ensure their continued presence in the market. The large labour force in the developing nations also ensures lower production costs and therefore high profits for these nations.

Furthermore, many exporting countries have favourable tariff terms for each other. For instance, China, a key importer and producer, has 0% tariffs for African countries it imports from, but 4.8% tariffs for Australia.

10.4. Conclusions and recommendations

Australia was involved with sesame farming in the past, but several limitations (farmer inexperience, drought conditions, dehiscence issues) led to the collapse of the industry. The US has also faced dehiscence problems with sesame; however, to meet the massive

demand, agricultural company Sesaco bred a non-dehiscent variety. With the release of non- dehiscence seeds, the US sesame industry is currently in a growth phase.

The top importers of sesame seed are in the Asia-Pacific region (China, Japan, South Korea, Vietnam), while the top consumers of sesame oil are Western countries (the US, the UK, Canada), so Australia should focus on growing organic sesame if it decides to enter the space. Organic food products are considered to provide better nutritional value, taste, and higher antioxidant properties. These products do not use harmful chemical pesticides, herbicides, fertilisers, and insecticides during their production. Increasing natural food demand and rising awareness among consumers regarding health benefits from non- synthetic food are expected to drive the natural organic food market, and sesame is no different. In terms of product, off-white and black sesame seeds have the highest demand. Organic certification is expected to be an important competitive advantage for producers and/or exporters targeting the health and specialty segments in Europe.

Israeli start-up Equinom has developed a high-yield, non-GMO sesame seed that can be harvested mechanically, which could shift production from developing to industrialised countries. It is undergoing product trials in the US and Australia, and is expected to be available in 2019. This would be a key competitive advantage for Australia to enter the sesame industry.

3. Turmeric

10.1. Introduction

Turmeric (Curcuma longa) is a perennial plant of the ginger family, Zingiberaceae. Curcuma has more than 100 species, which include spices like turmeric and ginger. There is a trend to growing perennial crops due both to their stable demand and resistance to climate change. Other benefits include less water pollution and soil erosion, as these plants develop much greater root mass and protect the soil all year.

One research report claims that there are over 30 different product varieties of turmeric, many named after the city/region where they are cultivated. Colour-based varieties include:

• yellow turmeric (Curcuma longa) – the most popular variety, it is sometimes known as the golden spice. Yellow turmeric powder has a bitter pepper-like flavour. It is grown in South-East Asia and is native to India. Yellow turmeric is discussed in this chapter. • white turmeric (Curcuma zedoaria) – also known as amba haldi, this turmeric is native to India and Indonesia. It has a lighter flesh than yellow turmeric and its flavour is similar to ginger. It is only used in Asian cuisines and is not as popular as yellow turmeric. • Black turmeric (Curcuma caesia) – native to north-east and central India, this variety is endangered and is used only for medicinal purposes. In traditional medicine, it is used to treat pneumonia and asthma among other ailments.

Yellow turmeric is widely used as a flavouring agent in many Asian cuisines and as a common colouring agent – both in cooking and industrial segments. Turmeric powder has a warm, bitter, pepper-like flavour and earthy, mustard-like aroma. Figures 29 and 30 show the plant and rhizome of the yellow turmeric.

Figure 29: Turmeric Rhizome Figure 28: Turmeric plant and flower Dry turmeric contains 69.43% carbohydrates, 6.3% proteins, 5.1% oils, 3.5% minerals, and other elements. The bioactive chemical constituents in turmeric have been extensively investigated. About 235 compounds, primarily phenolics and terpenoids, have been identified from various species of turmeric, including 22 diarylheptanoids and diarylpentanoids, eight phenylpropenes as well as other phenolics, 68 monoterpenes, 109 sesquiterpenes, five diterpenes, three triterpenoids, four sterols, two alkaloids, and 14 other compounds.15

15 ‘Multitargeting by turmeric, the golden spice: From kitchen to clinic’, Molecular Nutrition and Food Research, C. Gupta, B. Sung, J. H. Kim, S. Prasad, S. Li, and B. B. Aggarwal.

10.2. Product overview

10.2.1. Uses and applications

Food and beverages

Use of turmeric as a spice dates back thousands of years. Also known as the golden spice or Indian saffron, it is a common ingredient in many cuisines across South-East and Middle- East Asia. While popular in savoury dishes (for example, curries and gravies), it is also used in some sweet dishes. It can be used dry or fresh, although dry is the more popular form across the world, mostly as a powder. Some Indian dishes use the leaf of the plant.

It is used primarily as a standalone spice in South Asian and Middle Eastern cooking, but also in combination with other spices (for example, berbere, Indian curry powder, Cambodian kroeung). It lends curry its distinctive yellow colour and flavour and is used as a starter ingredient in most Indian and Persian dishes. In Indonesia, the turmeric leaves are used for Padang curry base. In Thailand, the fresh turmeric roots/rhizomes are used in soups. In South Africa, turmeric gives its traditional rice its golden colour.

Turmeric is also used as a colouring agent in many products, including cereals (GM’s Trix cereal without artificial colours uses turmeric as one of the natural colourants), popcorn, sauces (for example, mustard), cheese, margarine, yoghurt, chicken broths, and gelatine. Turmeric is also used in manufactured food products such as canned beverages, dairy products, baked products, ice cream, yellow cakes, yoghurt, orange juice, biscuits, and many more. Its use is increasing with more and more dishes/products adding turmeric, either as a natural food colourant or for its many nutrient properties. Turmeric milk is common in Indian households for treating colds and other ailments. Turmeric is also an additive (E100) and used to protect food from sunlight. The latest additions to the list are turmeric-infused teas and lattes.

Beauty and cosmetics

Turmeric has been used in cosmetics for centuries. As a natural anti-inflammatory and a good antioxidant, it is being used in various beauty regimens and cosmetics across the world. It is claimed to help control acne and slow skin aging. Some beauty products have turmeric as a key ingredient, such as turmeric masks to exfoliate and remove dead skin, serums, cleansers and soaps. Turmeric is used as an ingredient in some all-natural toothpastes, as it also helps whiten teeth. As turmeric inhibits fine hair growth, it is also used in many developing nations as an alternative to waxing or epilating.

Other uses and applications

Another key use is in the traditional and natural health supplements industry. Turmeric is used in traditional medicine to treat a variety of internal disorders, such as asthma, rheumatism, sinusitis, indigestion, throat infections, pneumonia and colds, and is also used to treat and cleanse surface wounds.16 Many South Asian countries use it as an antiseptic for cuts, burns, and bruises, and an antibacterial agent. In traditional Chinese medicine, it is used to treat diseases associated with abdominal pain.

While not all the health benefits of turmeric have been clinically proven, this compound has been known to reduce chronic pain and inflammation and to slow the effects of Alzheimer’s disease. In most traditional medicines, turmeric is used in the form of an essential oil to help

16 Herbal Medicine: Biomolecular and Clinical Aspects, 2nd edn, Benzie IFF, Wachtel-Galor S, 2011.

with digestion, improve heart health, prevent hair loss, strengthen the immune system, among other things.

Yellow turmeric can be used in both food supplements and herbal medicinal products in Europe. In herbal medicinal products, its use is limited to digestive health. As a supplement, it is used for digestive health, joint health and liver health, and as an antioxidant.

Turmeric can also be used as a dye, although because it does not provide colour fastness, it has limited use in the clothing industry. It is still used to some extent in the Indian textile industry. It can be used in chemical analysis to check for acidity and alkalinity.

Figure 31 shows the US Department of Agriculture (USDA) nutrient database for ground turmeric.

Figure 30: USDA nutrient database for ground turmeric

10.2.2. Issues/challenges facing the product

The market is not facing any legal issues, although there are some product adulterations in the supply chain. Studies have reported the mixing of Curcuma zedoaria, a wild relative of turmeric, into turmeric powder due to its close resemblance to turmeric. Metanil yellow (C18H14N3NaO3S) is a toxic azo dye that has been added to turmeric powder to mimic the appearance of curcumin when the curcumin content is low.17 Many countries now have stringent standards to ensure their imports are pure.

17 Evaluation of Turmeric Powder Adulterated with Metanil Yellow Using FT-Raman and FT-IR Spectroscopy, Sagar Dhakal, Kuanglin Chao, Walter Schmidt, Jianwei Qin, Moon Kim, and Diane Chan.

Like all plants, turmeric is also prone to pests and diseases, primarily leaf spot and rhizome rot, both of which result in plant wilting but can be prevented using bordeaux mixture.

10.2.3. Supply

Production and cultivation

Being a tropical plant, turmeric needs temperatures of 20–30°C and considerable water (1,000–2,000 mm annual rainfall or supplementary irrigation). It can also grow in subtropical regions. It is very sensitive to low temperatures and is typically grown in well-drained loose and loamy soil. Heavy black, clay or waterlogged soils are unsuitable for rhizome development. It is a perennial plant and each plant grows to a height of about 1 metre. It produces larger and better rhizomes in the open ground where it is exposed to the sun.

Plants are gathered annually for their rhizomes. Some of them are reseeded for the following season. They are typically planted with spacing of 25 cm X 30 cm and covered with soil or manure. The optimum spacing is 45–60 cm between rows and 25 cm between plants. One hectare of turmeric cultivation requires a seed rate of 2,500 kg/hectare. Depending on the soil and weather conditions, 15 to 25 irrigations are required in medium-heavy soils while 35 to 40 are required in lighter soils.

Rhizomes are harvested nine to 10 months after planting. The lower leaves turning yellow or stems drying and falling over are indications of maturity. The rhizomes are tuberous, with a rough and segmented skin and, like onions and potatoes, they mature beneath the foliage in the ground. They are yellowish-brown with a dull orange interior. They are usually 2.5 cm to 7cm in length and about 2.5 cm in diameter. The harvested rhizomes are boiled and sun- dried for seven to eight days before they are ground for turmeric, but they can also be used fresh.

10.2.4. Global production

Yellow turmeric is a native of India. It is also grown in Pakistan, Nepal, Sri Lanka, China, Japan, South Korea, Malaysia, Myanmar, Vietnam, Thailand, Philippines, East and West Africa, the South Pacific islands, the Caribbean and Central America.

Global production of turmeric is estimated to be about 1.3 to 1.5 million tonnes, and India accounts for the bulk of this (see Table 25). India is also the main user of its own production. As Figure 32 shows, it is primarily cultivated in the states of Telangana, Andhra Pradesh, Maharashtra, Orissa, Tamil Nadu, Karnataka, and Kerala.

Table 25: Turmeric production in India by area and volume, 2012/13–2016/17 Year 2012/13 2013/14 2014/15 2015/16 2016/17 Area 194,330 207,570 178,470 183,480 193,390 (hectares) Production 986,690 1,092,630 846,250 967,060 1,051,160 Volume Source: Spice Board, Government of India

Figure 31: Major spice-producing states in India by area and production volume Source: Spice Board, Government of India

The next-largest producers of turmeric are China and Myanmar, followed by Nigeria, with about 3% of the global annual production. Global turmeric production is forecasted to grow 6–7% annually until 2021.

The global market for curcumin, an active compound in turmeric that is driving its use in the herbal foods supplement industry, is expected to grow 12–15% annually. This is also expected to drive the growth of turmeric production and supply. North America is the largest market for curcumin, followed by Europe.

10.2.5. Current Australian landscape

Turmeric cultivation hardly exists in Australia (a Queensland ginger farmer grew his first commercial cultivation last year). Should Australia decide to cultivate turmeric commercially, it needs to be planted during the warm months, preferably September or October. In the case of cooler climates, turmeric needs to be planted in glasshouses. Like all herbaceous perennials, clumps of turmeric need to be broken up and fresh pieces planted every three to four years.

Australia’s turmeric imports have been growing fast. Between 2015 and 2016, value growth was over 50% and volume growth was 16%. Australia imported 1,517 tonnes (US$3.3 million) in 2016 compared to 1,308 tonnes (US$2.2 million) in 2015. While the value of imports may not be high, which is standard for the spice industry (for example, Australia only imported 79 tonnes of saffron in 2016), the turmeric industry is growing fast and the trend is expected to continue. India is by far the biggest import market for Australia, followed by Malaysia, South Africa, the US and Sri Lanka (see Figure 33).

Figure 32: Markets supplying turmeric to Australia by value (US$000) Source: TradeMap, International Trade Centre

10.2.6. Retail market prices

Turmeric is sold widely in countries where it is produced. In India, customers can buy both powder and rhizomes. Turmeric’s high demand is also affecting price, as demand is greater than supply. Table 26 shows that although India exported the same quantity of turmeric in 2015–16 as in 2012–13, prices rose 66% over the period.

Table 26: India’s exports of turmeric by volume and value, 2012/13–2016/17 Turmeric 2012/13 2013/14 2014/15 2015/16 2016/17

Volume 88,513 77,500 86,000 88,500 116,500 (tonnes)

Value (US$ $86.672 $104.148 $116.268 $143.963 $193.985 million)

Table 27 shows the wide variation in retail prices between India and China and the US.

Table 27: Retail prices of turmeric powder Country Estimated Price (US$/kg) Estimated Price (A$/kg) India 3.0–4.5 3.9–5.8 US 18–50 23–65 China 4.0–5.0 5.1–6.3 Retail prices are based on top online grocery stores in the respective countries – but prices could be lower in store. US prices are from store checks. It’s possible to buy wholesale quantity at much lower prices, for instance via e-commerce platforms like Alibaba in China.

US prices vary vastly from online to in store as in-store products are usually small spice bottles of 2–3 ounces (57–85 grams) sold for US$3.99.

10.2.7. Illicit trade or other issues

Studies have reported the mixing of Curcuma zedoaria, a wild relative of turmeric, into turmeric powder due to their close resemblance. Metanil yellow (C18H14N3NaO3S) is a toxic azo dye that has been added to turmeric powder to mimic the appearance of curcumin when the actual curcumin content is low. Many countries now have stringent standards to ensure their imports are pure.

10.2.8. Demand

Export market

Worldwide, 142,395 tonnes of turmeric were exported with a value of US$253.9 million in 2016 (see Table 28). As noted, the top exporting nations for turmeric are India, Indonesia, Myanmar, the Netherlands, the UK, and Ethiopia. India is also the largest consumer (see Figure 34). The top export destinations are the US, Iran, UAE, Malaysia, the UK, Saudi Arabia, Bangladesh, Sri Lanka, and Germany.

In 2016–17, India's domestic market witnessed poor demand but exports were higher than in the previous year. In 2016 turmeric shipments rose 29.85% due to increased demand from North America and Europe. Prices are a little erratic as demand is starting to outstrip supply (despite some new plantations) and poor weather has resulted in lower crop yield in some Indian states.

Table 28: Global turmeric exports by value and volume, 2016 Exporters Value Exported (US$000) Quantity Exported (tonnes)

World 253,949 142,395 India 179,544 102,164 Indonesia 11,708 8,309 Myanmar 11,032 11,472 Netherlands 6,493 2,013 UK 5,537 1,072 Ethiopia 4,217 4,481 Source: TradeMap, International Trade Centre

Figure 33: Turmeric exporters by value, 2016 (US$000) Source: TradeMap, International Trade Centre

Import market

Turmeric is imported as a powder or whole rhizome, which is then processed into powder or oleoresin by flavour houses or the industrial sector. Rhizomes come as fingers, bulbs or splits. Fingers are the secondary branches from the mother rhizome; the bulb and splits are the bulbs cut into halves or quarters before curing. The fingers are 2–8 cm long and 1–2 cm wide, and because they are easier to grind than the more fibrous bulbs and splits, they command a higher price. Rhizome quality is judged by a clean and smooth skin, uniform skin and flesh colours, and a clean snap when broken. Turmeric cleanliness specifications for import pertain to whole rhizomes (source: FAO).

The largest importers of turmeric are the US, India, Iran, Malaysia, the UK, Bangladesh, Germany, Japan, UAE, and the Netherlands (see Table 29).

Table 29: Turmeric importers by value and volume, 2016 Importers Value Imported (US$000) Quantity Imported (tonnes)

World 244,967 136,418 US 30,881 7,992 India 25,958 15,483 Iran 19,649 13,984 Malaysia 10,851 7,077 UK 9,971 4,409 Bangladesh 8,934 6,777 Germany 8,851 3,531 Japan 8,775 3,626 United Arab Emirates 8,575 7,980 Netherlands 7,594 3,061 Source: TradeMap, International Trade Centre

A top importer of turmeric, the US imports mainly from India, China, Fiji, Indonesia, and Jamaica. Turmeric’s growth in the US is from multiple channels and applications (for example, food, natural colourant, beverages). Its largest growth is in the herbal supplement industry. As more consumers move towards natural health supplement and dietary products, turmeric’s growth is no surprise. US sales of herbal supplements grew 7.7% in 2016, the 13th consecutive year of growth for herbal supplements. US consumers spent an estimated $7.452 billion on herbal supplements in 2016, roughly $530 million more than in 2015. Sales of turmeric, including standardised extracts with high curcumin levels, grew 85.5% and exceeded $22 million in the mainstream retail outlets channel, putting it at number 10 in that channel. In 2016 in the natural and health food outlets channel, turmeric took the number one spot, with sales of $47.6 million. This represented a 32% increase from 2015 (source: American Botanical Council, HerbalGram) The use of turmeric is also increasing in other channels, most notably as a food colourant and in beverages (for example, Starbucks turmeric latte).

Consumers are increasingly using health products to prevent diseases by adding supplements to their regular diet. The European food supplement market is projected to grow by about 9.5% in the next few years and is estimated to be a €7.9 billion market by 2020. The top three European countries in food supplement markets are Italy, Germany, and Russia. Eastern Europe markets are growing rapidly. Belarus’s food supplement market increased by almost 400% from 2010 to 2015, from €3.1 million to €15.5 million. According to Euromonitor’s forecast data, Eastern European countries such as Romania, Turkey, Bosnia- Herzegovina, Russia, and Macedonia are projected to be the fastest-growing markets. The top 10 European markets for food supplements are Italy, Germany, Russia, the UK, France, Poland, Norway, Finland, Belgium, and Spain (source: Euromonitor).

Figure 34: The top European importers of turmeric (Curcuma longa), 2011–15 (’000 tonnes) Source: Eurostat

10.2.9. Consumer perception

Turmeric is considered a superfood. Consumers’ perception and awareness of turmeric have grown tremendously in the past couple of years. Google, which tracks food trends through its search engine, claims searches for turmeric surged 82% from December 2015 to January 2016. This shows consumers are increasingly looking for different ways to consume turmeric, from golden milk to smoothies, salad dressings, and juice. Given turmeric is associated with plenty of health benefits, this trend could continue for a long time. In Asian countries, turmeric has always been associated with digestive and immune system health.

Customers are increasingly using immune support and digestive health products to improve their overall health. Digestive health supplements are used to combat poor diets. This phenomenon is especially popular in developed regions such as Western Europe and the US. This creates further opportunities for turmeric/Curcuma longa supplements.

Customer perceptions about the health benefits of turmeric include:

• anti-inflammatory – helps with digestive health, liver issues, and skin diseases and wounds. Curcumin supplements are also used to provide pain relief for arthritis. Turmeric is a natural liver detoxifier • antiseptic – turmeric is a natural antiseptic and antibacterial agent, useful in disinfecting cuts and burns • antioxidant – curcumin is a powerful antioxidant. Antioxidants can fight free radicals and may reduce or even prevent some of the damage they cause • immune health – turmeric contains a substance known as lipopolysaccharide, which helps stimulate the body’s immune system. Its antibacterial, antiviral, and antifungal agents also help strengthen the immune system • Cholesterol – research has proven that simply using turmeric as a food seasoning can reduce serum cholesterol levels • diabetes and heart disease – there are claims that curcumin can safeguard against insulin resistance and help bring down high blood sugar levels • Alzheimer’s disease prevention – turmeric supports overall brain health by aiding the reduction of plaque build-up in the brain and improving the flow of oxygen, which can prevent or slow the progression of Alzheimer’s disease • Anti-cancer – there has been a great deal of research on turmeric's anti-cancer properties, but results are preliminary. Evidence from test-tube and animal studies suggests that curcumin may help prevent or treat several types of cancers, including prostate, breast, skin, and colon; however, further research is needed.

10.2.10. Retail Market value

Turmeric is exported either as a powder or rhizome. Average export prices range from US$1,050–1,550/tonne depending on supply and demand factors. Organic turmeric trades at much higher prices – upwards of US$2,000/tonne.

10.2.11. Legislative and regulatory environment

The International Organisation of Spice Trade Associations (IOSTA) is the common platform in the spice industry and is made up of spice associations around the world. IOSTA has a set of guidelines on best practices/regulations that need to be followed by farmers during pre- production, production, harvest, and post-harvest times. For example, contaminants such as heavy metals, mycotoxins or pesticide residues are best mitigated through suitable controls in the growing and drying area. The guide also aims to help producers prevent the occurrence of contaminants or to ensure that, if present, the levels are acceptable from a food safety and legislative perspective.

In the US, turmeric must follow the same set of regulations as for all imported food products/ingredients. Under the provisions contained in the Federal Food, Drug, and Cosmetic Act, importers are responsible for ensuring that the products are safe, sanitary, and labelled according to US requirements. They are also subject to Food and Drug Administration (FDA) inspection at the port of entry. In addition, all spices imported to the US must adhere to the American Spice Trade Association (ASTA) regulations on adulteration, allergens, contaminants, and cleanliness. ASTA follows HACCP (Hazard Analysis and Critical Control Points), the internationally recognised and recommended approach to ensuring food safety. HACCP is applicable to the identification of all microbiological, chemical, physical, and other hazards affecting product safety.

In the EU, the specifications vary depending on the usage. If turmeric is being imported for use in the herbal supplement/medicine industry, claims should follow those specified by the European Community Herbal Monograph. There are strict legal requirements in place for this industry. Monographs list standards on the production of ingredients for herbal medicinal products and provide information on the claims that may be made for these ingredients. They include scientific information on uses, effects, and counter-indications. Producers of food supplements may not make medicinal claims, hence their claims can be more along these lines: ‘Turmeric and ginger may help to manage inflammatory responses’.

10.2.12. Trading channels

As with all commodities, trading channels for turmeric vary by country. In India, the largest producer, trading is managed at several regional centres, as well as the large Indian commodity exchange centres: the National Commodity & Derivatives Exchange Ltd (NCDEX) and the Spices and Oilseeds Exchange Ltd. Figure 36 shows the trading channels for turmeric for the supplements and herbal medicinal market.

Figure 35: The market channels for turmeric (Curcuma longa) for health uses Source: CBI

10.3. Opportunities and threats

10.3.1. Opportunities

Considered a superfood, turmeric was a top trending flavour in 2017. The superfood trend isn’t slowing. There was a 40% increase in new product launches in 2015 using superfood and beverage ingredients. At present, turmeric supplies are running short compared to demand, leading to price increases.

Turmeric is loaded with antioxidants and boasts of anti-inflammatory, antiseptic, and antibacterial properties. It also provides health benefits linked to cholesterol reduction and diabetes management. As well as its use in Asian and Middle Eastern cuisines, turmeric is being used in cleansing smoothies, as a dietary supplement and in teas and lattes. Turmeric latte (turmeric milk is popular in Asia as a medicinal drink) started as a fad in Europe using just plain milk, but Starbucks added espresso to the mixture to create a new drink and sales so far have been strong. Also, endorsements from celebrities like Gwyneth Paltrow (such as her recipe for turmeric latte) have helped boost the spice's profile as an alternative medicine.

In 2016, there was a 21% increase in new product launches containing turmeric (for example, Arya sparkling water with curcumin) (source: American International Foods Inc.). The growing trend for healthy products and clean labels is driving up usage not only for turmeric but also other healthy products. Currently, the food and beverage industry is witnessing an increase in earthy, floral, and plant-based flavours. Hot and spicy flavours are also growing in popularity due to increased customer interest in global cuisines. Even alcoholic beverages are infusing spices to their existing product line, creating spicy versions of whisky and bourbon. Turmeric is also increasingly used as a natural colourant in the food and beverage industry.

Australia can tap into the turmeric industry as both an ingredient/flavouring/colouring agent in food and beverages and a natural health supplement. More than 60% of all Australians use some type of supplement, and the Australian complementary medicine industry reportedly generated $4.7 billion in revenue in 2016, up from $3.5 billion in 2014. While multivitamins and fish oil are generating the most revenue, there is growing demand for herbal medicines derived from plants. Customers are increasingly using immune support and digestive health products to improve their overall health. Popular in Europe, the US, and picking up in other parts of the world, this trend would create further opportunities for Australia in the turmeric/Curcuma longa supplement industry.

Turmeric is also making waves in the skin and cosmetics industry. Even companies like Estee Lauder have serums with turmeric as an ingredient. Turmeric’s strong growth is expected to continue for now. Considering the high prices in the export market and the overall increase in price over the years, turmeric cultivation could easily fit AgriFutures needs in the domestic and export market.

10.3.2. Threats

Turmeric’s many benefits have not yet been scientifically proven. While some benefits have been proven, such as its anti-inflammatory and antiseptic properties, other claims, including anti-cancer, have not been sufficiently proven. Further research is underway and is required, and the results could change the growth of and demand for turmeric.

Turmeric is a labour-intensive product and developing nations can afford to lower their production costs unlike a country like Australia. However, Australia can use the same mechanised process and labour balance as its ginger industry uses to overcome the labour issue. Being a commodity, prices are erratic and can affect the production and labour costs.

10.4. Conclusions and recommendations

While there is no denying turmeric’s growth in the past few years, researchers are still investigating curcumin, a compound derived from turmeric which has been shown to have anti-inflammatory, antioxidant, and anti-carcinogenic properties. Research has shown that turmeric can help prevent or slow Alzheimer’s disease but the tests involved ingesting a significant amount of turmeric, not just small quantities in teas and foods. This explains its fast growth in Europe and the US in the natural health supplements sector and suggests that the product could offer significant opportunities for producers.

Curcumin is the key where turmeric is concerned, especially in the herbal/natural nutraceutical supplement industry. Some turmeric roots have a very low percentage of curcumin (2–5%) whereas others have as much as 6–8%. The highest recorded amount is 10.2%. Any level above 5% is considered excellent in this sector.

Ginger and turmeric follow similar cultivation methods and have similar climate and soil requirements. Both are labour intensive, but mechanical pullers and diggers can be used during production. Unlike developing nations where the process is mostly manual, Australia can use mechanised planting methods (for example, modified potato planters). Australia already has significant ginger cultivation: about 8,000 tonnes in 2016–17 (source: Australian Ginger Industry Association). Data shows ginger yields are forecasted to grow from 8,000 to 12,000 by 2021. Most (80%) of the product is sold fresh domestically while 20% is sold to the domestic processing sector. Since the farmers are already familiar with the cultivation process, not much education and training would be required for them to enter the turmeric industry. Ginger is currently grown in the Sunshine Coast and Wide Bay regions of South East Queensland, Northern New South Wales and North Queensland. These locations would be ideal for turmeric cultivation.

4. Snails

10.1. Introduction

Snails, which belong to the Gastropoda class within the phylum Mollusca, are farmed/cultivated (heliciculture) for human consumption, as well as for use in other industries, specifically beauty and cosmetics. The most common varieties of edible snails are Cornu aspersum (previously known as Helix aspersa) and Helix pomatia. They are commonly referred to as escargot (French for snail). Snails range in size, from microscopic molluscs to Achatina achatina, the largest known land gastropod. There are also thousands of species of sea snails, as well as freshwater snails, and land snails.

Snails that are consumed by humans include:

• Cornu aspersum – native to the Mediterranean region, but now common in the US and several other countries including South Africa, New Zealand, Australia and Argentina, this variety of snail is also called the French petit gris or escargot chagrine. It is adaptable to different climate conditions and has a lifespan of two to five years. It is easy to farm and less risky than other varieties. It measures 30–45 mm.

Figure 36: Cornu aspersum • Helix pomatia – another common variety, this snail is also known as the Roman or Burgundy snail. Native to Europe, it is typically found in mountains, valleys (up to about 1,800 metres), vineyards and gardens. Helix pomatia is preferred in the culinary world for its larger size and flavour profile. It can measure 45 mm across the shell.

Figure 37: Helix pomatia

• Otala lactea – measuring 26–35 mm in diameter, this snail is also called the milk/vineyard snail. This species of snail is native to Europe and parts of North Africa and has been introduced to the US, Cuba and Australia.

Figure 38: Otala lactea

• Iberus alonensis – this Spanish variety measures about 30 mm across the shell.

Figure 39: Iberus alonensis

• Capaea nemoralis – measuring about 25 mm, this variety survives in several habitats, from forests to sand dunes, and is native to Central Europe. Also called grove snail, it is closely related to the white-lipped snail, Capaea hortensis, and shares much the same habitat, and has a similar shell colour and pattern.

Figure 40: Capaea nemoralis

• Capaea hortensis – the white-lipped snail measures about 20 mm across the shell and is native to Central and Northern Europe. It can survive in colder places than can Capaea nemoralis. Both varieties are not very popular in the culinary world due to their flavour profile not matching that of the popular escargot varieties. Both these snails take a longer time to grow and are smaller at maturity.

Figure 41: Capaea hortensis

• Otala punctata – a land snail that is typically cooked only in Southern Spain, it measures about 35 mm.

Figure 42: Otala punctata • Eobania vermiculata – also called the chocolate-band snail, this species is found in the Mediterranean region from Spain to Crimea. The shell width can be 22–32 mm.

Figure 43: Eobania vermiculata

• Helix lucorum – found in the Eastern Mediterranean region (Italy and from Yugoslavia to Turkey) and Israel, this variety measures about 45 mm across the shell and is sometimes called escargot turc.

Figure 44: Helix lucorum

• Helix aperta – commonly known as the green garden snail, it is native to Europe, primarily near the Mediterranean Sea, and North Africa. It measures about 25 mm across the shell. Sometimes known as the burrowing snail, it is found above ground only during rainy weather. In hot, dry weather, it burrows 8–15 cm into the ground and becomes dormant until rain softens the soil. This species represents a potentially serious threat as a pest that could negatively affect agriculture, natural ecosystems, human health, or commerce.

Figure 45: Helix aperta

• Theba pisana – the white garden snail, or Mediterranean snail, is native to the Mediterranean region but has become an invasive species in many other countries worldwide. It is a well-known agricultural pest in numerous parts of the world. It measures up to 20 mm across the shell and generally lives in coastlands, in or near sandy habitats. This snail does not survive serious winter frosts.

Figure 46: Theba pisana

• Sphincterochila candidissima – also called the cargol jueu, this variety measures about 20 mm across the shell.

Figure 47: Sphincterochila candidissima

• Achatina fulica and other Achatina species – the giant African snail can grow up to 326 mm and is native to the Sahara in East Africa. In many places it is a serious agricultural pest that cause considerable crop damage. The US Department of Agriculture (USDA) has banned the importation and possession of live giant African snails.

Figure 48: Achatina fulica

10.2. Product overview

10.2.1. Uses and applications

Snails are used in the culinary and the beauty and cosmetic industries.

Food

Snail consumption is very common in Europe. They are considered delicacies in many cuisines. Nutrient profiles vary depending on the type of snail under consideration but in general, snail meat contains protein, fat (mainly polyunsaturated fatty acid), iron, calcium, magnesium, phosphorus, copper, zinc, and vitamins A, B6, B12, K and folate. It contains the amino acids arginine and lysine at higher levels than in a whole egg. Healthy essential fatty

acids such as linoleic and linolenic acids are present. The high-protein, low-fat content of snail meat makes it a healthy nutrient food choice. Snails are a good source of iron, essential for building red blood cells and carrying energy around the body. Snails also supply a little Omega-3, though nowhere near the amount in fish.

Escargots are usually served as a starter in France, Spain, and Portugal, and are a typical dish in the Catalan region of Spain and in the North African countries of Morocco and Algeria. In Greece and Italy, snails are consumed in a number of meals such as pastas and even used in the preparation of sauces. To cook snails, they must be fasted for a few days to eliminate their viscera. They are then cooked and in many cases placed back in their shell for serving. Escargots are prepared using garlic and butter. Herbs like dill and parsley are also common in snail dishes. Snail eggs are a delicacy, often consumed in the same way as caviar. Snails are also increasingly being used in mainstream dishes, such as stews, gnocchi and paella.

Beauty and cosmetics

Snail slime is naturally rich in vitamins, proteins, and substances such as glycolic acid, allantoin, collagen, copper peptides, antimicrobials, proteoglycans, and elastin – all of which are popular ingredients in cosmetics, leading to a boom in the beauty and cosmetics industry, especially over the past few years. The slime is filtered multiple times to increase its concentration and ensure its purity. Some snail slime products claim to contain as much as 97% snail secretion filtrate.

Mucopolysaccharides like hyaluronic acid are naturally present in connective tissue and are important for hydration and lubrication. They are present in snail secretions, which has resulted in the use of snails in skin creams for wrinkles, dry skin, and acne. Snail secretion contains high levels of antioxidants, which calm inflammation of the skin and promote healthy collagen production. Snail secretion filtrate is widely used in Korean beauty products such as serums, facial masks, moisturisers, and fading creams. In Thailand, snail spas have grown in popularity and have now spread to other Asian countries including Korea and Japan. During the session, living snails are put on the client’s face and left to slither around. South Korean skincare brands that manufacture snail cream have rapidly expanded their presence in the US since 2011 (Euromonitor).

Other uses

The Muricidae family of snails produces a secretion that is a natural dye. This dye has been used across the world since the ancient Roman civilisations; however, it is now used only in Central America. In addition to producing the ancient dye Tyrian purple, these snails form the basis of some rare traditional medicines that have been used for thousands of years. While these traditional and alternative medicines have not been chemically analysed or tested for efficacy in controlled clinical trials, a significant amount of independent research has documented the biological activity of extracts and compounds from these snails. In particular, the Muricidae produces a suite of brominated indoles with anti-inflammatory, anti-cancer, and steroidogenic activity, as well as choline esters with muscle-relaxing and pain-relieving properties. These compounds could explain some of the traditional uses for wound healing, stomach pain, and menstrual problems.18 The Italian pharmaceutical industry is witnessing a growing interest in snail slime products in various medications from children’s cough syrups to antacids.

18 Are the Traditional Medical Uses of Muricidae Molluscs Substantiated by Their Pharmacological Properties and Bioactive Compounds? Kirsten Benkendorff, David Rudd, Bijayalakshmi Devi Nongmaithem, Lei Liu, Fiona Young, Vicki Edwards, Cathy Avila, and Catherine A. Abbott

10.2.2. Issues/challenges facing the product

Some of the biggest challenges facing snail production are predators, climatic conditions, and human activity. Some predators of snails include insects (including beetles, termites, cockroaches, millipedes, centipedes, crabs, crickets), reptiles (lizards, snakes), amphibians (frogs, turtles), rodents (mice, rats), birds (crows, ducks) and even people. Snails generally require low/moderate temperatures and any high temperature is a serious threat to their population. Similarly, they enjoy moist and cold environments with a relative humidity about 70–90%. Dry air results in the death or hibernation of snails. Even excessive air movements can result in severe dehydration. Human threats in the form of pesticides and fertilisers can affect their population. A closed pen can overcome some of these issues and help maintain production volumes.

10.2.3. Supply

Production and cultivation

Heliciculture or snail farming is the process of cultivating/growing land snails specifically for human use, as food, cosmetics or pharmaceuticals. Dry, heavy or clay soils don’t work well for snail farming. Snail farming depends a lot on soil temperature, humidity, and composition. Soils should be maintained around 18–27°C and moisture levels should be around 80%. Many snails die after the breeding season as they lose substantial weight laying the eggs. Soils with too much sand do not contain enough water. Soil that contains 20–40% organic matter is good, and pH7 is suitable.

Population density affects successful snail production. Pens should contain no more than one kilogram (in snail weight) per square metre. Snails tend not to breed when packed too densely or when the slime in the pen accumulates too much. A pen can be made out of galvanised sheet metal, wire gauze, wood, or block material. Pens need to be fenced or covered to prevent predators. To measure and maintain the humidity levels, a sprinkler system and equipment are important. A pipe network can be used, too.

Snails can only mate with another snail of the same species to lay eggs and they are hermaphrodites. In tropical climates, snail mating can take place several times a year. Nevertheless, snails can be picky and may not mate with another snail from a different origin despite being a similar species. Post mating, the snail lays the eggs within a few weeks. Snails lay eggs in batches of 30–100. Most snails need the soil to be at least 5 cm deep for egg laying. For Helix pomatia, the soil needs to be at least 8 cm deep.

It takes the Helix pomatia one to two days to lay 30 to 50 eggs. Occasionally, the snail will lay about a dozen more a few weeks later. The eggs hatch after three to four weeks. Cornu aspersum eggs are white, spherical, about 3 mm in diameter, and are laid five days to three weeks after mating. Cornu aspersum lays an average of 85 eggs in a nest that is 2.5–4 cm deep. Cornu aspersum varieties vary depending on climate and regions. In California, this snail takes nearly two years to mature. Under ideal conditions in a laboratory, some have matured in six to eight months. In Italy, it only matures in autumn. Most of Cornu aspersum's reproductive activity takes place in the second year.

Snails can be harvested when they reach a minimum size of 3 cm in diameter and a weight of about 8 grams. The full natural cycle breeding system, although more complex to set up, is the most common: on an international scale, it represents 92% of the existing snail breeding systems. Enclosures are the key to ensure a successful outcome. Enclosures/closed pens prevent the molluscs from escaping, protect the breeding farm from predators, divide the different stages in the snails’ life cycle (birth and fattening), and enable the molluscs, which are disturbed by soil acidity and impeded in their growth by the carbon dioxide exhaling from the soil itself, to breathe correctly. Several factors can greatly influence the growth of snails,

including population density, stress (snails are sensitive to noise, light, being touched), feed, temperature and moisture, and the breeding technology used. Calcium is needed in the soil levels and in their food as low calcium intake will slow the growth rate and cause the shell to be thinner.

Dryness inhibits growth and even stops activity. When it becomes too hot and dry in summer, the snail becomes inactive, seals its shell, and becomes dormant until cooler, moister weather returns. Overall, mild climates are suitable for snail farming – about 15–24°C with a high humidity of about 75–95%, as snails die when the temperature is too high and tend to hibernate when it is below 7°C.

Italy’s International Heliciculture Association recently patented a new machine called the Muller One, which extracts snail slime by immersing the creatures in a special steam bath which is much better than the old process of dunking the snails in pots filled with salt, vinegar, and other chemicals.

10.2.4. Global production

It is difficult to measure the total world consumption of snails due to the large percentage that foraged from the wild by individuals, although the International Institute of Heliciculture predicts overall consumption to be over 900,000 tonnes. About 15–20% of the overall consumption is via snail farming, while the rest comes from nature, including both land and sea snails. Snail harvesting is only allowed in Greece between the months of March and June, as the rate of wild harvesting was hurting the biodiversity of local habitats.

The most commonly farmed snail is Cornu aspersum. This is because Cornu aspersum is a highly adaptable species that is able to thrive in a range of temperatures and habitats, unlike most other species, making it less risky to farm than other species. Cornu aspersum holds an advantage over other species of snail in that it is a medium-sized snail that grows quickly. They reach maturity at two years of age in the wild and have been reported to mature in as little as six months in an idealised farm setting. Helix pomatia is the second most commonly grown snail in the escargot industry because of its preferred flavour and large size.

Snail consumption and cultivation are popular in France, the US, Turkey, China, Indonesia, Italy, Spain, and African countries including Algeria, Côte d’Ivoire, Nigeria and Ghana. Many of the snails eaten are collected from nature. Heliciculture has grown quickly in Eastern European countries from Poland to Bulgaria, and in the African countries of Tunisia and Morocco, where over 6,000 hectares are in production today. Table 30 shows that France and Spain are the main snail-consuming countries.

Table 30: Snail consumption by country, 2016 Country Annual Consumption (tonnes) France 440,000 Spain 280,000 Italy 46,000 Greece 32,000 Portugal 20,000 Rest of World 105,000 Source: International Institute of Heliciculture/Instituto Internazionale di Elicicoltura

Italy

Italy, with its outdoor farming, free-range system, has about 9,000 hectares under heliciculture and an annual turnover of approximately €300 million Euros for the entire supply chain. The Italian market for edible snails (fresh/preserved and processed) has grown by 8– 10% in the last 10 years. Over the last few years, there has been a significant increase in consumption of snails and a re-organisation of the market itself. There has also been increasing demand for snail slime in the cosmetics industry. The country has more than 4,000 producers, most raising the native-bred Cornu aspersum. Unlike France, Switzerland and Germany, over 80% of Italy's entire market currently consists of living snails, which are sold 15 to 20 days after having been picked, dried, and cleaned.

Italy produces 44,000 tonnes of live and preserved snails each year. In 2016, the industry was worth about US$213 million.

France

At present, there are over 300 snail farmers in France, with only about 5–10% of the consumption reared by the local snail farmers. Most of the snails consumed in France are either imported or not cultivated (for example, sea snails).

10.2.5. Current Australian landscape

Australia currently has snail farms but most only serve the domestic market. Cornu aspersum is the main snail grown for eating in Australia, and most snails are found only in high-end restaurants. Some farms supply as many as hundreds of thousands of snails a year to restaurants (official figures are not available). Compared to Europe, the local industry hasn’t been very successful in adding eggs to the market, despite a growing local market for snail on menus. Australia’s snail imports and exports are low compared to European countries. In 2016, Australia imported only $10,876 worth of edible snails, while exports amounted to $13,387.

Table 31 shows Australia’s import and export of snails by countries and value.

Table 31: Australia’s import and export of snails by countries and value, 2016

Source: UN Comtrade

10.2.6. Retail market prices

Prices vary depending on the type of snail and the channel where they are sold. For instance, in the UK, one kilogram of snail is sold at a wholesale price of £3–4/kg; retail price of £8/kg; and in the B2B/restaurant sector about £10–12/kg.

Table 32: Retail market prices Country Estimated Price (£/kg) Estimated Price (A$/kg) Italy 7.1 9.2 UK 10.6 13.7 Like caviar, snail caviar is expensive, with a 50 g package costing up to €100.

10.2.7. Illicit trade or other issues

Illegal trade is rampant in the snail industry, especially in the case of sea snails. For instance, the illegal trade in South African abalone (known locally as perlemoen, Haliotis midae) has soared in recent years. Poachers now steal 7 million abalones a year, up from 4 million in 2008. The giant sea snails, which can reach 20 cm in width, are mostly trafficked to Asia where they are valued as a delicacy and as a purported aphrodisiac. South Africa’s Department of Agriculture, Forestry and Fisheries (DAFF) puts the value of this illegal trade at close to $440 million a year.

10.2.8. Demand

Snail consumption is an integral part of West African and European culture. In Europe, France and Italy are the biggest markets, while in West Africa, Ghana, Nigeria, and Côte d’Ivoire are the main markets. Spain and Portugal are among the biggest European consumers of Cornu aspersum snails. Land snails, freshwater snails, and sea snails are all eaten in a number of countries (Spain, the Philippines, Morocco, Nigeria, Algeria, Cameroon, France, Italy, Portugal, Greece, Bulgaria, Belgium, Vietnam, Laos, Cambodia, Cyprus, Ghana, Malta, Terai in Nepal, China, the north-east Indian states such as Manipur and Tripura, and the US). Table 33 shows global consumption of snails by volume and Table 34 shows consumption by main consumer countries in 2016.

Table 33: Global consumption of snails by market segment, 2016 (tonnes) Category Volume (tonnes) Fresh Live Snails 390,000 Frozen 220,000 Preserved 297,000 Cosmetic/Pharmaceutical Industry 23,000 Source: International Institute of Heliciculture/Instituto Internazionale di Elicicoltura

Table 34: Global consumption of snails by country, 2016 (tonnes) Country Annual Consumption (tonnes) France 440,000 Spain 280,000 Italy 46,000 Greece 32,000 Portugal 20,000 Rest of the World 105,000 Source: International Institute of Heliciculture/Instituto Internazionale di Elicicoltura

There is a huge demand for snail slime in European and Asian countries. Italy witnessed a 46% increase in demand in 2016 due to high demand from the cosmetics industry (source: International Heliciculture Association). France consumed about 30,000 tonnes and its local production accounted for about 5–10% of this. Countries from Ireland to Kenya are getting into the snail farming business as it’s proving to be a lucrative investment.

Snail extract was discovered a few years ago and is reported to help burn wounds heal. With that discovery came a new segment and many companies, especially in Korea, started to incorporate snail slime into their cosmetic skincare products. One brand called It’s Skin claims to sell one product every six seconds (with sales of about 5 million units) across the world. The trend has caught up in neighbouring countries, particularly in Japan and China. Sales of snail-based products are also growing in the US. Snail spas are expanding across Asian countries, resulting in strong demand for snails in the Asian market as well as the European and North African markets.

Note: Consumption figures do not equal import/export and production trade balance figures as a large number of snails are not cultivated commercially. Trade of fresh sea snails is not reported.

Export market

The top exporters of snails are France, Bosnia and Herzegovina, Romania, Monaco, and Indonesia (see Figure 50 and Table 35). Despite France being the top exporter in terms of value, Monaco tops the list in terms of volume.

Figure 49: Snail-exporting countries by value, 2016 (US$000) Source: TradeMap, International Trade Centre

Table 35: Snail-exporting countries by value and volume, 2016 Exporter Value Exported (US$000) Volume Exported (tonnes)

World 79,709 25,090 France 10,407 1,803 Bosnia & Herzegovina 8,726 1,263

Romania 8,572 1,295 Monaco 7,113 9,241 Indonesia 6,706 2,561 Hungary 4,724 804 Lithuania 3,917 644 Czech Republic 3,550 303 Turkey 3,436 547 Tunisia 2,387 316 Source: TradeMap, International Trade Centre

Import market

The biggest importers of snails are France and Spain (see Figure 51 and Table 36). While France tops the imports in terms of value, Spain imports the highest volume.

Figure 50: Snail-importing countries by value, 2016 Source: TradeMap, International Trade Centre

Table 36: Snail-importing countries by value and volume, 2016 Importers Value Imported (US$000) Volume Imported (tonnes) World 66,957 24,378 France 22,312 3,132 Spain 9,407 10,208 Romania 7,637 1,111 Italy 5,097 1,153 Bosnia & Herzegovina 3,360 1,635 Portugal 2,156 1,646 Czech Republic 1,802 489 Hong Kong 1,492 397 Greece 1,448 905 Belgium 1,199 134 Source: TradeMap, International Trade Centre

10.2.9. Consumer perception

France is the world’s leading consumer of snails, followed by Italy, Spain and Germany. Nutritionally, snails are high in protein and low in fat (see Table 37). Known for being a French delicacy, escargots are becoming popular on menus across Europe, with more dishes entering the market such as snail ravioli, snail and bone marrow on toast, snail soups, snail-based sauces and snail croquettes. In the UK, for instance, snail farmers are reporting year-on-year growth in demand. For example, Dorset Snails reports that sales are up 200% since 2014.

Table 37: Nutritional values of snail meat compared to the meat of other animals

Source: Consumer’s preference of snail meat in the African community of Pittsburgh, Pennsylvania, David A.O. (2013)

While snails are slowly appearing on menus in other countries, they are more expensive than the meats of other commonly consumed animals, which is a key constraint. In addition, they are considered a delicacy and are not universally popular. Acceptance rates vary by country.

In Chile, locos made from abalone is a popular dish but is not served as much these days because overfishing has resulted in a decline in population of the sea snails.

Snails are growing in popularity in the beauty and cosmetics industry across a few countries. Snail mucus was first used in skincare products in Korea, which were an instant success. Products then made their way to the US market. Initially, the ingredient wasn’t advertised by companies as they were worried that it would deter customers. Snail-based products are gaining popularity today in the US, leading to more manufacturers advertising the presence of snail mucus in their products as customers are more willing to try anything that may work on their skin. The all-natural trend is aiding its acceptance and growth. Cornu aspersum muller glycoconjugates is the technical name for the snail slime that is filled with beauty enhancers like hyaluronic acid, glycoprotein enzymes, glycolic acid, antimicrobial and copper peptides, proteoglycans, and elastin.

Overall, perceptions of snails are changing in some markets. Given that food and cosmetic trends adapted in the US often spread worldwide, snail-based products may catch up in other countries, especially if they prove effective with anti-aging and wrinkle control. The global anti-aging market was worth $250 billion in 2016 and is estimated to grow at a compound annual growth rate of 5.8% to reach $331 billion by 2021.

10.2.10. Retail market value

Snail exports vary widely, depending on the country of origin. On average, prices range from US$5,500–6,500/tonne depending on supply and demand. Prices range from US$2,000– 3,000/tonne in Asian/Eastern European nations. In the US, restaurants pay about US$12–19 per can of snails, sometimes even higher (some pay about US$50 for about half a kilogram of fresh snails).

10.2.11. Legislative and regulatory environment

Every country has its own set of rules and regulations guiding snail production, sales, licences, and imports. Some permits even cover what type of species can be allowed into the country.

The following broad regulations apply in the US (source: USDA):

• A PPQ 526 plant pest permit is required for the importation or interstate movement of molluscs, snails, and slugs that feed upon or infest plants or plant products. USDA permits are issued under the authority of 7 CFR 330. • USDA may permit the interstate movement of snails or slugs for research purposes, educational use in classrooms, display in zoos, and the importation for research and aquatic hobby trade. • Authorisation depends upon factors such as the risk the species poses if released to the environment, the level of containment at the research facility, and the risk of contaminants during importation. For instance, in the US, snails in the genus Achatina (for example, Achatina fulica, the giant African snail) are specifically prohibited for both interstate movement and importation into the US. The giant African snail poses a threat to humans and plants. This snail species group is not only strictly prohibited from entering the US but is safeguarded when discovered. • Decollate snails (Rumina decollata) and aquatic snails in the family Ampullariidae (for example, Pomacea canaliculata, channeled apple snail), with one exception, may not be imported or moved interstate except for research purposes into an APHIS-inspected containment facility. One species complex in the family Ampullariidae, Pomacea bridgesii (P. diffusa) may move interstate without a permit because these snails are not known to be agricultural pests but are primarily algae feeders. • An import permit is required for aquatic snails in order to verify species and examine shipments for contaminants that are agricultural pests. • Diseased snails that carry or vector human or livestock diseases may be imported with only a CDC permit. • Live snails cannot be imported into the US for human consumption. Cooked, frozen, or otherwise processed snails may be imported for this purpose. USDA does not require permits for dead snails or slugs. Under 7 CFR 330.200, ‘biological specimens of plant pests, in preservative or dried, may be imported without further restriction under this part, but subject to inspection on arrival in the United States to confirm the nature of the material and freedom from risk of plant pest dissemination’. The packages cannot contain any plant material, soil, or other plant pests.

Similarly, in the UK, all food of animal origin for human consumption must meet the requirements of the food hygiene legislation, including Regulation (EC) Nos. 853/2004 and 852/2004. Snails and snail products can only be imported into the EU at a designated Border Inspection Post (BIP). The BIP must be given prior notification of the import using the Common Veterinary Entry Document (CVED). Consignments must also be accompanied by the appropriate health certificate.

10.2.12. Trading channels

Figure 52 shows the trading channels for snails in the US. The main end customers for snails and snail products are the food service/retail, cosmetics and pharmaceutical industries.

Figure 51: The main trading channels for snails and snail products in the US Source: USDA

10.3. Opportunities and threats

10.3.1. Opportunities

The market for snail caviar has steadily increased over the last decade, especially among countries in the EU. Overall, there is a higher demand than supply for snails at present. Many countries have entered the snail farming industry, where snails are farmed or caught from the wild and then exported to Europe, but there are quality issues. Nigeria, for instance, had to suspend its export of live snails as the product quality was not up to international standards set by the UK and US last year.

In addition, snails are in demand in the beauty and cosmetics segment. Croda International Plc and Clariant AG are among Europe's top suppliers of cosmetic ingredients that are turning to snail slime to tap Asia's demand for the latest skincare products that promise to combat wrinkles and slow aging. Snail mucus contains nutrients and elements that are thought to protect against sun damage, dryness, and infection. Asia generated double-digit sales growth in the first quarter for Croda. The Italian snail market experienced 46% growth in demand in the first 10 months of 2017 due to increased demand from the cosmetics industry. If Australia decides to invest in this market, it would have plenty of opportunities in the Asian as well as European and American beauty and cosmetics industry.

10.3.2. Threats

Snail production is a labour-intensive process. Once harvested, snails must be starved so that they excrete mucus, and then refrigerated until they fall into hibernation. They are then cleaned, scalded, pulled out of theirshells, and eviscerated. Prices, therefore, depend on the country of production, with Asian and Eastern European countries achieving lower price points for the export market. Within the same population and under the same conditions, some snails will grow faster than others. Cannibalisation exists, as hatched snails feed on unhatched eggs. Snails are also highly susceptible to temperature and climate changes, and the farmer needs to account for these risks/losses.

Snail slime is growing in the cosmetics industry in Korea, the US and Japan, although it is not yet popular in many other parts of the world, including Australia. The evidence for snail

slime’s effectiveness is not particularly compelling. One study found it could treat burns, while others have suggested it might reduce warts, but these were small-scale studies. Because they are live creatures, it is tough to control potency from one snail to the next. Many countries are investing in this industry to meet demand from Europe and Asia (for cosmetics), so Australia would have plenty of competition.

10.4. Conclusions and recommendations

Australia already has a few snail farms, mainly marketing to the domestic food service industry. If Australia decides to invest further in this market, the key would be snail caviar. Snail caviar has the potential to bring in a larger profit than the snail meat itself and can be focused on once the production capacity is higher. Even if Australia focuses on snail caviar, it still needs to produce snails for consumption as the caviar is just taking off in many markets. The caviar market has certain regulations. Any egg product sold in the EU has a set limit for the number of bacteria that can be on the product at the time of sale. All egg products should have no traces of salmonella, and the remainder of enterobacteria should fall between 10 and 100 colony forming unit per gram or millilitre of product (European Union, 2005). To create a safe product, a cold pasteuriser would be required. A cold pasteuriser differs from a regular pasteuriser by using only pressure, no heat, to decontaminate a product. The heat from a regular pasteuriser breaks down the bonds and proteins in snail caviar and creates a soft, unappealing product. The cold pasteuriser uses only pressure to destroy the cells of microbes while preserving the structure of the protein in the eggs.

The type of snail definitely matters in this industry. Brazil entered the snail farming industry using giant African snails, an invasive species that has a top national quarantine status in the US but is present in many countries and is used as a source of food including in China. However, Brazil had to combat severe invasion by these pests and the snail farming industry was a huge failure as a result. The least risky varieties are H. aspersa and H. pomatia, due to their quick maturity period and ability to grow in a variety of climatic conditions.

For cosmetic companies seeking to offer something new in a crowded market, snail mucus contains nutrients and elements that are thought to offer protection against sun damage, dryness, and infection. Australia can breed snails for the cosmetics industry. The market exploded in the Asia-Pacific region a few years ago, and the trend is just catching on in the US, despite entering the space a few years ago. Today, stores such as Target, Ulta, CVS, Walmart, and Amazon sell snail-based cosmetics to customers.

5. Tiger Nuts

10.1. Introduction

Tiger nuts (Cyperus esculentus), also called chufa sedge or yellow nutsedge, belong to the sedge family. Sedges resemble grass and Cyperus esculentus can be found in the wild as a weed and cultivated as a crop. In many countries, it is classified only as a weed.

A perennial plant, tiger nuts are native to Africa and also grow in the Western Hemisphere (including the US and Canada), Southern Europe (especially Spain), Africa, Madagascar, Middle East, and the Indian subcontinent. It is considered a weed in most countries, but it is cultivated in Spain, Niger, and Ghana for its edible tubers (see Figures 53 and 54). A recent study by Oxford University indicates that tiger nuts made up about 80% of ‘Nutcracker Man’s’ diet between 2.4 and 1.4 million years ago.

Figure 52: Tiger nuts plant Figure 54: Tiger nuts/chufa

10.2. Product overview

10.2.1. Uses and applications

The tubers, also called tiger nuts/chufa, are the edible part of the plant. They are not part of the nut family and are completely safe for people with any sort of nut allergies. Tiger nuts are classified based on their size (for example, micro, medium, and large). The micro nuts are not consumed. Tiger nuts are part of the staple diet in Spain and Africa, and have a high content of fibre, magnesium, potassium, vitamins E and C, and plant proteins.

Tiger nuts are used as tiger nut oil. The oil is golden-brown with a rich, nutty taste. It is extracted from the nuts using a cold press process due to its high smoking point and is used in cooking, the beauty and cosmetics industry, and traditional medicines. Tiger nut oil is high in oleic acid, vitamin E, and polyunsaturated fatty acids (linoleic acid and linolenic acid). It has higher oxidative stability than other oils due to its content of polyunsaturated fatty acids and gamma-tocoferol. The oil contains 18% saturated (palmitic acid and stearic acid) and 82% unsaturated (oleic acid and linoleic acid) fatty acids

Figures 54–56 compare tiger nuts’ nutritional profile and fat content to common food products.

Figure 53: Nutritional profile of tiger nuts compared to beef, potatoes and beef liver

Figure 54: Nutritional content of tiger nuts compared to potato and sweet potato

Figure 55: Fat content of tiger nuts compared to ground beef Figures 54–56 source: Tiger Nut (Cyperus esculentus) Commercialization: Health Aspects, Composition, Properties, and Food Applications, Elena Sánchez-Zapata, Juana Fernández-López, José Angel Pérez-Alvarez (2012)

Chufa has the highest yield of oil per hectare when compared to most sources of dietary fat, including the world’s foremost oil crop, palm oil. A palm oil tree produces 3,524 kg of oil per hectare-year from the fruit, plus 418 kg/ha-year from the kernel, for a total of 3,942 kg of dietary fat per hectare-year total. Even at the low end of the range of yields, chufa outproduces palm tree oil by 46%. Also, for a high yield, chufa produces over 150% more dietary fat.

Food

Tiger nuts are eaten raw, and can be soaked overnight before eating. They are used as a flour to bake goods, as well as in beer, spreads, and as a flavouring agent in ice creams. In Spain, tiger nuts are used in horchata (horchata de chufa), a kind of milky non-alcoholic beverage made from tiger nuts, water and sugar. Tiger nut milk can be used as a dairy

alternative in yoghurt and other fermented products. It can also be used in vegan/lactose- intolerant diets.

Tiger nut oil can be used naturally with salads or for deep frying. It is considered to be a high- quality oil that compares favourably to olive oil. There is increasing interest in chufa for health food and similar products.

Beauty and cosmetics

Tiger nut oil is used in the beauty and cosmetics industry as it has a high oleic acid content and low acidity, making it suitable for both hair and skin in the form of oil, serums, and even soaps. Due to its antioxidant properties and high content of vitamin E, it can be used in anti- aging and skin-tightening products.

Medicinal

Tiger nuts are used in alternate/traditional medicines to combat a variety of health issues. In Indian traditional medicines it is used to treat indigestion, diarrhoea, hernia and prostate issues, and control cholesterol. In traditional Chinese medicine, it is used to treat liver issues, upset stomachs, and gynaecological conditions. It is also used as a therapy against stress. Tiger nut is considered an ideal food to aid with weight loss, as it can suppress hunger pangs. It is being researched to aid with worldwide poverty issues as it’s packed with nutrition and is less expensive than some of the staple foods that are being used in the developing nations to fight malnutrition and poverty.

Animal food

In many countries including the US, chufa/tiger nuts are considered only a weed to provide feed for wildlife such as deer, turkeys and wild hogs, especially during the cold months. They are considered an important food source for migratory birds such as ducks. Tiger nuts are used as fishing bait in some countries: they are soaked for a day in water and then cooked/boiled and fermented for a couple of days.

Industrial uses

Like sesame oil, tiger nut oil can be used as an alternative source of fuel, which could be cheaper and more environmentally friendly compared to widely used fuels. Transesterification of tiger nut oil afforded methyl and ethyl esters, which had fuel properties similar to common biofuels.19

Figures 57 and 58 show the nutritional and mineral profiles for raw tiger nuts.

19 A preliminary investigation into the biofuel characteristics of tigernut (Cyperus esculentus) oil, Barminas, Maina, Tahir, Tsware, 2001

Figure 56: Nutritional profile for raw tiger nuts

Figure 57: Mineral profile for raw tiger nuts

10.2.2. Issues/challenges facing the product

The biggest challenge tiger nuts face is that it is known as a harmful weed/pest in most parts of the world, even in Africa, as it grows up over crops and causes agricultural damage unless it is cultivated properly, as in Spain, for example. Production volumes are generally low per hectare. The rust fungus Puccinia canaliculata can release a pathogen that affects the tiger nut plant, reducing its density, tuber formation, and flowering.

10.2.3. Supply

Production and cultivation

Tiger nuts are fast-growing perennial plants and grow well in a variety of soil conditions (for example, clay, clay loam, silty clay, loam, sandy gravel and sand). Production is often greatest on silty clay soils and lowest in sand. Soils with pH values between 5.0 and 7.5 give the best production. It easily grows in warm climates in moist or wet soils. The tubers can remain dormant for up to 3½ years.

Planting happens in the summer. Tubers are soaked in water for 24 to 36 hours before planting, either by hand or using a drill. In the US, planting takes place between April and July in the south. Tubers may be planted at 10–15 cm intervals along rows 60–90 cm apart, and about 2.5–4 cm deep. The plants mature within 100–125 days, and the tubers mature about 110–120 days post-emergence. If planted in the summer, it requires a 90–110 day growing period. In the US, the tubers are left in the ground for the animals as it is mostly used for wildlife/livestock feed.

The percentage of bud sprouting increases as the temperature rises within the range of 12– 38°C. No sprouting occurs at 10°C, and few tubers sprout at 42°C. The rate of sprouting increases with temperatures up to 35°C. A base temperature of 11.4°C was determined for bud-sprouting of C. esculentus tubers (Li et al., 2000). Although bunched together, each nut is attached to a thin underground stem that connects the single tuber to the growing shoot. Chufas are easy to grow and planting time must allow for 90–100 days of frost-free growing time.

Immediately after harvest, tiger nuts are washed with water to remove any sand and small stones. Once the tiger nuts have been cleaned, they are dried out in order to preserve them. This is a natural process that requires from one to three months. Temperature and humidity levels are carefully monitored during this period. The tiger nuts are turned over every day to ensure uniform drying. Small and damaged tiger nuts are removed before packaging and use (source: FAO). Cooling or freezing raw tiger nuts may slow down the biological decomposition process.

Table 38 shows the mineral and vitamin content of tiger nuts.

Table 38: Mineral and vitamin content of tiger nuts (mg/100g)

Source: University of Nigeria

10.2.4. Global production

Global production (cultivation) of tiger nuts was estimated at about 8 million kilograms in 2016.20 However, most of the tiger nuts grow wild and aren’t cultivated, and are not included in this figure.

Spain dominates the cultivated tiger nuts market. Tiger nuts have been cultivated in Spain for centuries. They are predominantly farmed around the city of Valencia: about 5.3 million kilograms are produced in this area each year (see Table 39). The annual value of tiger nut production is close to €3.3 million (source: Regulatory Council Tigernut of Valencia).

Table 39: Area dedicated to the production of tiger nuts in Valencia (square metres) Year 14/15 15/16 16/17 17/18 F Area (m2) 4,684.25 5,234.00 5,996.25 5,733.25

20 Thermal and non-thermal preservation techniques of tiger nuts' beverage ‘horchata de chufa’. Implications for food safety, nutritional and quality properties, Elena Roselló-Sotoa, Mahesha M. Poojaryb, Francisco J. Barbaa, Mohamed Koubaad, Jose M. Lorenzoe, Jordi Mañesa, Juan Carlos Moltóa.

Other countries involved in the production of tiger nuts include Nigeria, Niger, Ghana, Burkina Faso, China, India, Chile, the US, and Brazil. Cultivation is low or not accounted for in the US, where it is only grown as wildlife food. In China and India, tiger nuts are used in traditional medicines, with the rest exported to Spain. Even though it’s part of the staple diet in Africa, many African countries export to Spain.

The industry is more organised in Spain compared to other producers as the country has regulatory authorities set up to ensure quality production of the tuber compared to countries like Ghana or Niger where the production of tiger nuts happens in small farms and doesn’t have much government support. The Ghana Government is now making changes as tiger nuts have emerged as a profitable export product.

10.2.5. Current Australian landscape

The product is not cultivated commercially in Australia but it does exist as a weed (source: FAO). Products sold on the Australian market are imported from Spain (for example, Terra FirmaFoods).

10.2.6. Retail market prices

In African countries like Nigeria and Ghana, tiger nuts are available in fresh, semi-dried form in the markets, where they are sold locally and consumed even uncooked by the locals. In other markets, tiger nuts are sold in the form of nuts (peeled, unpeeled) or in other versions (flour, horchata, smoothie mix, and as a snack mixed with granola and apple).

Tiger nuts sell in health food shops around Europe. In Denmark, they are sold in a few supermarkets. Denmark also re-exports to Sweden and Norway. A 1 kg pack of dried whole tiger nuts retails for about 100 DKK (€13), while the flour sells for 150 DKK (€20).

In Spain, prices vary by size, while in the US most products sold are organic, hence the higher prices shown in Table 40.

Table 40: Retail market prices Country Estimated Price (US$/kg) Estimated Price (A$/kg) Spain 10.6–22.5 13.7–29.1 US 22–30 28.5–38.8

10.2.7. Illicit trade or other issues

At present, the market is not dealing with any illicit trade issues but there are some prime differences in how each market defines horchata. In most of Spain, horchata is a non-dairy, non-alcoholic beverage made from tiger nuts. However, when the US counts horchata sales, it includes both the traditional version made from tiger nuts and the US version, which is Mexican-influenced (rice milk and almond milk drink).

10.2.8. Demand

Tiger nuts’ new reputation as a superfood is boosting its demand in international markets, particularly in the UK, the US, and Germany. It is currently the most viable crop in Valencia, Spain, and is leading to increased profits for the farmers who have been receiving very high prices for the product. The high profits have led farmers away from traditional crops like onions and potatoes towards tiger nuts (source: AVA-ASAJA, The Valencian Association of Farmers). The demand for tiger nuts continues to rise in Spain, Western Europe, and the US,

both from horchata and its classification as a superfood and its inclusion in healthy diets. Its high fibre content, along with a high level of magnesium, potassium, vitamins E and C, and plant proteins help to combat a variety of health issues, further fuelling its growth.

There is demand for new products resulting in new innovative tiger nut categories. Organic Gemini has introduced a smoothie mix and a snack with apple, cinnamon, and tiger nuts, which is reported to be experiencing strong demand at the US organic supermarket chain, Whole Foods. Tiger nuts flour is gaining in popularity in the gluten-free community.

Currently, the US imports tiger nuts primarily from Spain but also from the UK, China and Nigeria. The demand in the US, the UK, and Germany is primarily for organic tiger nuts, resulting in a strong commitment from farmers in Valencia towards increasing production grown under organic certified methods.

Most African countries do not report earnings from tiger nuts as a separate category. Ghana reports it as part of its non-traditional export earnings, which was estimated at $2.4 billion in 2016. The government is currently involved in increasing production and tapping into the global demand for tiger nuts.

10.2.9. Consumer perception

Riding on its superfood tag, tiger nuts are selling fast in natural food stores across the US and many other countries. An in-store interview at Whole Foods showed tiger nuts are one of the latest fads to hit the store shelves. The latest trends in paleo and raw diets are resulting in a surge in demand for tiger nuts in the US.

Tiger nuts are considered a health food since their regular consumption can help heart health and activate blood circulation and prevent thrombosis. They are found to assist in reducing colon cancer risks and are suitable for diabetic patients due to their rich content of vitamins (E, C), minerals (potassium, phosphorus), and energy (protein level, fat, sugar).

Customer perception is mainly related to the product’s health benefits, but there are some beliefs which claim tiger nuts aid in boosting testosterone and sexual vitality, which haven’t been proven. Since tiger nuts are not technically nuts but tubers, they are not a common allergen and are free of dairy, nuts, grains, and seed allergies. They are not a mainstream product yet so awareness levels are relatively low.

10.2.10. Legislative and regulatory environment

Tiger nuts have the same regulatory environment as any edible tuber/vegetable. Regulations include:

• Pesticide residues are one of the crucial issues for fruit and vegetable suppliers. To avoid health and environmental damage, most countries have maximum residue levels (MRLs) for pesticides in and on food products. Products containing more pesticides than allowed are usually withdrawn from the market. • Food safety certification is often requested by European importers. The most common certification schemes accepted on the European markets are IFS, FSSC22000 and BRC. • In case the buyer does not mention any specific quality requirements, the supplier always has to follow the minimum requirement: free of damage, pests, moisture, foreign smell/taste, free of any foreign matter, etc. For the EU, this falls under the General Marketing Standards of Regulation (EU) 543/2011. In the US, all legal requirements are mentioned in the FAVIR database. The FAVIR database allows customers to search for authorised fruits and vegetables by commodity or country,

and quickly and easily determine the general requirements for their importation into the US This database includes emergency pest notifications to alert users if there is a change in the import status of a commodity or country. • For organic and Fairtrade products, the supplier needs to comply with additional environmental and legal aspects such as certification of sustainable production from agencies such as UNCTAD BioTrade Initiative, FLO Fairtrade, Fairtrade USA, and World Fair Trade Organization. In Europe, organic products can readily be exported from countries whose rules on organic production and control are equivalent to the EU's – currently Argentina, Australia, Canada, Costa Rica, India, Israel, Japan, New Zealand, Tunisia, Switzerland, and the US. For all other non- European countries, importers can have their organic products certified for import into the EU by independent private control bodies approved by the European Commission.

10.2.11. Retail market value

Tiger nuts have an export value based on the size of the tiger nut. In Europe, medium-sized tiger nuts fetch $950/tonne and more while smaller ones sell for $850/tonne or more, and large nuts are worth more than $1400/tonne.

10.2.12. Trading channels

Trading channels are still very nascent for this product, based on the region. In Spain, all production and exports are handled by the Regulatory Council, Chufa de Valencia, whereas other markets like Ghana don’t regulate the product to this extent.

10.3. Opportunities and threats

10.3.1. Opportunities

Tiger nuts are growing in popularity in the Western world, and there are currently over 1,000 tiger nut-based products for sale on Amazon.com. Three key reasons for this growth are – its potential as a non-dairy beverage, the gluten-free trend, and the growth of the paleo diet across the world. Tiger nuts are slowly entering the non-dairy milk space, even in the US (see Table 41). Califia Farms’ horchata milk contains both almond milk and tiger nut milk. Overall, tiger nut horchata products sold in Whole Foods are much more expensive than other non-dairy products like soy milk.

Table 41: US sales of non-dairy beverages by volume (gallons)

Source: IRI/DMI

Unfortunately, horchata milk in the US is not always made of tiger nuts but rather a combination of rice milk and almond milk. In Europe, on the other hand, horchata milk made from tiger nuts is growing in popularity, especially among the vegan community.

Lactose intolerance is a major concern for today’s health and wellness consumer and this is driving the need for lactose-free products, both from cow’s milk and other plant-based alternatives such as nut and cereal milks. This trend, coupled with the increase in the vegan population, is resulting in the growth of non-dairy alternatives. Other milk alternatives (except soy-based products) in the US, which include products such as almond, cashew and coconut milks, witnessed the highest growth in 2016, with value growth of 15%, to US$1.7 billion (Euromonitor data). Other dairy alternatives are expected to see the highest growth between 2016 and 2021 in both value and volume, with 9% compound annual growth rate. Americans who have become accustomed to consuming milk alternatives over cow’s milk are expected to continue their consumptions habits, while other milk alternatives are anticipated to draw even more followers. Milk alternatives, other than those dominating the market now, are expected to grow as companies put more money into the research and development of higher quality and more nutritious milk alternatives. These include products such as macadamia nut, hemp, flax seeds or tiger nut. Worldwide sales of non-dairy milk alternatives more than doubled between 2009 and 2015 to $21 billion (Euromonitor data) and continued to experience strong growth in 2016/17. China and India are boosting sales in the Asia- Pacific region, while Germany and the UK are adding to the strong growth in Europe. Overall, the US and China are the biggest markets in the world for non-dairy alternatives.

The paleo diet could also drive up sales of tiger nuts. Paleo foods are natural and organic and are nutrient-dense sources of various vitamins and minerals. These generally include granola bars, fruits, nuts, seeds and vegetables. A growing awareness about the health benefits from the consumption of natural nutrient-based ingredients has led to a change in consumer preferences toward alternative diets, such as paleo. Paleo diets are predicted to grow at 4% to 5% over the next five years.

The gluten-free trend could aid in tiger nuts’ growth, too. Global sales of gluten-free food jumped 12.6% year-on-year in 2016 to $3.5 billion, compared with overall packaged foods growth of just over 4%. Table 42 shows the growth of the global gluten-free product sales from 2012–20. The gluten-free retail market has expanded rapidly from $1.7 billion in 2011 and will reach $4.7 billion by 2020 (Euromonitor data).

Table 42: World gluten-free product sales

Strong opportunities exist in the natural health market. In the US, there are two key brands of tiger nut products – Organic Gemini and Tiger Nut USA. Tiger Nut is mostly sold online while Organic Gemini is sold online and at retailers like Whole Foods. The company purchased 175 tonnes of tiger nuts in 2015 and 650 tonnes in 2016, with sales growth of over 300% indicating a strong demand for tiger nuts. Sufficient marketing is required as the product isn’t well-known in developed nations. Organic Gemini invested heavily in the highest quality standards, obtaining certifications for organic, kosher, vegan, gluten-free, and non-GMO; implemented high-end processing technologies; and expanded its product line.

The opportunities for the product to find more commercial success are endless, as it does meet a lot of current requirements (gluten-free, dairy-free). It has a flavour profile like a coconut. Tiger nuts can be an ingredient in other snack-based products like snack bars or trail mix.

10.3.2. Threats

Tiger nuts are still not well known in many parts of the world despite the superfood tag. Most parts of the world, including some US states, still consider the plant a weed and a product for wildlife habitat despite its growth in the natural health food segment. Tiger nuts are very under-researched when compared to crops like quinoa or turmeric, especially on its health benefits to humans. Consumers are often under the impression that they must be safe for human consumption simply because they are from a natural source. The lack of mechanical harvesting technologies could limit its potential in countries with high labour rates as land preparation prior to cultivation is highly labour intensive at present.

Due to the limited information and data on tiger nuts (for example, statistics, trade), it is difficult to estimate the growth potential compared to products like sesame or quinoa.

10.4. Conclusions and recommendations

Tiger nut has growth potential as a gluten-free, dairy alternative/plant-based milk product as well as part of a paleo diet, but there’s a possibility it could remain a niche product in Australia. Its flavour profile suggests it can be used as an added ingredient in snacks and

snack bars. This may be a wait-and-watch product as it is not as popular in Australia as it is in other developed countries.

6. Moringa

10.1. Introduction

Moringa is the only genus of the Moringaceae family. This plant is native to Africa and Asia. There are 13 species that fall under the broad moringa family.21

• Moringa arborea, indigenous to Kenya • Moringa rivae, indigenous to Kenya and Ethiopia • Moringa borziana, indigenous to Somalia and Kenya • Moringa pygmaea, indigenous to Somalia • Moringa longituba, indigenous to Kenya, Ethiopia, and Somalia • Moringa stenopetala, indigenous to Kenya and Ethiopia • Moringa ruspoliana, indigenous to Ethiopia • Moringa ovalifolia, indigenous to Namibia and Angola • Moringa drouhardii, indigenous to Madagascar • Moringa hildebrandi, indigenous to Madagascar • Moringa peregrine, indigenous to the Red Sea and Horn of Africa • Moringa concanensis, indigenous to Northern India • Moringa oleifera, indigenous to sub-Himalayan tracts of Northern India.

For this study, Moringa oleifera is discussed as it is deemed a superfood in the international market.

10.2. Product overview

Moringa oleifera

Moringa oleifera, also referred to as moringa or tree of life (see Figures 59 and 60), is a drought-resistant, fast-growing tree that is native to Northern India. The plant grows well in tropical and subtropical regions and now grows across Asia, Africa, South America, and the Pacific and Caribbean Islands. It can grow naturally in the wild without supervised cultivation. While most of the plant is edible, the leaves and seed pods are currently in vogue mostly in powdered form.

21 International Journal of Molecular Studies Cultivation, Genetic, Ethnopharmacology, Phytochemistry and Pharmacology of Moringa oleifera Leaves: An Overview, Alessandro Leone, Alberto Spada, Alberto Battezzati, Alberto Schiraldi, Junior Aristil, and Simona Bertoli.

Figure 59: Moringa seed pods

Figure 58: The moringa tree, its flowers and leaf structure

Source: International Journal of Molecular Studies Cultivation, Genetic, Ethnopharmacology, Phytochemistry and Pharmacology of Moringa oleifera Leaves: An Overview.

The moringa tree goes by a number of names, including the drumstick tree. It is considered a ‘miracle tree’ as almost all parts of the tree are considered edible, making it economically and agriculturally significant. It requires minimal water and harvests in six to eight months.

10.2.1. Uses and application

Moringa leaves and powder

The green leaves are the most nutritious part of the moringa plant, being a significant source of vitamins B and C, provitamin A as beta-carotene, vitamin K, manganese, and protein, among other essential nutrients.22 Figure 61 shows the nutrients in raw moringa leaves.

The leaves of the moringa plant have been used in traditional medicines in both Asia and Africa for a long time and are known to aid in digestion and improve blood sugar and energy levels. The leaves are used in traditional medicines to treat several diseases such as malaria, typhoid fever, arthritis, diabetes, hypertension, and even aid with lactation and abortion. Currently, moringa leaves (dried and powdered) are used in a variety of products including nutritional/dietary supplements, tea, smoothies, nutritional shakes, and even in food like oatmeal.

22 Underutilized and Underexploited Horticultural Crops: Volume 4, K.V. Peter, 2008.

Figure 60: USDA nutritional profile of moringa leaves

Recent studies show moringa leaf powders contain higher amounts of antioxidants than the popular acai berries, blueberries, and goji berries in an oxygen radical absorbance capacity (ORAC) test, which attempts to quantify the TAC (total antioxidant capacity) of foods. In addition, moringa leaf powders are said to contain the essential fatty acids, Omega 3 and 6, leading to further health benefits such as immune health, weight loss, and cardiac health.

Moringa flowers

Moringa flowers are said to have a high phenolic content (1,931 mg/100 g gallic acid). Initial research studies suggest the moringa flowers are high in antioxidants and are anti- inflammatory.23 As a result, the flowers are being used in health (alternate/traditional medicines) products to treat inflammation and muscle diseases and tumours.24

Moringa seeds and seed pods

Moringa seeds (see Figure 62) and seed pods are the most popular part of the plant after the leaves. The seed pods are also called ‘drumsticks’ (hence the name drumstick tree) and are a popular part of South Indian cuisine, where they are cooked and consumed either as part of a curry or as a stir-fry dish. The seed pods or drumsticks are a good source of dietary fibre,

23 Estimation of total phenolic content, in-vitro antioxidant and anti-inflammatory activity of flowers of Moringa oleifera, Alhakmani F, Kumar S, Khan SA. 24 Moringa oleifera: A food plant with multiple medicinal uses, Phytother. Res. 2007, Anwar F., Latif S., Ashraf M., Gilani A.H.

vitamin C, potassium, magnesium, folate and manganese, and they also contain riboflavin, vitamin B6, pantothenic acid, phosphorus and copper. The seeds are consumed raw or roasted due to their high vitamin C content. The seeds are used to extract oil, in cooking, and for cleaning water.

Figure 61: Moringa seeds Source: International Journal of Molecular Studies Cultivation, Genetic, Ethnopharmacology, Phytochemistry and Pharmacology of Moringa oleifera Leaves: An Overview.

Moringa seed oil

Moringa seeds also yield an edible oil. Moringa seed oils are known as ben oil due to their high concentration of behenic acid (docosanoic acid). The oil has multiple uses. It can be used in cooking as well as in cosmetics and industrial applications. Due to its antioxidant and anti-inflammatory properties, the oil can be used both internally and externally. Externally it is used to treat wounds, scrapes, bruises, and burns, and is also used as a moisturiser for skin (for issues such as dry skin, eczema and psoriasis) and hair. In traditional medicines, the oil is used to treat rheumatic conditions. Moringa oil is also used as an ingredient in anti-aging and wrinkle reduction and acne products.

Even the roots of the moringa plant are edible. They are used as condiments and as an ingredient in traditional Asian and African medicines to relieve symptoms of toothache, among other uses.25

Other uses – industrial

While moringa is primarily used in the food /nutraceutical industries, it can also be used in the industrial sector. Moringa seeds are used for treating water.26 One method uses the seeds in a crude water-soluble extract in suspension thereby treating highly turbid and untreated pathogenic surface water. This method reduces the turbidity of the water by about 80–99.5% and even reduces bacteria by 90–99.9%. It is recommended for rural and peri-urban places where people living in poverty are drinking highly contaminated water.

In the past, the moringa plant was tested and viewed as a key to eliminating malnutrition in developing nations. Countries like Zambia are looking to the Moringa oleifera plant as one of the cornerstones to relieve its people of malnutrition. A current government project in Zambia is employing 60 people who are tending six million plants. Moringa products such as tea or food supplements are sold in Zambia and exported to other countries including the UK, China and South Africa.27

25 Moringa oleifera: A food plant with multiple medicinal uses, Anwar F., Latif S., Ashraf M., Gilani A.H., Phytother. Res. 2007; 21:17–25. doi: 10.1002/ptr.2023. 26 Bioremediation of Turbid Surface Water Using Seed Extract from Moringa oleifera Lam. (Drumstick) Tree, Michael Lea, 2014. 27 Imagine Rural Development Initiative, Zambia.

Moringa oleifera is also a favourable biofuel.28 Biofuels are alternatives to petroleum-based conventional diesel fuels. Moringa oil has a high content of oleic acid, which makes it acceptable feedstock for biofuel. The biofuel obtained from moringa oil has a high cetane number (one of the highest found in biofuels). Other properties (for example, kinematic viscosity and oxidative stability) are also favourable. Furthermore, the plant can serve as fodder for livestock. The cake left post-oil extraction can be used as a fertiliser.

10.2.2. Issues/challenges facing the product

While the product itself does not face any issues, demand currently outstrips supply. There is an increasing demand for good quality moringa products in Europe and North America. India is currently the leader in exports, but there are some concerns over the quality of Indian Moringa oleifera leaves (source: CBI Europe). Each producing region is susceptible to its own set of pests. In Hawaii, aphids and imported cabbageworm are sometimes present on the moringa trees while the Indian subcontinent has witnessed caterpillars and weevils. Mite damage and trunk damage from borers have been witnessed at plantations in Hawaii.

10.2.3. Supply

Production and cultivation

Cultivation needs

Moringa trees grow fast. Once cultivated, the tree begins to flower within the first six months. In cold weather regions, flowering happens during the warm months and the plant usually flowers once a year. In tropical /subtropical regions with seasonal rainfall it can flower twice or all year around. It takes about six to eight months to harvest. Post cultivation or annually, the plant is cut down in size so the next harvest is easier.

Moringa oleifera grows well in dry to moist tropical or subtropical climates with an annual precipitation of 760–2,500 mm. Being a drought-resistant plant, it requires less than 800 mm irrigation. It needs a temperature of between 18°C and 28°C. While it can grow in any soil type, heavy clay and waterlogged soils do not agree with the plant. It grows best in neutral to slightly acidic soil (pH 6.3 to 7.0), although it can also grow in soil pH from 4.5 to 9. Water- logged soils result in the plant’s roots rotting. It can grow in altitudes up to 2000 m.29

Cultivation – best practices

Moringa is either cultivated using seeds or by planting stem cuttings, depending on the geographic region and agricultural practices. In Sudan, cultivation involves seeds while stem cuttings are used for cultivation in India and West African nations. The stem cuttings are usually 1 m to 2 m long. Research indicates that stem cutting works better as the plant grows quicker and seed quality is difficult to gauge. Trees raised from stem cuttings start flowering quickly, within six to eight months of planting. The yield is generally low in the first two years but strong from the third year. A single tree can yield 600 or more fruits/seed pods a year.30

28 Moringa oleifera oil: A possible source of biodiesel, http://www.sciencedirect.com/science/journal/09608524/99/17 29 Potential of Moringa oleifera L. as livestock fodder crop: A review. Turk. J. Agric. For. 2014;38:1–14. doi: 10.3906/tar-1211-66, Nouman W., Basra S.M.A., Siddiqui M.T., Yasmeen A., Gull T., Alcayde M.A.C 30 Moringa (Moringa oleifera Lam.): A versatile tree crop with horticultural potential in the subtropical United States, Palada M.C., HortScience,. 1996; 31:794–797

Moringa is generally planted with spacing of 3–5 m between the plants. Row spacing is similar. Due to its drought-resistant nature, the plants can survive even with irregular irrigation. Initial watering is required.

Harvesting

Moringa can be cultivated for all parts of the plant – leaves, seeds and pods (oil). The yield varies depending on the age of the plant, season, climate, and even irrigation (despite its growth in minimal irrigation). The best yields are in warm, dry weather conditions with some irrigation (rainfall is acceptable, too). The first two years the yield is low but it picks up from the third year. As the tree is popular in Asian and African nations, where labour is cheaper, the harvest is done manually.

From the third year, the moringa tree can yield upwards of 600 pods. Some even yield as high as 1,000. For leaves, average yields per year are about 6,000 kg/ha. In rainy seasons the harvest is about 1,120 kg/ha while dry seasons yield about 690 kg/ha per harvest. Unlike the seeds, the leaves and stems can be harvested even from young plants just 60 days old, thereby harvest can happen every two months or less leading to at least six or seven harvests a year. Moringa oils are highly oxidative and can be stored for years, while the leaf and pods can be stored for about two weeks maximum at 10°C. Oil extraction and yield depend on the method used to extract the oil. Low-tech extraction methods have yielded about 250 l/ha of oil.31

10.2.4. Global production

The global Moringa oleifera market was worth about $427 million in 2016 and is expected to reach $737 million by 2020 at a growth rate of nearly 9% annually (source: Moringa India). The Indian export market for moringa is growing 26–30% per year, which is a good indicator of the global market because India accounts for nearly 80% of all exports.

Moringa oleifera is indigenous to the sub-Himalayan regions of northern India and Pakistan. Moringa is an important crop in India, Ethiopia, the Philippines and the Sudan, and is also being grown in West Africa, East Africa, South Africa, tropical Asia, Latin America, the Caribbean, Florida, and the Pacific Islands. Figure 63 shows the moringa-producing nations. Besides being cultivated, the tree has become naturalised in the wild in many areas of the world.

31 Potential of Moringa oleifera L. as livestock fodder crop: A review. Turk. J. Agric. For. 2014; 38:1–14. doi: 10.3906/tar-1211- 66, Nouman W., Basra S.M.A., Siddiqui M.T., Yasmeen A., Gull T., Alcayde M.A.C

Figure 62: Moringa-producing nations

India is the largest producer of Moringa oleifera. Many other nations cultivate moringa yet India supplies nearly 80% of the moringa needed today. India has an annual production of 1.1–1.3 million tonnes of tender fruits from an area of over 38,000 ha. Among the main states of moringa cultivation, Andhra Pradesh leads in both area and production (15,600 ha) followed by Karnataka (10,200 ha) and Tamil Nadu (7,400 ha). In other states, it occupies an area of 4,600 ha.32

Production data from other countries is not available at this scale as the plant tends to grow wild in most of these top producers. The FAO does not track moringa separately and moringa oil is tracked as part of vegetable oils. In Africa, the key manufacturers of moringa products are Ethiopia, Sudan, Zambia, Ghana, Nigeria, Kenya, Niger, Rwanda, and Mozambique. As noted earlier, in Zambia, the product is cultivated as a means to overcome malnutrition.

It is grown in the World Vegetable Centre in Taiwan. Globally, Asia accounts for nearly 83% of all cultivation, followed by African nations with 11% and America accounting for the rest, 6%, primarily Hawaii and the Caribbean islands.

10.2.5. Current Australian landscape

Australia does not produce Moringa oleifera. Considering the requirements for cultivation, it could grow well in Northern Australia.

10.2.6. Retail market prices

Prices for seed pods/powders and leaves vary by country and product type. Given that countries like India have an abundant supply of seed pods, the product can be bought at most retail locations for US$2.5–3/kg and even less at street vendors and smaller stores. Even moringa powder can be purchased for US$4.5/kg, with organic varieties commanding a higher price of about US$8–14/kg. The same moringa powder is sold at a much higher retail value in markets like the EU, where it retails for US$35–55/kg.

India dictates the market prices for Moringa oleifera as the country accounts for nearly 80% of the export market. Wholesale prices from India are about $6.5/kg. It can also be offered at a lower price due to India’s lower labour costs. As Table 43 shows, retail prices are higher.

32 Opportunities for development of the Moringa sector in Bangladesh, Yeray, Edwin (2015)

Table 43: Retail prices Country Estimated Price (US$/kg) Estimated Price (A$/kg) India 14 18.2 South Africa 28 36.5 Note: The retail prices are the price the product commands outside the country.

The retail price for 200 g of moringa is about US$10 in the UK and about US$2.50 in Ethiopia. Moringa powder is sold for less than wholesale prices (about $4.50–5/kg) in many cases in India.

10.2.7. Illicit trade or other issues

Moringa production is limited to only some countries that fall under the tropical and subtropical belt. While that has resulted in supply issues, the other key restraint for these products is malpractice. Some producers are supplying lower grade or adulterated products mainly due to unclear standardisation parameters (source: Global Moringa Meet), although some buyers are introducing newer standards across Europe and the US.

10.2.8. Demand

The top importers of moringa are the US, China and EU nations (Germany, Austria, Spain, and Italy). The product is popular in Vietnam and South Korea, among others.

In terms of products, the US is the largest importer of moringa oil, while China tops the list for moringa seeds. The EU nations are the largest importer of moringa leaf and the Gulf countries are the top importers of moringa seed pods or drumsticks.

For moringa oil, the top importers after the US are the UK and Germany. In Europe, moringa products belong mostly in the cosmetics market segment and the dietary/food supplement industry. While the EU tops the leaf importers, when individual countries are considered, the US is the largest importer, followed by Germany and the UK.

Figures 64 and 65 shows India’s export markets for moringa and moringa leaf, respectively, by value and volume.

Figure 63: India’s export markets for moringa by value and volume, Jan. 2014 – Dec. 2016 Source: Zauba (Indian import-export database)

Figure 64: India’s export markets for moringa leaf by value and volume, Jan. 2014 – Dec. 2016 Source: Zauba (Indian import-export database)

Of the total amount, the US is the largest single buyer of moringa leaf powder, accounting for US$4,320,896, followed by Germany (US$563,225) and South Korea (US$425,345). The UK was in the top three but has now moved to fourth place following massive demand for the product in South Korea. The UK import values are still up.

India presents tough competition in this market since it has low production costs and can produce significant volumes. Moringa has been an integral part of its diet for centuries. Various African companies intending to differentiate themselves are targeting niche markets where the ‘story’ of being collected in the wild or grown by smallholders has a market value. In the majority of African countries, moringa is almost restricted to leaf powder consumption. The nutraceutical and functional food industry is currently growing in popularity throughout the world as an alternative to the pharmaceutical industry. This is resulting in increased demand for products like moringa powder.

10.2.9. Consumer perception

Consumers worldwide seem to be constantly looking for healthy food options. They are increasingly interested in new and exotic products, especially if they come with added health benefits. Moringa fits this bill. One of the latest superfoods, moringa is packed densely with nutrients. Although popular in many African and Asian countries, it is relatively unknown in most parts of the world. But its superfood tag is increasing its popularity in most markets, especially in the health and wellness segment.

The healthy trend is driving up the consumption of Moringa oleifera. European consumers use health products such as dietary and food supplements to avoid/prevent diseases. This trend is driving the market for supplements. The European food supplement market is expected to grow by 9.5% from 2015 to 2020 (CBI Europe). Within the supplement market, there is growing demand for products that support the immune system, which is linked to preventive health. Moringa is one of the latest entrants in this space as it aids in multiple ways, including improving immune health and supporting weight loss. Based on Euromonitor data, the European countries with the highest share of immune product-based supplements are France and Italy, followed by Germany and the UK.

There is an increasing demand from customers for energy drink and supplements across many countries, including the US and in Europe. The latest trend in energy drinks and supplements is the addition of alternative/natural energy sources. In response to consumer demand, beverage formulators are using more natural ingredients, like guarana, honey, green tea, and coffee bean extracts in energy drinks and supplements. Here, too, there is an

opportunity for Moringa oleifera as consumption can lead to increased energy levels. The global market for sports nutrition and high energy supplements is expected to grow by 10% annually and reach $66 billion in 2020 (Euromonitor).

10.2.10. Retail market value

As noted, prices for moringa seed pods, powders and leaves vary by country and product type. Moringa powder has an export value of $1,400–2,500/tonne, depending on the country of origin.

10.2.11. Legislative and regulatory environment

To export the product, suppliers need to ensure that they meet the local requirements of the country in question. For instance, to export moringa to the European food supplements/dietary supplements market, one needs to comply with the European legislation for food supplements (both for composition and labelling). Suppliers also need to comply with food safety requirements in terms of contaminants and maximum allowable residue levels. For Moringa oleifera entering Europe, contamination with salmonella is the top issue today. Previously in India, the moringa leaves were dried in the sunlight, but following the introduction of standards for regulating moringa products by the US and EU, most suppliers have invested in alternative means to reduce contamination and colour change.

European food industries also demand compliance with quality and food safety management. Examples include:

 ISO 9001:2008 (required for health ingredients)  International Food Standard  ISO 31000 (risk management).

In addition to the legal requirements, most suppliers need to comply with specific buyers. In the case of organic and fair trade products, the supplier needs to comply with additional environmental and legal aspects, such as certification of sustainable production from agencies such as UNCTAD BioTrade Initiative, FLO Fairtrade, Fairtrade USA, and World Fair Trade Organization.

Moringa oil, when used in the cosmetics industry, needs to comply with the EU Cosmetics Regulation (EC 1223/2009) that specifies the requirements concerning the physicochemical, microbiological, and toxicological profile or product information. Exotic vegetable oils, including moringa oil, that are not chemically modified are exempt from the EU’s regulation on the Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) (SFA, 2015). For exotic vegetable oils that are imported into the EU for the first time, the importer is required to present a proven record of use in the country of origin, which serves as an informal verification of its safety for use as a cosmetic product (CBI Europe).

Import duty rates/tariffs need to be accounted for – the import duty rate for moringa leaf powder is 10% in the US.

10.2.12. Trading channels

The product, while gaining popularity, has not developed to the extent to have a global trade association. Trading channels do exist by region. Currently, most of them are focused on product development, sustainable production, quality control, and other coordination within the country itself, along with handling its export markets (for example, the Moringa Development Association of South Africa [MDASA] or the Moringaling Philippines Foundation, Inc. [MPFI]).

Trading channels vary slightly depending on the end product/use. Figure 66 shows the trading channel for a moringa leaf originating in Africa and sold in Europe.

Figure 65: The trading channel for a moringa leaf originating in Africa and sold in Europe Source: Federal Ministry for Economic Corporation and Development, Mozambique (2014)

10.3. Opportunities and threats

10.3.1. Opportunities

There are plenty of opportunities for Australia in the moringa market. There is a strong demand for moringa in the international market and demand is currently higher than supply. Australia can take advantage of the many research opportunities not just for moringa powder, but for its various sub-products.

Moringa, especially in the powdered form, is gaining a favourable reputation as a superfood in Western countries. It is being used in dietary supplements, beverages, teas, and even oatmeal. It can be added as an ingredient in snack bars as it’s nutritionally dense. Many new food combinations using moringa are being researched. Moringa powder is currently added to products including hummus and guacamole. Also, its high level of antioxidants, combined with iron, protein, fibre, and vitamin B content, has resulted in it being marketed as a new weight loss product. Comparative tests have revealed that moringa powder has twice the amount of protein and fibre, six times more iron, five times more B3, four times the calcium, and 97 times more B2 than kale. Considering that kale is a very popular superfood, moringa, given its higher nutritional content, has a lot of potential.

There is a strong potential for moringa-based smoothies. The juice /smoothie industry has been on a downward trend due to parental concerns about their sugar content and overall health. The same issues that have resulted in the decline of the soft drink industry are also crippling the juice segment. In the US, the sugar debate has led to an ongoing year-on-year decline in soft drink consumption, from 47 litres per capita in 2002 to 33 litres in 2016. In spite of this decline, there are opportunities in the juice category, particularly in the premium segment via exotic, raw juices, cold-pressed (or HPP) juices, fringe juices like coconut and other plant waters and juice smoothies. While affected by a high sugar content, the natural and healthy positioning of these juices has enabled them to prosper, driving up the average unit price by 2% in 2016. Complex mixed juices and unique exotic juice flavours have grown in popularity. Mixed juices, or smoothies, are perceived to offer the benefits of several fruits and/or vegetables, which outweigh the downsides associated with naturally occurring sugars. The rise of new diets and the protein craze in the meal-replacement segment allow opportunities for nutrient-rich vegetables, including moringa.

Moringa also has good potential in the industrial space thanks to its potential as a biofuel and a water-cleaning agent and in the beauty and cosmetic industries in the form of moringa oil.

Similar to the food industry, the cosmetic market is experiencing a shift towards natural ingredients. There is increasing demand for natural cosmetic products and this has resulted in the industry offering exotic vegetable oils as a base for cosmetics and perfumes. Between 2012 and 2016, the world vegetable oil products market grew at a compound annual growth rate of 8.16% (Euromonitor). Between 2010 and 2014, European countries imported vegetable oils to the value of €989 million (Euromonitor).

10.3.2. Threats

Australia faces direct competition from countries that currently produce moringa. These countries have production volumes in place and product knowledge, and therefore can increase production. They also have a cheaper labour force. India can afford to get into price wars as their product is cheap.

Moringa cannot be easily substituted like some products (for example, lemon myrtle by lemongrass). However, as a trending superfood it could be replaced by a new, trending superfood at any time.

Environmentally, moringa does not grow well in cool temperatures, with low sunlight, and wet soil conditions. Research shows that the quality of moringa grown in a region with higher rainfall was inferior. In Oahu, Hawaii, damping symptoms were present in several trees following excess rainfall one year.

10.4. Conclusions and recommendations

Moringa is not grown in Australia; nevertheless, it presents a unique opportunity for the country. Based on trade data, most of the biggest consumers of moringa-based products are developed nations, including the US, the UK and Germany. China is another big importer. The US and most notably European nations have concerns about the quality of the Indian Moringa oleifera leaves.

Despite their low wholesale prices, moringa products command a premium retail price in EU countries. Moringa oil trades at US$18–90 per litre of oil from India and sells for US$180–220 at retail markets in the Netherlands (Yeray Saavedra, Edwin van der Maden, 2015). Therefore, the market will pay a premium for a good quality product. Furthermore, the product has minimal capital requirements and is considered agriculturally and economically profitable as it grows quickly with minimal resources. Limited investments are needed when producing leaf (powder).

If Australia decides to enter this industry, its competitive advantage lies in cultivating and harvesting higher quality products with minimal contamination. Australia could also enter the market as a certified organic or all-natural producer, given the high demand in countries for organic products. In fact, organic moringa powder currently commands double the price of regular moringa powder.

Australia could also take advantage of new high-yielding seeds from the Advanced Biofuel Centre (ABC). The ABC has unveiled the moringa oil industry’s most productive seeds, known as MOMAX3, which promise to yield three times the industry average, increasing the yield from two to three tonnes of seeds per hectare each year for a tree of prime age to more than eight tonnes. The average yield of moringa oil seeds elsewhere in the world has been stagnant at less than one tonne per hectare per year.

Australia can achieve a share of the moringa oil industry. India, the key player in the moringa industry, is also a top consumer of moringa seed pods, which are used to produce oil. Moringa pods are a staple in India, especially in southern diets and cuisines, which results in lower pods for oil production.

7. Wasabi

10.1. Introduction

Wasabi (Eutrema japonicum or Wasabia japonica) is a plant in the Brassicaceae family. Cabbages and horseradish also belong to the same family. The Shizuoka region in Japan is the origin of worldwide wasabi cultivation, which is believed to have begun approximately 400 years ago. Due to its high price and scarce availability, regular horseradish, green colouring, and mustard is used as a substitute in many countries, including the US. However, authentic wasabi can be found in the US at specialty grocers and high-end restaurants, and is usually sold as a root, as a tinned or jarred paste that is ready to use, or as a dried powder.

W. japonica is an herbaceous perennial and is traditionally used as a natural herb. The wasabi plant (see Figure 67) consists of a rhizome (a root-like stem) with clusters of large, long-stemmed heart-shaped leaves and delicate white flowers that begin to blossom in early spring.

Figure 66: Wasabi plant Today, Japan produces several types of rhizomes. The most popular wasabi types include midori, sanpoo, takai, shimane, izawa, medeka, mazuma and daruma. A green thumb wasabi is grown in Taiwan, which usually grows faster and produces larger green leaves than the other wasabi varieties, and Wasabia koreana is grown in Korea.

The most common varieties are mazuma and daruma (see Figures 68 and 69). Daruma rhizomes have a lighter green colour and the stem is purple. Both the rhizome and stems can be used together to produce a light green wasabi paste with a zingy taste. Mazuma has a purple stem and the rhizome is a lighter green colour, producing a stronger pungency and heat.

Figure 67: Mazuma wasabi Figure 68: Daruma and mazuma wasabi

10.2. Product overview

10.2.1. Uses and applications

The whole wasabi plant is edible, from the roots to the leaves and flowers (see Figure 70). It is commonly used in sushi, but also in other dishes including miso soup, wasabi-don, grilled meat, wasabi-zuke and salads. Wasabi has a strong, hot flavour with a short-lived burning sensation.

Food

Wasabi leaves and stems

The leaves and stems of the wasabi plant are used when cooking. They are in high demand and are used in a number of Japanese dishes, including pickled sake lees. Fresh wasabi leaves can be eaten, either fresh, pickled (wasabi-zuke) or cooked. The stem is used as a condiment and has an extremely strong pungency.

The heat of wasabi is more prominent in stems than leaves but, overall, the heat is always greater in the rhizome (root). Leaves and stems contain glucosinolates and allyl isothiocyanates (AITCs), which have several health and nutritious benefits and are also the reason for wasabi’s strong flavour and taste profile. When cooking the wasabi leaves and stems, the heat will lessen and create a similar taste to spinach. They are used in a variety of ways: for example, raw to spice up sandwiches or salads; cooked in stir-fries and noodle dishes; fermented to add to beverages.

Wasabi root/rhizome

The root can be grated and eaten as a condiment or grated over foods for added spice. The rhizome is finely grated to produce a light green creamy paste that creates a fragrant peppery flavour that quickly dissipates. While the traditional method of grating wasabi using a sharkskin is still widely prevalent in Japan and is still considered optimal, other graters are used (for example, oroshigane, a copper-toothed grater, a ceramic grater or even a common ginger grater). The root must be grated right before serving in the case of fresh wasabi as it only holds its strong flavour for 15 minutes after preparation.

Figure 69: Wasabi rhizome (left) and wasabi flowers

Wasabi flowers

Wasabi flowers are added to soups, salads, and even herbal teas. Each stem usually has several open white flowers and buds. These flowers add a mild, distinct flavour to the dish.

Nutraceutical/medicinal

Wasabi is used in the nutraceutical industry in a capsule form for its impressive list of medicinal properties. Medicinally, wasabi has antibiotic properties, inhibiting microbial growth and suppressing oral bacteria. Due to its ability to eliminate bacteria, it’s a natural antimicrobial agent, mainly due to the isothiocyanate vapours it produces. These vapours help deter the development of yeast, mould, and bacteria. They can help prevent tooth decay by destroying the bacteria that may cause it.

Wasabi even has anti-cancer effects as well as mild anti-inflammatory properties. It contains powerful isothiocyanates that are sulphur-containing phytonutrients with strong anti-cancer effects. They occur naturally as glucosinolate conjugates in wasabi. When the raw vegetables are chewed, the plant cells are broken down and an enzyme called myrosinase converts into isothiocyanates. Their anti-cancer effects occur as they neutralise carcinogens reducing the negative impact of the poisons. Studies have shown that isothiocyanates may help prevent lung cancer and oesophageal cancer and can help lower the risk of other cancers, including gastrointestinal cancer.

Studies have shown that the root has characteristics that may suppress bacteria found in the gut, such as gastric inflammation and stomach cancer. It’s possible that it can even prevent food poisoning, which is one of the reasons it’s served with raw fish.

Figure 71 lists wasabi’s nutritional profile.

Figure 70: Wasabi nutritional profile

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10.2.2. Issues/challenges facing the product

The biggest challenge for wasabi is its need for very specific climatic and environmental conditions, making it a very difficult crop to grow commercially. Even though some countries, including Australia, have successfully imitated the conditions, the cost is very high.

Wasabi also faces the threats of product substitution and attack by pests and diseases. Slugs, aphids, and snails are often found in wasabi cultivations, while black leg, white rust, and mildew are some of the diseases that can hinder wasabi cultivation.

10.2.3. Supply

Production and cultivation

Two main strategies are used to grow wasabi – hydroponic and soil-based. The higher quality wasabi, both in appearance and taste, grows in cool mountain streams and is known as semi-aquatic or ‘sawa’ wasabi. Wasabi known as field or ‘oka’ wasabi is grown in fields under varying conditions and generally results in a lower quality plant, both in appearance and taste. The growth of wasabi is severely limited by geographical conditions: it needs to be grown from 1,300–2,500 m above sea level and in specific climate conditions.

Soils require large amounts of organic fertiliser before planting, and the plants require ongoing herbicides and pesticides to maintain their health. The ground needs to be kept damp at all times as the plant is regarded as semi-aquatic in its growth characteristics. It is regarded as good practice to abandon the growing plot after three harvests and not return to it for at least 10 years. Soil-grown wasabi requires a temperature of 6–20°C, with 8–18°C considered optimal. Soil pH 6 to 7 is best. The plant needs water all year round, both rainfall and irrigation systems. Even low levels of pollution in the water will affect the quality of the crop. Water-grown wasabi requires the temperature to be 8–18°C, with 12–15°C considered ideal. Anything below 8°C inhibits growth and below 5°C, the plant ceases to grow completely. Spring water generally has high levels of oxygen and therefore is considered optimal for water-based wasabi cultivation.

Wasabi is commonly cultivated from tissue culture, offshoots or seeds. Tissue culture, or micro-propagation, is the process of culturing a small piece of plant tissue (for example, stem, root, leaf, or bud) in a test tube. The plant tissue, called an explant, will grow into a plantlet that can be planted in a greenhouse. Plants produced by tissue culture are genetically identical to their mother plant and therefore have the same potential to produce a high-quality stem. Cultivation by seed is the method Japanese farmers mostly use. Offshoots are produced around the crown of the mother plant and can be used to cultivate wasabi. Each mother plant can produce up to 20 offshoots, depending on the type of wasabi produced. Both hydroponic and field soil systems stipulate planting wasabi so that the crown of the plant is about 1.3 cm above the soil surface. Extra shade may be needed until the plants are established and throughout the summer, depending on the intensity of the sun in the growing area. If leaves appear limp or wilted, increasing the humidity around the plants with misting can help. When wasabi plants are harvested for market, the offshoots are cut from the plant and immediately replanted. Offshoots should be at least 4 cm tall, with four to five leaves for a successful cultivation.

Wasabi, a perennial herb, grows to about 450 mm high and produces leaves on long petioles from the crown of the plant. As the plant ages, the rhizomes start to form and, at maturity (about 18 months), it has a distinctive thickened stem (or rhizome) connected to the heart- shaped leaves by long, thin petioles. Wasabi plants take about 1.5 to 2 years to grow big enough for harvest. The lengths and weights of rhizomes vary widely between variety (for example, the single rhizome length of daruma ranges from 50–200 mm long and weighs from

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4–120 g). Seed pods are mature and ready for harvest 50 to 60 days after flowering is complete.

10.2.4. Global production

Authentic wasabi grows in northern Japan, parts of China, Taiwan, Korea, and New Zealand. In North America, the rainforests on the Oregon Coast and in parts of the Blue Ridge Mountains in North Carolina and Tennessee provide the right balance of climate, sunlight, and water quality to grow natural wasabi. Japan is the leader in the production of wasabi. Wasabi grows naturally here and is cultivated mainly in the Shizuoka and Nagano regions. The production volume of processed wasabi exceeded 17,000 tonnes in 2013, with wasabi production at 2,380 tonnes. In the same year, sales in Japan stood at 21.6 billion yen (US$197.7 million) while those overseas topped 3 billion yen (US$26.58 million).

Wasabi production in the Shizuoka area has a cultivation area of 113.8 ha, production quantity of 227.5 tonnes, and production value of 3.15 billion yen (FAO, 2016). Both the cultivation area and production quantity are the highest in the country, accounting for 40% of the nationwide production. Only wasabi root is counted as part of the production (not the leaves), resulting in Japanese production of about 575–600 tonnes in 2016, a huge drop from 799 tonnes in 2011 (see Table 44). Nagano production was down to about 130 tonnes in 2016. The decline in production is attributed to higher labour costs, despite rising demand for wasabi.

Table 44: Japanese wasabi production, 2011 Prefecture Production (tonnes)

Water Wasabi Field Wasabi Total

01 Hokkaido 2.0 - - - 2.0 - 02 Aomori 0.2 1.2 - 31.3 0.2 32.5 03 Iwate 8.8 1.5 2.4 620.5 11.2 622.0 04 Miyagi 9.0 4.2 0.3 1.0 9.3 5.2 05 Akita ------06 Yamagata 0.5 0.3 - 0.2 0.5 0.5 07 Fukushima - - 1.5 15.0 1.5 15.0 08 Ibaraki 0.2 0.1 - 0.3 0.2 0.4 09 Tochigi 10.8 14.3 0.1 6.6 10.9 20.9 10 Gunma 0.2 0.2 - - 0.2 0.2 11 Saitama - - - 0.2 - 0.2 12 Chiba ------13 Tokyo 24.8 - - - 24.8 - 14 Kanagawa ------15 Niigata 0.2 0.3 - - 0.2 0.3 16 Toyama 0.2 0.1 - - 0.2 0.1 17 Ishikawa 0.5 0.9 - 0.4 0.5 1.3 18 Fukui 0.5 - - - 0.5 - 19 Yamanashi 7.0 12.1 0.3 0.7 7.3 12.8 20 Nagano 316.8 739.2 7.2 16.8 324.0 756.0 21 Gifu 1.1 0.6 - - 1.1 0.6

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Prefecture Production (tonnes)

Water Wasabi Field Wasabi Total

22 Shizuoka 295.1 638.2 4.5 232.3 299.6 870.5 23 Aichi - - 0.6 6.2 0.6 6.2 24 Triple 0.3 0.5 1.8 0.2 2.1 0.7 25 Shiga ------26 Kyoto 0.1 0.4 - - 0.1 0.4 27 Osaka ------28 Hyogo 1.5 2.2 - 4.6 1.5 6.8 29 Nara 1.2 0.2 0.1 0.1 1.3 0.3 30 Wakayama 0.2 - 0.5 0.5 0.7 0.5 31 Tottori 3.2 4.8 29.6 2.8 32.8 7.6 32 Shimane 2.4 10.1 9.0 113.0 11.4 123.1 33 Okayama 0.4 0.7 3.9 7.8 4.3 8.5 34 Hiroshima 1.6 4.4 0.3 1.7 1.9 6.1 35 Yamaguchi 2.5 2.2 22.5 54.2 25.0 56.4 36 Tokushima - - - 1.6 - 1.6 37 Kagawa ------38 Ehime - - - 3.3 - 3.3 39 Kochi 0.1 0.6 6.0 3.3 6.1 3.9 40 Fukuoka - - 10.3 1.5 10.3 1.5 41 Saga - - - 18.0 - 18.0 42 Nagasaki ------43 Kumamoto - - - 0.2 - 0.2 44 Oita 0.5 8.9 - 94.0 0.5 102.9 45 Miyazaki - - 6.4 0.5 6.4 0.5 46 Kagoshima ------47 Okinawa ------Total 691.9 1,448.2 107.3 1,238.8 799.2 2,687.0 Source: Portal Site of Official Statistics of Japan. Note: The statistics have not yet been updated for 2017.

After Japan, Taiwan and China have a reasonable crop of wasabi but most of it is either consumed domestically or exported to Japan. China recently started exporting to Europe and the US. North American cultivation exists in both the US and Canada. The key player here is Pacific Coast Wasabi, which has operations in British Columbia, Michigan, Washington, and Oregon, and cultivates about 10,000 kg of wasabi per year. While Japan is cutting down on cultivation, other parts of the world, including the US and China, are slowly increasing cultivation. (Trade information is not available due to wasabi being added under herbs and spices in most countries.)

10.2.5. Current Australian landscape

Australia has mimicked the commercial production of wasabi. There are currently commercial productions in Tasmania, including Shiba Wasabi, which is a large-scale operation. A new

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farm in North Queensland entered the wasabi industry recently using a soil-based process – as opposed to the traditional hydroponic process – but it is too early to estimate their success.

Shiba Wasabi was acquired in 2016 by TasFoods for $3 million and is in the process of expanding its operations. Shiba Wasabi mostly caters to local demand across the country for both fresh and powdered wasabi. Powder is easier to export than the fresh product, which has a limited lifespan.

10.2.6. Retail market prices

The price of wasabi varies, depending on the season and the growers’ proximity to the market. In Australia, wasabi sells from A$250–400 kg for the fresh stem, but the leaves can sell for A$2–3 per leaf. In Japan, fresh wasabi stem prices range from 500 yen (A$6) for a small stem to 3,000 yen (A$37) for a very big one. The average price for one kilogram of wasabi stems is 20,000 yen (A$243). Lower-end stems are priced at 8,000 yen (A$97) per kilogram. Table 45 compares retail prices for wasabi stems in Japan, Australia and the US.

Table 45: Retail price of wasabi stems Country Estimated Prices (US$/kg) Estimated Prices (A$/kg)

Japan 70–176 90–227

Australia 194–310 250–400

US 194–300 250–385

Prices are similar in the UK, where 100 g of fresh small rhizomes are sold for £22.5, which converts to A$387/kg.

10.2.7. Illicit trade or other issues

Authentic wasabi production is low and the price is very high, leading to plenty of imitations in the global market. The most commonly used imitation wasabi is a mixture of horseradish, Chinese mustard, and green food colouring. Due to the scarcity of the authentic product, many wasabi powder and paste products in the market that claim to contain real wasabi may have only minuscule amounts (<0.3%).

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10.2.8. Demand

The demand for real wasabi is rising. China’s wasabi production is witnessing increased demand, leading to prices increasing by nearly 10% due to reduced supply. Prices are forecasted to further increase in 2018, due to continued demand and low supply. Chinese wasabi is mostly used domestically and exported to Japan. In 2015, the country added Italy, Spain, the UK, and the US to its export list for wasabi due to increasing demand.

In Japan, wasabi is such a popular herb that Nestlé even introduced a wasabi KitKat, which is driving up sales. With KitKat specialty stores and a new factory to cater for new flavours and demands, wasabi may have a good potential in this segment.

Japan sources wasabi from both China and Taiwan in addition to its own production. Compared to Japanese wasabi, Chinese and Taiwanese wasabi are not disease-free, as they are not grown hydroponically but are soil based. Wasabi from both these countries is prone to diseases as it is grown in the same ground for over three years (source: World Wasabi Council).

Other countries like the US, Canada and Korea are self-sufficient, but demand is increasing. The US and Canada also export their wasabi to Europe and Japan. Korean wasabi demand has risen 50% in the last five years. In February 2017 wasabi production started in Northern Ireland, and other countries including Poland are involved in initial stages of experimentation for wasabi cultivation. Interviews with US and Canadian growers indicate that the local demand for wasabi has doubled in the last couple of years due to increased customer awareness and growth in Japanese cuisines and sushi bars. There are 3,946 sushi restaurants across the US, with a revenue of nearly $2.2 billion in 2014 and an annual increase in sushi consumption from 2010–14 of about 30%.

The EU now has strict labelling rules for artificial wasabi products, with non-compliant products being removed from shelves. The US is not there yet, but it could happen as European laws are ahead of the US in most of these cases.

10.2.9. Consumer perception

Over the years, wasabi has grown from being a traditional culinary ingredient in Japan to a more popular product across the world, thanks to the spread of sushi bars and Asian cuisines. While not everyone is aware of the imitation product being used, people are gaining awareness slowly and this is resulting in an increased demand for authentic wasabi.

Wasabi’s current growth is from both the food and nutraceutical industries. Wasabi industry associations and growers such as the World Wasabi Council are trying to market wasabi for its health benefits. Wasabi is a good source of fibre, protein and energy, as well as calcium, iron, magnesium, phosphorus, potassium, sodium and zinc. It is high in vitamin C, thiamin, riboflavin, niacin, folate, and vitamins A and B6. Wasabi is currently being promoted as a herb that can be used to reduce the risk of cancer and heart disease, as well as reduce inflammation of joints and muscles. It helps to defend against bacterial infections in the body and mouth, and can even reduce the irritating effects of seasonal allergies. This potent plant can be used to treat respiratory problems. Wasabi’s wealth of antioxidants helps to boost the immune system and remove harmful toxins from the body. Since wasabi as a spice can only be used in very limited quantities, it is now being offered in capsule form by the nutraceutical industry. Despite entering the nutraceutical industry more than a decade ago, it is only now gaining attention and for this reason it is too early to gauge its success.

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10.2.10. Retail market value

One of the most expensive crops in the world due to its production costs and scarcity, wasabi retails for nearly US$250/kg in most countries. In the nutraceutical industry, about 50 capsules retail for about US$25, making it more expensive than most of the standard products seen on the shelves in stores. In the export market, wasabi is valued at about US$200,000–275,000/tonne.

10.2.11. Legislative and regulatory environment

The regulations for the wasabi import/export market are similar to most dried and fresh herbs and spices. Wasabi should meet all food safety laws specific to hygiene and control and contaminants and pesticides. As wasabi is cultivated using hydroponics in many places, the effects of the water in the vicinity can be profound, and the use of pesticides is mostly prohibited. Several years ago, for instance, trout farms suffered damage from the pesticides used by upstream wasabi farms in Nagano Prefecture. Pesticides for expelling plant lice have recently been exceptionally permitted, but they are rarely used.

In addition, if the product is organic, it must adhere to organic certifications in the industry. An increasing number of consumers prefer food products that are produced and processed by natural methods. The market for organic herbs and spices is relatively small but growing. In Europe, any organic product needs to be produced in accordance with EU legislation. Similar standards are in place for Fairtrade and other certifications. There are no local trade associations or regulations specific to wasabi in North America but growers work with Agriculture and Agri-Food Canada or the US Department of Agriculture (USDA) to ensure their export products meet the overall requirements.

10.2.12. Trading channels

The trading channels for wasabi are similar to most herbs and spices in terms of exports and imports. In Japan, the key trade association for this industry is the All Japan Processed Wasabi Association.

Table 46: Trading channels for wasabi

Source: CBI (EU)

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10.3. Opportunities and threats

10.3.1. Opportunities

There’s a strong demand for authentic wasabi across the world and the current supply cannot match the demand levels. Wasabi gained popularity across the world when it was found that one unique compound naturally occurring in wasabi, but in no other vegetable, was 40 times more potent in fighting cancer than the other best vegetable extract. In addition, the fresh product has a very short lifespan and the frozen/chilled version can stay good up to 10 days. As a result, most cultivators focus on dried powder. Shiba Wasabi indicates that there is a demand for both in Australia.

Authentic wasabi is primarily grown in Japan, but recent reports show a reduction in production due to labour costs and the fact that many younger farmers are moving to the city from villages where these crops are traditionally grown. Under the Food, Agriculture, and Rural Areas Basic Act in Japan, which focuses on farms of four hectares or more, wasabi farms are too small to receive subsidies, which is also adding to reduced production as farmers are leaving the industry. This provides an opportunity for Australia. Interviews with wasabi growers in the US and Canada indicate double-digit growing demand for wasabi in the nutraceutical segment.

10.3.2. Threats

The key threat to this industry is the high cost involved both for producers as well as the end consumers. Wasabi cultivation requires post-harvest washing of the soil. The risk of disease rises due to accumulated organic matter (for example, clay or dead insects) and this stagnates the flow of the water. To prevent this, the surface soil must be turned over and carefully washed with a sprayer, which increases labour costs.

The threat of substitutes is very high: most places in the world do not use authentic wasabi due to its scarcity and price, and it is commonly substituted with a mixture of horseradish, Chinese mustard, and green colour (either food colouring or spinach).

Other issues include the access to high quality authentic seeds or cuttings of the original wasabi outside Japan, as authentic wasabi is rare and the growth period is long (wasabi grows slowly). Due to its high potential profits, more countries are attempting to enter the commercial farming of wasabi. Ireland is the latest entrant, and is expecting the first crop next year.

Although wasabi is a staple condiment in Japanese cuisine, it is used sparingly in other cuisines, including European and North American foods such as specialty dips, salad dressings, nuts, and cheese to enhance the flavour.

10.4. Conclusions and recommendations

Due to the decrease in production in many key regions (including in New Zealand and Japan), Australia could potentially invest further in the wasabi industry to capture market share, especially in the nutraceutical industry, as more and more research is being funded to identify the unique benefits of wasabi.

Interviews with local growers in the US and Canada indicate that demand is rising for wasabi for both food and nutraceutical use, with nutraceutical growing faster. Despite its tough growing conditions and high production costs, it is a lucrative crop and could prove worthwhile for Australia. Also, since the wasabi produced in Australia is via greenhouses, the supply would be all year round. The market in North America and Europe is just realising it has been consuming fake wasabi and this is leading to increased demand for the true

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product. This is a big opportunity for Australian exports. There is a need for additional research and marketing in the medicinal sector to educate more customers on the benefits, as this could fuel wasabi’s growth in both the culinary and the nutraceutical industries.

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8. Edible Insects

10.1. Introduction

Entomophagy refers to the human consumption of insects or bugs. Entomophagy is practised in many countries but is predominant in parts of Asia, Africa, and Latin America. Entomophagy has only recently captured the attention of the media, research institutions, chefs and other members of the food industry, legislators and agencies dealing with food and feed.

More than 1,500 insects are known to be eaten by choice around the world. It is estimated that insect-eating is practised regularly by at least two billion people worldwide (FAO). They are most popular in the tropics, where they grow to large sizes and are easy to harvest.

Edible insects contain high-quality protein, vitamins, and amino acids for humans. Insects have a high food conversion rate and emit fewer greenhouse gases and ammonia than conventional livestock.

For example, crickets need six times less feed than cattle, four times less than sheep, and two times less than pigs and broiler chickens to produce the same amount of protein. Mealworms, for instance, provide protein, vitamins and minerals on par with those found in fish and meat. Similarly, small grasshoppers rank with lean ground beef in protein content, with less fat per gram.

10.2. Product overview

10.2.1. Uses and applications

Insects promoted as food emit considerably fewer greenhouse gases than most livestock. Only some insects, including termites and cockroaches, produce methane. The ammonia emissions associated with insect rearing are far lower than those linked to conventional livestock, such as pigs. Insects can be fed on organic waste streams (for example, manure).

Human food

Edible insects are currently used for human consumption in four forms. Raw insects can be cooked and consumed, or used in the form of flour or paste, or used as an ingredient in snack bars and candies, for example.

Insects are extremely rich in protein, vitamins and minerals, and, at the same time, are highly efficient in converting the food they eat into material that can be consumed by humans. In general, insects can supply protein, amino acids, fats, minerals and vitamins important for human health. Insects are especially rich in phosphorus, potassium, iron, copper, zinc, manganese, sodium, vitamins B1 and B2, and niacin. Nutritional values vary according to the insect species.

Thailand has the largest edible insect market, followed by China. The leafcutter ant Atta laevigata is traditionally eaten in some regions of Colombia and Brazil. In southern Africa, the widespread moth Gonimbrasia belina's large caterpillar, the mopane worm, is a source of food protein and is traded widely (both legally and illegally). In central Australia, the witchetty grub is part of the traditional diet of its Aboriginal peoples. Use of insects as an ingredient in traditional foodstuffs in places such as Hidalgo in Mexico has been on a large enough scale to cause their populations to decline. Chapulin grasshoppers are popular in Mexico. They may be eaten individually as a botana (snack) or as a filling (for example, tlayuda filled with chapulin).

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In Japan, the larvae of yellow jacket wasps (Vespula and Dolichovespula spp.), locally known as hebo, are commonly consumed. During the annual Hebo Festival, food products made from the larvae of the wasps are popular delicacies – Japan imports wasps from Vietnam to keep up with the demand.

Energy bars made from ground-up crickets are sold in the US. In Mexico, several insect- based delicacies exist – from french-fried caterpillars to chocolate-covered locusts and candy-covered worms. Insects are also found in alcohols: for example, a potent alcohol called mescal is served with a ‘worm’, which is the larval form of the moth Hypopta agavis, submerged in the glass.

Figure 71: World protein production, 2016/17 (million tonnes)

The FAO is currently advocating insect consumption for sustainability. It predicts that at the current consumption rate, humans will run out of animal food protein sources to a large extent by 2050. To produce 1 kg of high-quality animal protein, livestock are fed about 6 kg of plant protein. Insects and imitation meat – such as soybean-based foods like tofu – are the most sustainable protein sources as they require the least land and energy to produce. Beef is by far the least sustainable. The livestock sector is one of the large contributors of anthropogenic greenhouse gas emissions. Also, large amounts of ammonia (NH3), leading to soil nitrification and acidification are produced by livestock. Current livestock production also has other environmental impacts. Globally, pastures cover twice the area of cropland, and livestock consume about one-third of all harvested crops.

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Compared to animals for protein, insects leave little waste. Figure 73 shows the percentage of animal that is edible and the feed that is required per kilogram of weight. Only 40% of a cow is edible compared to 80% of crickets.

Figure 72: Percentage of animal that is edible and feed required per kilogram of weight Source: Van Huis, 2013

Animal feed

Animal feeds play a leading role in the global food industry and feed is the largest and most important component to ensuring safe, abundant, and affordable animal proteins. According to the International Feed Industry Federation (IFIF), world compound feed production reached an estimated 1 billion tonnes in 2016 (see Figure 74). Global commercial feed manufacturing generates an estimated annual turnover of over US$400 billion and commercial feed products are manufactured in more than 130 countries.

The top 10 feed-producing countries in 2016, in order of production output importance, were China, the US, Brazil, Mexico, Spain, India, Russia, Germany, Japan and France. These countries contain 56% of the world’s feed mills and account for 60% of total production (IFIF).

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Figure 73: Global compound animal feed production, 2016 (tonnes) Recent high demand and consequent high prices for animal feed including fish feeds is leading to increased research into the development of insect proteins for aquaculture and livestock. Insects are a good source to generate a sustainable protein, and they have a low carbon footprint. Fly larvae and mealworms, for instance, are not only easy to breed, but also feed on organic waste which otherwise goes to rot. They are efficient at converting feed into protein and require very little space to cultivate. Due to these advantages, insects are gaining popularity for both human and pet food. Many countries already rear insects for livestock feed.

Insects are natural food sources for many fish and poultry. Grasshoppers, crickets, cockroaches, termites, lice, stink bugs, cicadas, aphids, scale insects, psyllids, beetles, caterpillars, flies, fleas, bees, wasps, and ants have all been used as complementary food sources for poultry. They can also be used in the pet food industry.

Among the most promising species for industrial feed production are black soldier flies, common housefly larvae, silkworms, and yellow mealworms. Grasshoppers and termites are also viable but to a lesser extent. For instance, grasshoppers and mormon crickets (Anabrus simplex) can replace fishmeal and soy meal entirely. Other insects can also be used, but these are the ones that have been researched and have worked well in trials/usage. As an example, maggots – the larvae of the common housefly (Musca domestica) – are important sources of animal proteins for poultry. They have a dry matter of 30% of their total wet larval mass, 54% of which is crude protein. Studies have shown that maggot meal could replace fishmeal in the production of broiler chickens (Téguia et al., 2002; Hwangbo et al., 2009). At the same time, maggot production can contribute to alleviating manure accumulation. However, the inclusion of maggot meal in livestock diets raises concerns because common knowledge suggests that, in its adult form, Musca domestica can transmit disease. Drying the maggots to 4–5% moisture does minimise bacterial activity and is recommended if the housefly is used as a source of feed.

Mealworms such as Tenebrio molitor are already raised on an industrial scale. They can be grown on low-nutritive waste products and fed to broiler chickens. Based on current research studies on their viability, mealworms have proven to be a promising alternative to conventional protein sources, particularly soybean meal. Similarly, in Nigeria, Ijaiya and Eko (2009) analysed the possibility of substituting fishmeal (by 25%, 50%, 75% and 100%) with silkworm (Anaphe panda) caterpillar meal in relation to the growth, carcass haematology, and economics of broiler chicken production. They found that the growth performance of chickens was not affected by the incorporation of silkworm caterpillar meal (FAO).

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Studies have proven grasshoppers to be efficient as animal feeds. A study in India (Anand and Haldar, 2009) found acridids to have a higher protein content compared with the conventional soybean and fishmeal available locally. Two nutritionally rich species of the genus Oxya (Oxya fuscovittata and Oxya hyla) have the ability to produce substantial biomass due to their elevated rates of fecundity and fertility. It is estimated that Oxya could replace at least 50% of fishmeal to feed fish and poultry birds. These results support the idea of establishing acridid farms in which Oxya fuscovittata and Oxya hyla are mass-reared using Sorghum halepense grasses and Brachiaria mutica plants as food. Grasshoppers are fed to chickens raised on pastures in the Philippines, too. Chicken fed on pasture (and grasshoppers) are marketed at a higher price than chickens reared on commercial chicken feed.

Pet food

Although insect farms provide healthy protein using fewer resources than other animals, barriers such as regulatory, production, and supply issues have stymied the use of insects, except for a few pioneering dog foods and treats. As the human, livestock, and pet populations grow, so do their needs for protein. Many wild sources of inexpensive meat, such as fish, are being depleted.

In the US, the Association of American Feed Control Officials (AAFCO) has only defined one insect, the black soldier fly larvae (AAFCO #T60.117), for use in salmon aquaculture. Any new insects that will be used need to be defined/regulated by the AAFCO. Things may change soon, as more insects are being researched and studies done on possible food sources for pets and more manufacturers enter the industry. Bühler, a pet food and feed industry supplier, and Protix, an insect production company, founded Bühler Insect Technology Solutions in 2017 to develop scalable, industrial solutions for the rearing and processing of insects for the pet and animal food industry. Despite no approvals from AAFCO, pet foods made with crickets are currently in the market in the US (for example, Dockside Pets).

Insects are also used in other industries, such as medicine and cosmetics. In China, for instance, cockroaches are used to cure bone tuberculosis and can earn as much as 1,200 yuan (A$239) per kilogram. There are a number of farms dedicated to growing insects for these industries.

10.2.2. Issues/challenges facing the product

Many studies are underway on the edible insects market that could potentially change the way the industry works. Regulations are still in the early stages in many Western countries and any adverse effects from the studies, such as infectious diseases, could retard the industry’s sales and growth. There are no regulatory bodies in place in many South-East Asian nations, where edible insects in food and feed are common.

10.2.3. Supply

Production and cultivation

Insect farming is much more efficient than cattle production: 45 kg of feed produces 4.5 kg of beef or 20 kg of crickets. Raising and harvesting insects requires much less land than raising cows, pigs, and sheep. Similarly, production of 150 g of grasshopper meat requires very little water, while cattle require 3,290 litres to produce the same amount of beef. Edible insects display exponentially faster growth and breeding cycles than traditional livestock.

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Cultivation techniques vary depending on the insect type. Most insects thrive in warm climatic conditions, which is why they are found abundantly in nature in tropical countries and are also the part of regular diets in parts of tropical Asia, Africa and Latin America.

Crickets, for instance, are usually bred in containers. Heat is a necessity for breeding crickets as they require temperatures of about 32°C. The period of development for a cricket from eggs to adulthood is usually between 45 and 60 days. Post-fertilisation, female crickets can lay eggs within 24 hours and the duration is usually seven to 14 days. The female can lay between 100 and 200 eggs. The reproduction cycle can be repeated one or two times in each generation. Once the eggs are produced, the farmers take them out of the soil for incubation. Unlike bees or ants, crickets don’t have a larval stage, instead hatching fully formed from eggs after about a week and growing straight to adulthood. Commercial high protein animal feed, such as chicken feed with 14–21% protein, is used for feeding crickets after hatching until they are about 45 days old. The protein percentage is initially high (21%) and then reduced and finally replaced with a vegetable/fruit diet before harvest, which improves the taste. Three products (mature crickets, cricket eggs, and fertiliser from waste produced from the cricket farms) can be sold. The main product is the adult cricket.

Mealworms are the larvae of the mealworm beetle. The mealworm farm does not require too much capital or space to start. The larvae emerge from the ground about four to 19 days after the female beetle lays her eggs. Table 47 outlines the mealworm production cycle. The eggs and larva must be kept at a temperature of about 24–27°C. It is important that the worms have sufficient ventilation. The mealworms must be kept on a proper bedding of wheat middling and things such as maize, cornmeal, which provide nutrients. Mealworms feed on dead insects and organic matter. Farmers often add fruits and vegetables to provide moisture. Mealworms are consumed by humans baked, fried or fresh. They are also used as fish and reptile feed.

Table 47: Mealworm production times Stage Time

Egg Incubation 4–19 days (usually 4–7)

Larva 10 weeks (visible after about a week)

Pupa 6–24 days

Beetle and Egg Laying 8–12 weeks (followed by death). Egg laying starts 4–19 days (average 12) after emergence

Source: aggregated from multiple sources. Note: times depend on temperature, relative humidity, food, etc.

Each insect type takes a different time to mature. While mealworms and crickets have a short maturity phase, insects like chapulines/grasshoppers take a full year to grow from egg to maturity. They could grow faster in controlled environments. Table 48 compares the nutritional value of various insects.

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Table 48: Nutritional analysis of a few insects Source: Grubco

10.2.4. Global production

It is difficult to estimate the overall insect production and consumption across the world as most of the insects are harvested from their natural habitat. In Mexico, chapulin grasshoppers are a popular food. They are expensive compared to animal protein products. An estimated 350,000 tonnes of chapulines grow on Mexican crops every year. But harvesting them is disorganised, often illicit, and difficult. Only a few hundred tonnes of chapulines are collected for food annually, and only from a couple of regions in Mexico.

Similarly, insects have been part of the African diet for centuries. A number of insects are consumed in the African countries, the most popular being the mopane worms or mopane caterpillars. Mopane caterpillars are native to warmer parts of Southern Africa and are very common in semi-deserts, bushveld, and grassland. Mopane caterpillars are broadly considered by the indigenous people as a delicacy and are distributed throughout Angola, Botswana, Namibia, Mozambique, Malawi, Southern Zimbabwe, Zambia, Democratic Republic of Congo, and Northern South Africa. The protein content of the mopane caterpillar is 48–61% and fat content is 16–20%, of which 40% is essential fatty acids. Mopane caterpillars are also a good source of calcium, zinc and iron. An estimated 9.5 billion mopane caterpillars are harvested annually in the southern part of the African continent, a practice worth US$85 million.

Many species of grasshoppers are edible and all of them are currently pests of crops such as maize and rice. Grasshopper species, particularly Patanga succincta and Locusta migratoria, used to be a major pest of maize and rice. Today they are among the most popular edible insects. In general, the technology for mass production of grasshoppers has not been successful in developing nations as it’s not an economically viable option, but it is possible. Grasshoppers are not just considered edible, but are a delicacy across Africa and parts of Asia, the Middle East, and South America.

Although the majority of edible insects are gathered from forest habitats, innovation in mass- rearing systems has begun in many countries. The top countries in the insect-farming industry are China and Thailand. Other countries including Cambodia, Vietnam, Laos and Myanmar have developed the insect-breeding industry for domestic needs and export. Even insect products companies established across the US and EU have production bases in South-East Asian nations due to their low costs and abundant supply of insects. Entobel has a plant in Vietnam and is looking to scale up operations from its current output of 60 tonnes to 100,000 tonnes by 2025. New farms/facilities are emerging across Canada and the US, especially for cricket farming.

China

Insect farming is a unique breeding industry in rural China and is a source of income for local people. Insects are reared and bred for human food and animal feed. In some cases insects are by-products, for example, the silk from silkworms is used in the textile industry and the

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silkworm pupae then goes into human and animal feed products. The output of the silkworm cocoon industry in China in 2016 was about 875,000 tonnes, with silkworm pupae production of about 400,000 tonnes (David Waltner, 2017). The silkworm pupae is consumed locally and also exported to other markets, notably Thailand and Japan.

Thailand

Insect farming is turning into a big industry in Thailand’s rural regions. In the north-eastern region of the country, where insect consumption has been a longstanding custom, the country has about 20,000 cricket farms with 220,000 rearing pens. They produce over 7,500 tonnes of livestock a year, earning $30 million, according to the FAO. Crickets are cheaper than caterpillars because they are farmed on an industrial scale.

Palm weevil larvae farming is found mainly in south-east Thailand. They are popular food items among people in the south. Production data on palm weevil larvae is available only from 2011. It indicates that 120 farmers used 4,289 rearing basins to produce 43 tonnes of palm weevil larvae. Updated information is not available.

Weaver ants, bamboo caterpillars, and grasshoppers are the other popular edible insects. These are generally collected from the wild and are harvested seasonally. Bamboo caterpillars are mainly collected in the north. Sustainable harvesting, without cutting down the bamboo trees, is carried out by locals. Edible insect products are not only sold pre-cooked by street vendors but can now be purchased, uncooked, in frozen packages from supermarkets and also purchased online. Figure 75 shows Thailand’s edible insect markets.

Figure 74: Thailand edible insect markets Source: FAO Although many insect species are eaten by Thai people, some insects are consumed only in particular geographic areas, while others such as the giant water bug and grasshoppers are eaten nationwide. Beetles constitute the largest species group of edible insects. The giant water bug is the most popular edible insect in northern Thailand. Despite being the largest market for edible insects and manufacture, Thailand’s farming technology and practices have only been developed for a few species, such as crickets, palm weevils, and mealworms.

In other Asian, South American and African countries, despite insect consumption being common, production volumes are considerably low as most insects are harvested from nature. Insects as animal feeds are growing faster than entomophagy. South Africa is home to the world’s largest fly farm, with over 8.5 billion flies producing over 20 tonnes of larvae a day. Most of it is used in the animal feed industry.

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Production volumes are considerably lower in Western countries but are being scaled up to meet demand. At present the largest producer of crickets in the US, Aspire has an output of 22 million crickets a month from an automated facility of 2,323 m2. Aspire is working on further improving its production scales as the demand is higher than supply at present. Similarly, in France, Entomo farm has an annual output of 35 tonnes currently but is scaling up production due to the authorisation to use insect proteins in the aquaculture diets in Europe. The fish feed market is expected to account for over one million tonnes of insect feed in future. Many other companies, including Entomo farms in Canada, are also scaling up operations. Entomo supplies flour to companies such as Chapul and Exo. Insect farms are also being opened.

Industry sources estimate the global edible insects market to be worth US$34 million in 2015; however, this figure is expected to rise to about US$522 million by 2023. More than half (54%) of this market was from sales of insect-based products, such as flours and snack bars. In 2015, Asia-Pacific nations, including Thailand, China and Vietnam, were responsible for more than one-third (US$12 million) of the industry’s value.

10.2.5. Current Australian landscape

The Insect Protein Association of Australia was formed to promote the use of insect protein in the Australian food and feed environment. There are currently no food safety laws in Australia that relate specifically to insects. Insects sold as human food must comply with current Australian food laws, such as country-of-origin labelling and nutritional information requirements.

In Australia, insects for food are listed as a ‘non-traditional food’ as opposed to a ‘novel food’ (non-traditional foods that require assessment by Food Standards Australia and New Zealand (FSANZ), which cannot be sold as food or used as a food ingredient unless it is listed in the Standard); the non-traditional food status thus allows the farming and sale of insects. There are insect farms in Western Australia and Tasmania that are working at adding insects such as crickets into the mainstream food industry. Entomophagy is not new in Australia unlike the Western countries. Aboriginal and Torres Strait Islander peoples have traditionally eaten ‘bush tucker’ that may include larvae, honey ants, scale insects, lerps, bogong moths and witchetty grubs. Edible insect products are also being targeted at the athletic/body-building community. Australia is one of only 20 or so countries that boast 50 or more known edible insects and yet they are not common in the mainstream diet.

10.2.6. Retail market prices

Prices vary widely from one country to the next and depend on the type of insect and the form in which they are sold (for example, flour, bars, fresh/dried edible insects), their size, and the season.

In Thailand, crickets are very popular and costs are higher in winter compared to summer, as crickets do not eat or reproduce much in the cold season. In winter, they are sold for US$3.1–3.7/kg in the local markets while in summer they are for US$2.1–2.4/kg. Similarly, in Vietnam, crickets are sold in the domestic market for US$5/kg.

In the US and Canada, 0.45 kg of local cricket flour is sold for nearly US$38 while one kilogram of the same product can be purchased online from a Thailand merchant for US$28, even less for wholesale orders. Similarly, one kilogram each of freeze-dried mealworms, crickets and locusts are sold for about £40, £90 and £160 respectively in the UK. Table 49 shows the variation in wholesale prices for various insects in Thailand.

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Table 48: Wholesale prices in Thailand for various insects Wholesale Price Common Insects Wholesale Price (Thai baht/kg) (US$/kg) Cricket 100–120 3.1–3.7 Giant Water Bug 10 (male) 0.31 Giant Water Bug 8 (female) 0.25 Water Scavenger Beetle 120–140 3.7–4.3 Bamboo Caterpillar 300 9.3 Silkworm Pupae 120 3.7 Weaver Ant 300 9.3 Palm Weevil Larvae 275 8.5 Scarab Beetle 150 4.6 Mole Cricket 150 4.6 Short-tailed Cricket 120 3.7

10.2.7. Illicit trade or other issues

Due to the fact that this industry is new to several Western countries, it is not uncommon to find exotic insects on the black market. It is common even in countries where edible insects have been consumed for centuries. For instance, mopane caterpillars from Zimbabwe can be found in South Africa and the Congo primarily from informal/illegal trade. There is a strong illegal market in many developed countries, too, including Belgium, where exotic insects can be found in traditional markets. Many of these are posing health concerns as they are not properly sanitised.

10.2.8. Demand

There are at least two billion people across the globe who eat insects regularly, according to the FAO. The United Nations estimates that the population will reach nine billion in 2050, which could potentially outgrow traditional meat sources as people have increased their meat consumption over the years.

Globally, the most commonly consumed insects are:

• Beetles (Coleoptera) (31%) • Caterpillars (Lepidoptera) (18%) • Bees, wasps and ants (Hymenoptera) (14%) • Grasshoppers, locusts and crickets (Orthoptera) (13%) • Cicadas, leafhoppers, planthoppers, scale insects and true bugs (Hemiptera) (10%) • Termites (Isoptera) (3%) • Dragonflies (Odonata) (3%) • Flies (Diptera) (2%) • Others (6%).

There is considerable variation in the most consumed insect order by continent, country and community. While beetles are popular in many places, including Latin America, locusts and grasshoppers are more popular in Central Africa. Caterpillars are also very popular in African countries, especially the mopane caterpillars. The mopane worm common in Zimbabwe is a huge export business. It is dried and exported to Botswana, South Africa and sometimes onwards to Europe. They are mostly harvested from the plants. Grasshoppers also experience strong demand in Africa. In countries like Uganda, grasshoppers have a low price

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of US$8/kg during the summer but prices go up to US$50/kg during winter due to higher demand. Again, grasshoppers are seldom cultivated in these countries but are rather harvested as pests from common crops like rice. In Ghana, eating bugs is much more than a lifestyle choice – it's a means of survival. Other types of food are often in short supply and the country’s abundant supply of termites, which are high in proteins, fats and oils, are fried, roasted and even ground into flour for baking.

In China, 324 species of insects from 11 orders are documented as either edible or associated with entomophagy; however, only approximately 10 to 20 types of insects are regularly consumed, including crickets and silkworm larvae. In China, insects (housefly larvae and pupae, silkworm pupae, mealworm larvae) are also used to feed fish, poultry and pigs, and are cost-effective alternatives to conventional fishmeal diets. A wide variety of insects can be found on Chinese menus, from water bugs boiled and then soaked in vinegar to live scorpions doused in baijiu, a robust liquor. While Chinese citizens eat all sorts of insects, the country's finer restaurants tend to serve its delicacies in the larval state. Chinese gourmands enjoy roasted bee larvae and fried silkworm moth larvae, which are both rich in nutrients such as copper, iron, riboflavin, thiamin and zinc. At present, most of the demands are met domestically.

The edible insect trade has taken off in Thailand in recent years and the country is now South-East Asia’s largest importer of insects. FAO estimates that the Rong Klua market annually imports 800 tonnes of edible insects from Cambodia, Myanmar, Laos and China; 270 tonnes of silkworm pupae from China; and 170 tonnes of grasshoppers from Cambodia. Thailand also imports 150 tonnes of bamboo caterpillar from Laos for over US$3 million per year. Much of the demand for edible insects is met in the country itself, both from nature and by production. Figure 76 shows the most commonly consumed bugs in Thailand and their region of origin.

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Figure 75: The most commonly consumed bugs in Thailand and their source Source: UN and SMCE, Thailand In North America and the EU, more than 30 companies are currently selling insect-based products to the end consumer. Most of them are focusing on the cricket industry. The market for edible insects are predicted to grow by 30–40% over the next 10 years with the strongest growth in the EU, as the UK, the Netherlands, Switzerland and Belgium continue to invest in insect-based products for human consumption. These countries are not restricting to themselves to insect flours and snack bars but are developing new products, such as insect- based burgers using larvae, to attract more customers. The US market is also set to grow quickly as cricket-based snack bars from companies like Chapul are increasingly present in top health food/natural stores and organic supermarkets, including Whole Foods and Sprouts.

Figures 77–80 show the main importing and exporting countries for live insects and bees by value in 2016, while Tables 50–53 show the main importing and exporting countries for live insects and live bees by value and volume in 2016.

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Figure 76: The main live insect-importing countries (excluding bees) by value, 2016 (US$000) Source: Trademap.org. Table 49: Imports of live insects (excluding bees) by value and volume, 2016 Country Value Imported Volume Imported (US$000) (tonnes) World 97,698 –

US 27,553 493 Canada 11,926 – Netherlands 10,963 45 Belgium 7,807 521 Italy 4,378 429 Russian Federation 3,722 85 United Kingdom 3,529 83 Germany 3,521 390 Source: Trademap.org. Note: global volume is not available as all countries have not yet reported their data.

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Table 50: Imports of live bees by value and volume, 2016 Country Value Imported (US$000) Volume Imported (tonnes) World 64,453 – Saudi Arabia 12,034 1,046 Canada 10,393 461,707 United Arab Emirates 9,006 1,835 Spain 7,794 1,039 Netherlands 4,644 534 Japan 3,980 20 Morocco 3,321 521 United Kingdom 1,979 225 France 1,455 157 Russian Federation 1,140 523 Source: Trademap.org. Note: global volume is not available as all countries have not yet reported their data.

Figure 77: The main live bee-importing countries by value, 2016 (US$000)

Source: Trademap.org.

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Figure 78: The main exporting countries for live insects (excluding bees) by value, 2016 (US$000) Source: Trademap.org.

Table 51: Export of live insects (excluding bees) by value and volume, 2016 Country Value Exported Volume Exported (US$000) (tonnes) World 45,135 –

Israel 9,868 255 Netherlands 6,292 138 Belgium 5,054 315 Morocco 4,936 12 Canada 4,032 104 Germany 3,130 88 US 2,598 67 Kenya 1,543 – Spain 1,400 238 Source: Trademap.org. Note: global volume is not available as all countries have not yet reported their data.

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Figure 79: The main exporting countries for live bees by value, 2016 (US$000) Source: Trademap.org.

Table 52: Export of live bees by value and volume, 2016 Country Value Exported Volume Exported (US$000) (tonnes) World 52,386 – Canada 19,536 352 Slovakia 12,155 2,064 US 6,789 – Netherlands 2,939 248 New Zealand 2,659 63 Uzbekistan 1,643 1,032 Belgium 1,116 198 Israel 1,113 – Turkey 898 35 Source: Trademap.org. Note: global volume is not available as all countries have not yet reported their data.

10.2.9. Consumer perception

Insects as human food is heavily dependent on the country as well as cultural and even religious practices. In many countries (or regions as it even varies within countries), insects are a common food source; however, in many others (particularly Western nations) it is considered a taboo and disgusting. Despite this, in the face of growing threats to global food security, insects are being considered as a new source of human food and animal feed in Europe and the US.

Insect farming and consumption is still new in many Western countries unlike African, South American and Asian countries, where entomophagy is common. In Asian countries such as China and Thailand, insects have been part of the diet for a long time and some insects are

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even considered a delicacy. Insects are consumed for taste as well as nutritional values in these countries. Caterpillars, for example, provide more protein and more iron than the same quantity of minced beef. In addition, they have been part of people’s diet for so many centuries that they are considered a staple. In Thailand, fried bugs are commonly served with beer (like peanuts at a bar). Insect snacking is a regular occurrence even in major cities like Bangkok, where vendors sell crispy insects from carts at outdoor markets. One of the country's most popular snacks is jing leed, a deep-fried cricket seasoned with Golden Mountain sauce (similar to soy sauce) and pepper. Unlike Thailand, many other countries such as Ghana rely on insects for survival. Shortages of food have resulted in several ethnic groups relying on insects for nutrition. The UN is focusing on insect harvests and breeding in these nations as a means to overcome poverty.

At present, insect consumption is gaining increased attention due to its sustainability benefits and this is slowly capturing public attention worldwide, with several start-ups across the US, Canada and the UK. In Western regions, those with an expressed intention to reduce meat consumption have been found to be more likely to consume insects, as have those with an interest in the environmental and health aspects of their diets (Verbeke, 2015) or a belief that insects are good for the environment and relatively healthy or nutritious (Sogari, 2015; Ruby et al., 2015). Curiosity is also reported as a strong motivating factor (Sogari, 2015).

10.2.10. Retail market value

The market value varies widely depending on the type of insect and market. One tonne of dried silkworm pupae has an export value of US$1,000–3,000/tonne while other insects such as crickets and grasshoppers are much more expensive. Just 0.45 kg of cricket flour retails for nearly US$40 but due to the smaller scale of commercial production and demand, the prices are high. Once scales of production are established, the prices will come down (for example, 1 kg of cricket has a value of US$5 in Vietnam and US$3 in Thailand). Insect products as animal feed are lower priced. In South Africa, fly larvae is used as fishmeal and is sold for about US$1,700/tonne.

10.2.11. Legislative and regulatory environment

Being a relatively new industry in the West, edible insects are still in the early stages of regulation. In the US, UK, Canada, Australia and New Zealand, some insects are recognised as food, which falls under existing safety regulations, making these prime markets for edible insect packaged products.

North America

In the US, there is no specific set of standards for edible insects. According to the FDA, in order to market insects, they must have been bred for human consumption. Products containing insects must follow the standards required by the FDA, including bacteriological tests and good manufacturing practice certification. The label on the product must include the common name and the insects’ scientific name, and note the potential risks of allergy.

In Canada, where an insect lacks a history of safe consumption, it falls into the novel food category and needs to be evaluated by the Bureau of Microbial Hazards in the Food Directorate. Otherwise, insects can be consumed. Crickets, for instance, are not novel foods.

Europe

The EU, on the other hand, decided in 2015 to classify insects as novel food, therefore subjecting any bug businesses to a three-year approval process and a mountain of documentation before being able to sell insects in European markets. A new update to this law is pending for 2018 and could potentially change the way the industry works. At present,

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the EU laws are different from one country to the next. Italy, Spain, Ireland and many other European countries consider whole insects and their parts as novel food under the REG. 258/1997/EC and Article 2(1) of Regulation 178/2002/EC.

National authorities in the UK, the Netherlands, Denmark, Belgium and Switzerland have rejected the idea that insects require a long approval process and these markets therefore permit production and consumption of edible insect products and, in some cases, allow imports from non-EU countries. Even these countries have their fair share of limitations. There are cases where the marketing of edible insects is legal, but the import or export is not. Norway allows importation of whole insects from non-EU countries but these must first be cleared as a safe product by another EU country’s customs.

Belgium’s Federal Agency for the Safety of the Food Chain (FASFC) has produced a specific regulation for edible insects which makes Belgium one of the most advanced nations in terms of entomophagy. It has approved 10 insects: two types of crickets (Acheta domesticus and Gryllodes sigillatus), two types of locust, three variants of mealworm, two types of moths (greater wax moth, lesser wax moth), and silkworms. They have specifically detailed rules for breeding and sale, and no insects bred outside the EU are accepted.

In December 2016, Switzerland’s Federal Council (Conseil Fédéral) finally passed a law allowing the sale and consumption of three species: crickets (Acheta domesticus), migratory locust and mealworm. Among the requirements, the insects must have been bred for human consumption and after slaughter must be treated according to the criteria of food security. Switzerland only accepts imports of whole insects and only by air into Geneva or Zurich airports when coming from outside the EU.

The Netherlands allows breeding of some mealworms and crickets for human consumption. The Danish Veterinary and Food Administration allows the use of whole insects and insect products (for example, flour) and does not consider them as novel foods. The UK not only allows insect consumption, but imports from countries outside the EU.

Asia

There are no regulations with respect to the breeding, sales and export of insects in many South-East Asian nations, including Thailand and China, where entomophagy is common. While both countries are believed to be in the process of creating guidelines, they are not yet in place. In China, the only exception is the silkworm pupae, which was included in 2014 in the list of foods allowed by the Ministry of Health. China is the world's largest producer of silk, and silkworms are available in very large quantities. They are exported for food consumption, including to Thailand.

In South Korea, some insects are on the legal food list, including mealworm, crickets (not the usual Acheta domesticus, but the Gryllus bimaculatus species) and some larvae. Following this preliminary process, in 2016, the Korean Food and Drug Administration classified crickets and mealworms as normal foods, without restrictions. It is expected that other insects will be added soon to the eligibility list.

In Australia, FSANZ has decided that the super mealworm (Zophobas morio), the domestic cricket (Acheta domesticus) and the Tenebrio molitor moth are not novel foods and has granted them approval. They have not encountered food safety problems and consequently have not been put under consumption limits.

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10.2.12. Trading channels

Trading channels depend on the country. Figure 81 shows the domestic trading channels for crickets in Thailand, the market leader for edible insect consumption.

The EU novel food regulation does not yet allow insects for human consumption to be sold. Regulatory changes are expected. Nonetheless, food products are available on the market, including cricket protein bars produced by British company Next Step Foods, and are on the shelves in European supermarkets.

Figure 81: Domestic trading channels for crickets in Thailand

Source: FAO

10.3. Opportunities and threats

10.3.1. Opportunities

Sources of protein – both from animals and seafood – are predicted to decline due to population increase, reduction in arable land, and other factors. In the future, plant and alternative proteins – such as insects and algae – will need to account for greater shares of our diets alongside animal protein. Developing sustainable aquaculture systems is becoming increasingly critical as we look for healthy and affordable sources of protein. The World Bank estimates that by 2030 nearly two-thirds of seafood will be farmed. Aquaculture continued its year-on-year growth with a gain of 12% in feed production in 2016 and the EU approved the use of edible insects in the fish-feed market in July 2017.

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Australia would have good growth opportunity in the edible insect industry, especially as the industry is now being backed by the UN, FAO. Edible insect advocates are growing in number every year and this could potentially lead to further insect-based product development for both humans and animals. In some Western countries (for example, Germany) the laws are very strict with respect to insect consumption and insect-based products, while others such as the US aren’t as prescriptive. The pet food industry in the US developed several products based on pea proteins and sold them prior to approvals and this is being repeated with cricket-based pet products.

In the US, edible insect companies secured financing of more than US$20 million, suggesting strong opportunities for insects in the near future. US companies like Aspire have scaled up production (an output of 22 million crickets a month from a facility of 2,323 m2, which is automated to reduce cost and increase efficiency). Robotics is new, as much of the industry operates on manual labour in developing countries. About 30 companies have entered the insect farming industry in North America and the EU, and are currently working on developing new insect-based products for the market. Even PepsiCo is experimenting with ground-up insects as a source of protein for its snack products and believes bug-based snacks could be big by 2025.

At the consumer end, the popularity of high-protein diets, coupled with concerns about the environmental costs of meat and the growing aversion to highly processed foods, could work in the favour of an insect-based protein diet. Statistics show that even if only 1% of the US population substituted just 1% of their meat consumption for insects, millions of gallons of water in drinking and irrigation would be saved, along with thousands of tonnes of greenhouse-gas emissions from machinery and animals.

10.3.2. Threats

Overcoming consumers’ aversion to insects is a daunting challenge, but it’s not the only one hampering growth in the industry. Regulatory uncertainty is also a limiting factor. In Australia, there are significant challenges for further development of the market. For instance, there are regulatory issues to handle risks that could potentially hinder any kind of insect farming and consumption of insect products, and these take time to implement. Some insects are currently allowed and not considered novel, but, beyond these, companies need to go through the entire regulatory process and this includes imports of insect-based products.

Unlike plant-based farming, insect breeding has a whole other set of dynamics as insects can be notorious carriers of certain hazards such as parasites, fungi, toxins, chemical substances (venoms and pesticides used for farming and in the environment), and allergens. Insect farming needs to consider all these hazards, and specific standards and frameworks have to be established to reduce potential risks for the farmers and the end consumers. A study in Belgium33 showed that processed insects from illegal markets/trading were highly contaminated with micro-organisms and, as with fresh insects, require a processing step before consumption. The study aimed to show the need for a precise legislative framework on the trade of wild-harvested edible insects and standards for their processing, packaging, labelling, and storage, which could result in fewer health hazards.

33 Microbiological Load of Edible Insects Found in Belgium, Rudy Caparros Megido, Sandrine Desmedt, Christophe Blecker, François Béra, Éric Haubruge, Taofic Alabi and Frédéric Francis, 2017.

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10.4. Conclusions and recommendations

Despite insect consumption being common in many countries, unclear regulations and legislation on farming and selling insects for human consumption and feed are obstacles, especially for the export/import market. It is difficult to market insects for human consumption because they are perceived to be unhygienic. Notwithstanding long traditions of keeping bees and silkworms, and the practice of rearing insects for biological control, health and pollination, commercial insect farming for food is only now beginning to evolve.

Educating customers is the biggest challenge today as scaling up production would be relatively easy once the demand is in place (insects have a short production time phase compared to cattle or most plants). A study in the Netherlands showed that repeat consumption of insect-based products was relatively low, with most participants having tried them once (58%) or more than once, but not regularly (18%) (Jonas, 2016). Also, insect diets affect their quality, taste and freshness (similar to prawns and shellfish). Tiny Farms in Berkeley, California, uses a process called gut loading, in which crickets are fed certain flavoured or nutrient-rich foods just before they are killed – to rear crickets that taste like honey and apples, or that are high in vitamin C.

Insect proteins could experience good growth as the demand for high-quality proteins – not only among athletes – continues to grow.

Australia, like the US and Belgium, for example, could invest in edible insects and market them in the form of flour or as ingredients in products like snack bars where consumer acceptance could be quicker than selling wholesale insects to a population not used to consuming insects.

Consumers are more likely to eat processed insect products, where they cannot see the whole insect. In Switzerland, insect-based burgers were trending in late 2017. Insect protein, if marketed well, can overcome people’s concerns about processed food and can capitalise on the current trend to natural/clean labels.

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9. Jujube

10.1. Introduction

Ziziphus jujube, also known as jujube, Chinese date, Indian date or red date, has been widely used as a food and Chinese herbal medicine for over 3,000 years. Ziziphus is a genus of at least 40 different species, the most common of these being Ziziphus jujube and Ziziphus mauritiania. Due to the similarities between the two fruits as well as their names, (Ziziphus mauritiania is also known as the Chinese date and the Indian jujube) both products are sometimes reported under the common jujube nomenclature. Indian jujube is more tropical, whereas Chinese jujube is a more cold-hardy species. Both plants are grown in both countries. In Mediterranean regions, including Morocco, another variant called the Ziziphus lotus is cultivated, which is commonly known as jujube.

Jujube is grown today in parts of Russia, northern Africa, southern Europe, the Middle East and south-western US, in addition to its native South-East Asian region. Although it varies with location, the Chinese jujube usually starts to leaf out in April or May, blooms in June to July, and matures in late August to October. The tree grows 3.6–4.6 m tall. The fruit can be shaped round, oval, egg or pear. Its size varies from the same as a cherry to a plum, depending on the cultivar (there are over 400 cultivars).

More than 700 jujube species are grown in China, of which 224 are dry varieties, 261 are fresh varieties, 159 are both varieties, and a few are ornamental varieties. North China accounts for over 90% of jujube production, producing dry and fresh or dried and processed varieties, while South China accounts for the rest, mainly producing candied varieties (source: China Jujube Network/Association).

10.2. Product overview 10.2.1. Uses and applications Food Jujube fruit is recognised as a nutritious food and important traditional medicine in China, Korea, Japan, and South-East Asia. Jujubes can be eaten fresh (see Figure 82) but are even better if boiled, cooked, stewed or dried. They contain 20 times the vitamin C found in citrus fruit and are rich in vitamins B1, B2 and B6. In addition, they contain manganese, potassium, iron, calcium and phosphorous. Carbohydrate content in dried jujubes can reach 70–85%. Fresh jujube fruit contains 200–500 mg of vitamin C per 100 g fresh weight, while apple, pear and peach have 1–8 mg/100 g fresh weight.

Jujubes are rich in cyclic adenosine monophosphate. It was found that cAMP and cGMP from jujube fruits had the same physicochemical properties as pure cAMP and cGMP. The cAMP content of jujube fruits ranged from 100–150 nmol/g–1 of fresh fruit and from 100–600 nmol/g–1 of dried fruit, and the cGMP content was 30–60 nmol/g–1 dried fruit and it increased 90 times as the fruit ripened. The cAMP is a second messenger in our body, and the jujube fruit could be used as a natural source of cAMP (Li, 2012). Jujube fruit has high total phenol content and total antioxidant activity.

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Figure 80: Chinese jujube

Most of the vitamin C gets lost during the sun-drying process; on average only 10% remains. To get the most benefit of vitamin C, eating fresh jujube fruit is much better. Figure 83 shows the nutritional profile for raw jujube.

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Figure 81: The nutritional profile for raw jujubes Source: USDA

Popular jujube uses in China

Dried jujube: also called red date, this is the dominant jujube product for the domestic and export markets in China. Fruits are picked when they are fully red or fully mature because the more mature, the higher their sugar content and drying quality. After picking, fruits can be dried by air, sun, or heat. Heat drying is the optimal method because it retains more vitamin C, leads to better fruit quality, and avoids disease-related fruit losses. Red date can be consumed directly as a snack; used in porridge, stew, soup, or tea; or further processed into other products, such as jujube paste (Shengrui, 2013). Red dates are cooked with rice or millet.

Candied jujube: also known as honey jujube, candied jujube is popular in China and India. Fruits are picked at the white mature stage and 60–80% of the vitamin C content can be kept, which is much higher than the sun-dried jujube. Fruit surfaces are sliced with rows of blades or needles to enhance sugar-soaking and product appearance (Guo and Shan, 2010).

Spirited jujube: fruits are picked during the fully red stage and 60–70% of the vitamin C content is preserved. Spirits of 130 to 140 proof or good-quality hard liquor is used for this product. The jujube fruits are poured into the liquor until they are fully covered and then sealed in jars for up to a year (Sengrui, 2013).

Smoked jujube: this product is mainly produced from the cultivar in Shandong Province. Fruits are picked at the fully red stage, pre-cooked in boiling water, and then smoked. The product can be eaten directly or used in cooking.

Roasted jujube: red dates are used for this purpose. The fruit is first pitted and then sliced vertically into 3 mm wide pieces before roasting. Fully mature fresh fruit of drying cultivars can be used but they require a longer roasting time than dried fruit.

Jujube jam: full red fruits are used for jam, which can preserve 65–80% of the vitamin C content. The fruit needs to be skinned and pitted for this purpose (Shan 2010).

Jujube paste/filling: jujube filling is widely used in the pastry industry in China and is one of the traditional fillings of mooncakes (Sengrui, 2013). It can also be directly spread onto

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bread. Jujubes can be used to make juice, wine and vinegar, and is widely used in the culinary world.

In addition to these uses, jujubes are pickled in Bangladesh, made into food/beverage in Korea (daechucha teas and samgyetang soup), sold as part of a cold beverage in Vietnam (ching bo leung), used to make honey in Morocco and an alcoholic syrup in Italy (brodo di giuggiole), and eaten as snacks or alongside dessert in Lebanon, Jordan and other Middle Eastern nations.

Medicinal

The Chinese herbal medicine industry uses jujube in the form of a tea to treat patients for insomnia. Scientific research supports this, as the seed of the Chinese jujube could prolong hexobarbital-induced sleeping time. It is known to possess sedative effects. The seeds and fruits are believed to relieve stress, and they also possess antifungal, antibacterial, anti-ulcer and anti-inflammatory properties. Jujube is also used in Kampō medicine due to its healing, immune-stimulant and antioxidant capabilities. Kampō medicine, which is based on traditional Chinese medicine but modified to Japanese culture, is very popular and widely used in Japan. It is also popular in Taiwan, with slight modifications, and exported to Western countries. The World Health Organization (WHO) estimates that more than 30% of over-the- counter drugs sold in Japan are prepared using botanical products.

Clinical trials have assessed jujube’s usefulness in treating dietary issues and neonatal jaundice. In Middle Eastern regions, it is used to treat the symptoms of the common cold: sore throat and coughing. Ziziphin (a compound found in the leaves of the jujube plant) can suppress the ability to perceive tastes.

Other uses

Jujube wood is strong, durable and smooth, and has been used to make a wide variety of items ranging from bowls to musical instruments.

10.2.2. Issues/challenges facing the product

In China, the dominant diseases of jujube are witch’s broom and fruit splitting. Witch’s broom is caused by phytoplasma bacteria – Candidatus Phytoplasma ziziphi – and can destroy an entire orchard. The worst fruit splitting, resulting from heavy rainfall near harvest time, can ruin the entire season’s crop. The severity of the problem depends on water management during the growing season, precipitation around the fruit maturation season, and cultivar resistance to splitting. Maintaining a stable water supply during the growing season will ease splitting, but the cultivar is what makes the ultimate difference. Peach fruit moth (Carposina niponensis) is the number one pest for jujubes in China.34

Another key challenge facing suppliers of jujube is the return on investment. Even in China the production costs are high, resulting in at least five to seven years before the farmer has positive cashflow.

34 Jujube: Chinese Date in New Mexico Guide H-330, Shengrui Yao.

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10.2.3. Supply

Production and cultivation

The Chinese jujube is one of the toughest and most tolerant of all fruit trees, being able to withstand very poor growing conditions. It can take a remarkable amount of neglect without apparent harm, and can survive drought, extended periods of waterlogging, and temperature extremes as low as –30°C or as high as 50°C. Despite this, it grows best in hot climates where, after adequate rain early in the growing season, the summer is long, hot and dry, there is plenty of sunshine, and nights are warm. Drought may result in fruit drop.

The jujube is a medium-size tree, up to about 8 m, with glossy green, deciduous foliage. It thrives best in warm, dry climates. Fruits develop well in an optimal temperature of 24–26°C. Jujubes are easily damaged by wind and should be netted to protect fruit from birds. The tree requires less water and has a higher salt tolerance than most fruit crops. It adapts to drought conditions and not only survives but produces reasonable yields under severe drought. Despite this, irrigation can increase the quality, yield and size of the fruit and reduce fruit drops.

Jujube grows well on a variety of soils. It prefers sandy loam or lighter soil but will grow on well-drained clays. The jujube tree can tolerate saline, alkaline or slightly acidic soils (pH 5– 8.5). While they can grow in a range of soils, improvement of acidic, alkaline, salty and sandy soils will improve growth and production.

The trees require about 3–5 megalitres of water per hectare over the summer months.

Jujubes should be set out 3–4.5 m apart as they require high light intensities for good production. On setting out new, bare-root trees, top the plant to about 1 m and remove all side branches to leave only a whip. New, stronger branches will emerge from each bud just below the point where the old branches were pruned.

While most cultivars are self-fertile, pollination can be enhanced through the introduction of bees. The pollen is sticky and therefore wind pollination is ineffective. Pollen viability is low in most cultivars. Jujube trees typically have abundant flowering but low fruit set. Although most trees are commonly propagated using vegetative methods, jujube trees will grow dependably from seed. The seeds require little monitoring or care once sown, but they must be thoroughly cleaned and pre-treated before planting to ensure successful germination. Most grafted trees bear some fruit in the season that they were grafted.

As the fruit begins to mature, its colour changes from dark green to yellow-green, which is known as the creamy, white mature stage. As maturation continues, brown/red spots develop at the petiole end or randomly in the middle of the fruit. The colour further changes to half red/half creamy, and eventually becomes fully red/brown, which is the fully mature stage. Fresh fruit harvested when first ripe can be stored at 5°C for two weeks or more without losing quality. The best time to harvest drying cultivars is when they are fully red. In full yield, a tree can produce 30–40 kg of fresh fruit per tree with an estimated yield of 20–30 t/ha.

In humid areas, fruits must be harvested when they are fully red in colour and dried as soon as possible to avoid yeast or mould infection. Manual harvest is preferable for fresh eating cultivars. For drying cultivars, growers in China lay tarps below trees and then shake the trees or use long poles to dislodge fruits. Mechanical harvesting using trunk shakers may be applicable for the production of a large acreage of drying cultivars.

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10.2.4. Global production

China is the largest producer of Chinese jujube, accounting for over 90% of the market, and is the only exporter. Other countries that produce it include the US, India, Australia, Korea, Russia and Madagascar. It’s also produced in Southern Europe and the Caribbean Islands. Jujube trees grow in over 40 countries, but on a small scale. Jujube is widely cultivated, with a total growing area of over 2 million hectares and annual production of over 8 million tonnes of fruit.

China

In 2015, China produced 8.07 million tonnes of fruit (National Bureau of Statistics, China), an increase of 9.9% on 2014. On average, production each year from 2011–15 increased 10.5%, with a significant growth from 2013 to 2014 (see Table 54).

Table 53: National production data of Chinese jujube, 2011–15 (million tonnes) 2011 2012 2013 2014 2015 542.68 588.71 634 734.53 807.58 Source: National Bureau of Statistics, China Note: 2016 overall market statistics are not yet available.

Currently most of the jujubes come from Heibei, Shangdon, Xinjiang, Shanxi and Shangxi provinces in China. Figure 84 shows the cultivation areas and major production areas. Shanxi province is the largest producer of jujube in China. In Shanxi the top counties involved in the production of jujube are Lin, Yulin and Linqu. In 2016, Lin had a production area of more than 50,000 ha and annual production of 220,462 tonnes, while Yulin had a production area of 1,133,000 ha and annual production of 675,000 tonnes.

Linqu had about 200,000 acres of fresh dates, including 60,000 acres of greenhouses, with an annual output of more than 300,000 tonnes of fresh dates worth 1.2 billion yuan. Linqu has become the country's largest production base of fresh dates.

Other provinces are involved in jujube production, but their volumes are considerably lower. For instance, the annual production from Wenchuan county in Sichuan province is estimated at 155,000 kg. About 100 ha are grown here.

Figure 82: The cultivation areas and major production areas of jujube in China Source: Review of Dietary Ziziphus jujuba Fruit (Jujube): Developing Health Food Supplements for Brain Protection Jianping Chen, Xiaoyan Liu, Zhonggui Li, Airong Qi, Ping Yao,ZhongyuZhou, Tina T. X. Dong, and Karl W. K. Tsim

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More than half the produce is processed and dried and sold as dried fruit, both domestically and internationally. Farmers across provinces are encouraged and assisted by their respective counties to apply for new technologies, fertilisation techniques and pest prevention and control strategies.

India The annual production of jujube in India in 2016–17 was estimated at 526,000 tonnes with a production area of 50,000 ha (figures include the Indian jujube). This is nearly 32% growth from 2014–15 data, outlined in Table 55. The largest producing states are Gujarat and Orissa.

Table 54: Production of jujube in India, 2014–15 State/Union Territory Area (’000 hectares) Production (’000 tonnes) ANDHRA PRADESH 1.06 18.58 CHHATISGARH 3.90 71.04 GUJARAT 11.88 120.92 HARYANA 4.19 39.09 HIMACHAL PRADESH 0.03 0.01 JAMMU & KASHMIR 4.75 9.86 JHARKHAND 1.13 1.25 KARNATAKA 0.66 18.45 MADHYA PRADESH 4.23 46.00 MAHARASHTRA 0.06 0.20 NAGALAND 0.03 0.25 ODISHA 7.58 39.45 PUNJAB 1.71 28.58 RAJASTHAN 0.86 7.00 TRIPURA 0.06 0.00 TOTAL 42.12 400.67 Source: National Horticulture Board, India 2014–15

Other countries that cultivate jujube include South Korea, Japan, Thailand, Malaysia, Myanmar, Bangladesh, Mongolia, Afghanistan, Pakistan, Turkmenistan, Uzbekistan, Azerbaijan, Israel, Iran, Iraq, Syria, Lebanon, Palestine, Australia, Cyprus, Turkey, and the US. However, their volumes are low. In South Korea, jujube is mainly grown in Jeollanam-do, Jeollabuk-do, Chungcheongbuk-do and Gyeongsangnam-do. The cultivated area is about 5,000 ha, making it the third-largest producer of Chinese jujube. While South Korea does have export-level production, its low yield and quality, and higher price points, make exporting difficult. As a result, South Korea’s production levels have not increased in decades and its demands are met by China.

10.2.5. Current Australian landscape

Chinese jujube trees have grown successfully in Australia for 20 years. The tree is well adapted to Australia's climate and soil types, growing in a range of areas. Western Australia is the leading jujube-producing state, with an estimated 12,500 trees planted on about 20 ha.35

35 Chinese jujube industry takes root in Western Australia, Rachelle Johnstone & Fucheng shan, 2016.

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In Western Australia, there are about 40 jujube growers in the south-west region, the Perth Hills and the Northern Rangelands. Jujubes are grown in Manjimup, Bridgetown, Donnybrook and Coolup in the south-west; Gidgegannup in the Perth Hills; Esperance and Denmark on the South Coast; Geraldton and Cue in the mid-west; and York, Boddington, Kukerin, Bindoon and Beverley in the wheatbelt region.

Plantings of jujube trees have increased in the last three years as awareness of the crop has increased. Locally grown Chinese jujubes are sold at local markets and in some Asian supermarkets in Perth.

10.2.6. Retail market prices

As the key exporter, producer and consumer of Chinese jujubes, China has price control. Table 56 compares the retail prices of the fresh produce from China and Australia.

Table 55: Fresh jujube retail market prices, 2017 Country Estimated Price (US$/kg) Estimated Price (A$/kg) China (fresh produce) 5–6 6.4–7.6 Australia (fresh produce) 6–16 8–20

Most of the exported jujubes are dried. As Table 57 shows, prices in China vary, depending on the county where they are produced, the product cultivar and the size of the fruit.

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Table 56: Chinese jujube domestic market prices, 28 September 2017 (yuan/kg) Product Unit High Low Average Market Name Price* Price* Price Red Jujube 70 10 40 Taiyuan, Shanxi Hexi agricultural and sideline products market Green 12.76 Tianhui supermarket Honey Jujube Winter 25.6 Tianhui supermarket Jujube Winter Shaanxi/ 22 18 20 Zhejiang Jinhua agricultural Jujube boxed products wholesale market Red Jujube Hebei/kg 24 8 16 Henan Wanbang International Agricultural Products Logistics Co. Ltd Winter Shanxi/kg 22 10 16 Henan Wanbang International Jujube Agricultural Products Logistics Co. Ltd Winter 8 6 7 Beijing Great Ocean Road Jujube agricultural wholesale market Winter Shanxi, 60 14 30 Jinan embankment fruit Jujube Shaanxi wholesale market Fresh Dates 7 1.8 3.61 Wuxi Xicheng fruit wholesale market Green 10.71 1 3.11 Wuxi Xicheng fruit wholesale Jujube market Winter 35 1 8.05 Wuxi Xicheng fruit wholesale Jujube market Winter Shaanxi 6.5 5.5 6 Liaocheng Zhou Gonghe Jujube Farmer city Source: Chinese Jujube Network Note: * when available

10.2.7. Illicit trade or other issues

There are no known illegal/illicit trade activities in the Chinese jujube industry.

10.2.8. Demand

Most Chinese jujube production is consumed domestically in China. Linqu County in Yuncheng City held the first jujube festival, attracting visitors and jujube merchants from all over the country and promoting the fruit as well as the local tourism and service industry. Other counties are also promoting tourism linked to jujube, for example, with zao (Chinese for Jujube) expos and fairs.

More than 500,000 kg of fresh dates are sold through e-commerce platforms in China. Here, the produce appears earlier than the regular season. The Chinese Government, as well as individual counties and provinces, are rigorously involved in the jujube industry, working to improve production, technology and marketing standards.

China’s exports

China is the only exporter of Chinese jujube. It exported 7.8 million tonnes in 2015; however, with total production over 807 million tonnes, exports are a small segment of its production.

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On average, exports are a maximum of 1% of annual production. Jujube exports are covered under other fruits by most custom databases, including UN Comtrade.

China’s exports of Chinese jujube cover more than 20 countries in Western Europe, North America and Africa, but the key importers of Chinese jujube are in Asia (including Korea, Japan, Thailand, Vietnam and Taiwan), the US, Canada, Mauritius, South Yemen and China's Hong Kong and Macao regions. Hong Kong, Macao, Japan, South Korea, Singapore and Malaysia account for 80–90% of China’s total exports.

The nutritional and medicinal properties of jujube are relatively unknown outside South-East Asia. However, there is a growing interest in traditional Chinese medicine and jujube’s consumer market has gradually increased.

10.2.9. Consumer perception In China, grapes, plums, jujube and kumquats (as a combination) are symbols of good luck, wealth, fortune, gold, prosperity and fertility. Hence jujube is among the most consumed fruits in China.

The jujube, or Chinese date, has potent health benefits and both the seed and the fruit are frequently used in traditional Chinese medicines. It is gaining attention in other countries, too, as both a dried fruit and for nutraceutical purposes. It has calming properties and is a good source of natural antioxidants. Jujube has been used in traditional Chinese medicine to improve sleep and treat insomnia for centuries. It is also used to treat constipation and improve immune and brain health in China. Jujubes are widely promoted for their health benefits in China.

Scientific research on the jujube seed in recent years shows it is as effective as the anti- anxiety medications Diazepam (Valium) and Buspirone for reducing anxiety.36 Its mental therapeutic effects come from the glycoside saponins, called jujubosides, found in the fruit. Jujube seed appears to have neuroprotective properties by fighting toxins in the neurons of the brain. Jujube extract has been shown to increase proliferation of cells in the hippocampus, thereby blocking the effects of neurodegeneration.

Despite its myriad health benefits, it is not yet popular in health and wellness sectors outside South-East Asia. Given the current high growth in the nutraceutical and functional foods industry by health-conscious customers and the trend to clean label, natural foods, it may be possible for Chinese jujube to grow in the nutraceutical market as a supplement. Euromonitor data estimates that the US vitamin and dietary supplement market will increase by 53% to $28.7 billion by 2021. The global nutraceutical industry was estimated to be worth about $200 billion in 2016.

10.2.10. Retail market value

In the export market, dried jujube has a market value of about $2,500–4,500/tonne with organic dried jujube commanding more. In Australia, for instance, fresh local Chinese jujubes are sold in Perth at wholesale prices of $8–20/kg with the local dried product sold at retail prices of $25–45/kg. Imported products are sold at a much lower price.

36 Anxiolytic Effect of Seed Of Ziziphus Jujuba In Mouse Models Of Anxiety, Journal Of Ethnopharmacology, 72(3), 435-441.

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10.2.11. Legislative and regulatory environment

Each country has a set of regulations that China must follow to export jujubes. In China, the trade industry for jujubes follows the rules set by the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ).

United States

The importation of fruits and vegetables for consumption into the US is regulated under Title 7, Part 319.56 of the Code of Federal Regulations (7 CFR § 319.56, 2012). Fresh jujube imports from China are not authorised at present; however, there are ongoing risk assessment studies that may change its entry status. Dried, preserved fruits from countries/areas other than Hong Kong SAR, the People’s Republic of China and Taiwan that are subject to detention without physical examination due to undeclared and/or non-permitted sweeteners are addressed in Import Alert #45-07. Dried fruit regulations are similar to those in Europe.

Europe

The requirements for European countries include:

 Minimise pesticide residues – pesticide residues constitute a crucial issue for suppliers of fruits and vegetables. With the objective of avoiding health and environmental damage, the EU has set maximum residue levels (MRLs) for pesticides in and on food products. Products containing more pesticides than allowed will be withdrawn from the European market. Buyers in several countries such as the UK, Germany, the Netherlands and Austria set MRLs that are stricter than those specified in European legislation37  Comply with phytosanitary requirements – fruit and vegetables exported to the EU must comply with the European legislation on plant health. The European Commission has laid down phytosanitary requirements to prevent the introduction and spread of organisms harmful to plants and plant products in Europe. These requirements are managed by the competent food safety authorities in the importing and exporting countries38  The most commonly requested certification for fresh fruit is GLOBALG.A.P., a pre- farm-gate standard that covers the whole agricultural production process, from before the plant is in the ground to the non-processed product  Other standards include o International Food Standard (IFS) o Food Safety System Certification (FSSC22000) o Safe Quality Food Program (SQF)  Other requirements include organic farming certifications and social or sustainable labels for fresh fruit and vegetables, such as Fair for Life or FairTrade.

South Africa

To import dates into the country, the exporter needs to comply with the regulations set by the Department of Agriculture, Forestry and Fisheries (DAFF) of South Africa. These include approval of production sites, packing houses and storage facilities. Export and domestic fruits cannot be packed together. DAFF subjects imports to continuous surveillance programs to ensure pest management and compliance. DAFF has stringent rules, for example on packaging, cleaning and storage, to ensure the fruits are free of quarantine pests and

37 CBI (Centre for Promotion of Imports from developing countries), Europe. 38 ibid.

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diseases, which include export and domestic fruits not being packed on the same line. If pests such as Bactrocera correcta, B. cucurbitae, B. dorsalis and B. diversa are detected, the entire set of fruits is returned or destroyed. South Africa has a minimum inspection of 1,200 fruits irrespective of the size of the imports for the Chinese jujube market. Like the EU, South Africa demands a phytosanitary certification.

10.2.12. Trading channels

China’s jujube market is regulated by associations at every province level that handle the wholesale, retail and import and export markets. For example, Shanxi Jujube Wholesale Association handles the wholesale and trade industry in Shanxi province. According to the Chinese Jujube Network, there are more than 40 jujube research institutions and associations in China, including four in Beijing, eight in Hebei, six in Shanxi, eight in Shandong, one in Shanxi and six in Xinjiang.

The Chinese Jujube Network (www.Zao.com.cn) handles the jujube industry in China, connecting buyers and sellers with business opportunities. It publishes monthly/annual price data, information on new cultivation/processing/harvesting techniques, and general information on the crop, such as climatic conditions.

Figure 85 shows the trading channel for imports of fresh jujube to the US from China.

Figure 83: Pathway for imports of fresh jujube from China into continental US Source: USDA

10.3. Opportunities and threats

10.3.1. Opportunities

In Australia, demand for the fruits continues to outweigh supply on the local market (source: West Australia Jujube Growers Association).

Western Australia's proximity to South-East Asia and its counter season production to the Northern Hemisphere is an opportunity to market Australian-grown fresh Chinese jujube to meet increasing off-season demand in these countries. West Australian jujube growers also believe the crop’s drought resistance and high salt tolerance would be beneficial in fighting salinity, which is a challenge facing sustainable agriculture in the state.

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With higher health awareness, people are paying more attention to the benefits that fruit provides, like ascorbic acid, phenols, antioxidants, and medicinal effects, and this could help jujube’s consumption and acceptance rates outside its typical markets.

10.3.2. Threats

While there is demand in the local Australian market for jujube, China’s jujube prices were down in 2016 due to high inventory and production. In fact, China had to use the excess inventory as livestock fodder. As a result, many farmers in some provinces like Xinjiang are leaving the market. For Australia, this could be both a threat and an opportunity: Australia could potentially export to China if its production level drops, although China’s high inventory and low prices suggest Australia’s market for jujube would do well domestically but not at the international level.

South Korea was previously involved in exports in the jujube industry but reduced its cultivation due to price competition from China. China’s jujube was not only cheaper, but its yield per tree was high and the quality better, leading to South Korea’s withdrawal from the export market. At present, South Korea supplements local production with imports from China (source: Chinese Jujube Network).

10.4. Conclusions and recommendations

Australia’s jujube industry is well adapted to Western Australia and, with continuous research, expansion and good promotion, it could grow into a valuable industry over the next few years. Australia is one of the few countries expanding its jujube production; however, it faces a serious threat from China in the international market. While the domestic market is willing to pay higher prices for home-grown jujube, this may not be the case in many other South-East Asian nations, which are used to importing their jujubes at a lower value from China. Due to lower prices and the longer return-on-investment period, some farmers in Xingjiang province are exiting the market, which is a big red flag for Australia.

The nutritional and medicinal properties of jujube are relatively unknown outside South-East Asia. However, there is growing interest in traditional Chinese medicine and the consumer market for jujube has been expanding gradually. Figure 86 shows the growth of the pharmaceutical industry in China since 2011.

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Figure 84: Growth of the Chinese pharmaceutical industry in China, 2011–15, 2016–20 (yuan bn) Source: GF Securities Note: TCM = traditional Chinese medicine; CAGR = compound annual growth rate In China, the jujube industry is growing at an annual rate of 9–10%. The global nutraceutical industry is growing at a compound annual growth rate of 6–7%. There is a good possibility for further growth if jujube’s presence in the nutraceutical and dietary supplement industry can be expanded. There is increasing consumer demand for green label products, and manufacturers have responded in kind by expanding their product list. Even supermarkets and drugstores are expanding the product ranges on their shelves, which has resulted in a sharp increase in sales of herbal supplement products recently.

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10. Medicinal Mushrooms

10.1. Introduction

Mushrooms are typically the fruit bodies of the Agaricales. However, not all members of the order Agaricales produce mushroom fruit bodies, and many other gilled fungi, collectively called mushrooms, occur in other orders of the class Agaricomycetes. For instance, the Chanterelles (Cantharellus), the Hymenochaetales, Lentinellus, Rickenella and many more varieties are today collectively known as mushrooms.

Medicinal mushrooms are those that produce any significant medically active compounds which aid with antibiotic, anti-cancer, cholesterol, immune system, cardiovascular health and so on. Several varieties of mushrooms are currently edible and medicinal, the most popular being the shiitake, reishi and morel. Medicinal mushrooms have profound health benefits. They have traditionally been used in ancient therapies, and recent studies have also proved their favourable effects. Some species, such as chaga, reishi and cordyceps, have been related to various health benefits, targeting immune support and brain health, being positioned as energy boosters, or helping to promote a good night's sleep.

Some of the popular edible and medicinal mushrooms include:

 Morchella esculenta, commonly known as morel, is a species of fungus in the Morchellaceae family of the Ascomycota and is known to be a good source of amino acids.  Lentinula edodes, commonly known as the shiitake, is one of the most popular edible mushrooms in the world. Native to East Asia, it is used in traditional medicines as a source of lentinan, AHCC, and eritadenine.  Ganoderma lucidum, known as the lingzhi or reishi, is another popular edible mushroom native to East Asia and is the oldest known medicinal mushroom. Used in traditional medicines for over 2,000 years, this mushroom is used to treat cardiovascular diseases and diabetes, and is believed to possess anti-cancer properties (although there is insufficient research on this claim).  Schizophyllum commune, also called the split gill, is predominantly found in Myanmar, Thailand, Malaysia, Indonesia, Madagascar, Nigeria and north-eastern India. It is known for its high medicinal value and aromatic taste profile. It has recently attracted the attention of the medicinal industry for its immunomodulatory, antifungal, antineoplastic and antiviral properties, which are higher than those of any other glucan complex carbohydrate.  Inonotus obliquus, commonly known as the chaga, is a fungus in the family Hymenochaetaceae. It is parasitic on birch and other trees and is currently trending as a superfood across the world.  Trametes versicolor, also known as Coriolus versicolor or turkey tail, is found widely throughout the world and is known to have produced the protein-bound polysaccharides PSK and PSP (polysaccharopeptide) from different mycelia strains. The turkey tail is used as an adjuvant in the treatment of gastric, esophageal, colorectal, breast and lung cancers.  Cordyceps sinensis, also called cordyseps or caterpillar fungus, is one of the most widely used fungi in anti-cancer formulas in Chinese medicines. It acts as an immune stimulator by raising cancer- and virus-fighting T cells and natural killer cells, and prolongs the life of white blood cells, improving resolution of infections. It has demonstrated anti-tumour properties.

Other medicinal mushrooms exist, but some are inedible. For example, Hydnellum peckii is a very bitter mushroom that is inedible due to its taste. It contains anticoagulant properties and

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is used in traditional medicine. Even the most common mushroom, the Agaricus, is used in the medicinal industry as a treatment for cancer, type 2 diabetes, high cholesterol and liver diseases.

10.2. Product overview 10.2.1. Uses and applications Medicinal mushrooms are thought to possess approximately 130 medicinal functions, including anti-tumour, immunomodulation, antioxidant, radical scavenging, cardiovascular, anti-hypercholesterolemic, antiviral, antibacterial, anti-parasitic, antifungal, detoxification, hepatoprotective, and antidiabetic effects.39 Modern clinical practice in Japan, China, Korea, Russia and several other countries relies on mushroom-derived preparations. Mushrooms have also played an important role in the treatment of ailments affecting the rural populations of eastern European countries. The most important species in these countries are Inonotus obliquus (Pers.:Fr.) Pilát (Chaga), Fomitopsis officinalis (Vill.:Fr.) Bond. et Singer (wood conk or agaricon), Piptoporus betulinus (Bull.:Fr.) P. Karst. (birch polypore), and Fomes fomentarius Fr.: Fr (tinder bracket).40 These mushrooms are used to treat a host of diseases including, gastro-intestinal issues, cancer and asthma. Medicinal mushrooms present an unlimited source of polysaccharides (especially β-glucans) and polysaccharide – protein complexes with anti-cancer and immune-stimulating properties.

Medicinal/edible mushrooms are used in a wide range of industries, including:

 Food  Dietary supplements – nutraceutical and pharmaceutical  Biocontrol agents such as insecticides and pesticides  Beauty and cosmetics.

The biggest market for mushrooms is the food industry, followed by the dietary supplements/nutraceutical industry, where sales of mushroom-based products are growing quickly each year. Mushrooms are extremely abundant worldwide and show diversity: the number of mushroom species on earth is estimated at 150,000–160,000. Yet, perhaps only 10% of the named species are known to science. In various tropical areas, 22–65% of mushroom species have not yet been described.41

Various mushroom polysaccharides prevent oncogenesis, show direct anti-tumour activity against various synergetic tumours, and prevent tumour metastasis. Their activity is especially beneficial when used in conjunction with chemotherapy. Mushroom polysaccharides can be considered as multi-cytokine inducers, able to induce gene expression of various immunomodulation cytokines and cytokine receptors.42 Cancer is the second leading cause of death globally, and was responsible for 8.8 million deaths in 2015. Globally, nearly one in six deaths is due to cancer. According to estimates from the International Agency for Research on Cancer (IARC), in 2012 there were 14.1 million new cancer cases and 8.2 million cancer deaths worldwide. By 2030, the global burden is expected to grow to 21.7 million new cancer cases and 13 million cancer deaths.

The most common causes of cancer death are the following cancers:

 Lung (1.69 million deaths)

39 Medicinal mushroom science: Current perspectives, advances, evidences, and challenges, Wasser SP, 2014. 40 The role of culinary-medicinal mushrooms on human welfare with a pyramid model for human health, Int J Med Mushrooms, Chang ST, Wasser SP, 2012. 41 Global species number of fungi: Are tropical studies and molecular approaches contributing to a more robust estimate?, Hawksworth DL., Biodivers Conserv 2012;21:2425–3. 42 Innate immunity induced by fungal b-glucans via dectin-1 signaling pathway, Lee DH, Kim HW, Int J Med Mushrooms 2014;16:1–16.

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 Liver (788,000 deaths)  Colorectal (774000 deaths)  Stomach (754,000 deaths)  Breast (571,000 deaths).

Source: WHO

Immunoceuticals isolated from more than 30 medicinal mushroom species have demonstrated anti-tumour activity in animal treatments. However, only a few have been tested for their anti-cancer potential in humans.43 A mushroom nutraceutical is a refined or partially refined extract or dried biomass from either mycelium or the fruiting body of a mushroom, which is consumed in the form of capsules or tablets.

The latest trend in the medicinal mushroom industry is the chaga mushroom. Chaga’s benefits have long been known in countries including China and Russia; however, it is just gaining popularity in Western countries. Chaga contains the compound betualin, which helps lower cholesterol and balance blood sugar by increasing insulin sensitivity. Chaga extract also has a very high antioxidant level compared with other high antioxidant foods, far exceeding that of pomegranates, blueberries and acai extract, which is a key reason it is trending in the health and wellness industry (see Figure 87). Chaga stimulates bile flow, which is important for fat digestion. It also reduces inflammation in the digestive tract. It is also anti-inflammatory, boosts the immunity, and is strongly antibacterial and antiviral, which makes them helpful in preventing and recovering from cold and flu. Chaga are also known to dissolve kidney stones. Finally, chaga contains melanin, which helps to fight radiation and tumours.

Figure 85: Comparison of antioxidant levels Sources: Brunswick Laboratories (chaga extract); USDA (acai extract, pomegranate and blueberries) Notes: ORAC = oxygen radical absorbance capacity; molTE = mol trolox equivalent

43 Medicinal mushroom science: Current perspectives, advances, evidences, and challenges, Wasser SP, 2014

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10.2.2. Issues/challenges facing the product

Mushrooms are highly perishable and get spoiled due to wilting, veil-opening, browning, loss of texture, aroma and flavour. Therefore, they are mostly exported as dried product. The large-scale cultivation of mushrooms is labour intensive.

10.2.3. Supply

Production and cultivation

Medicinal mushrooms include many different varieties of mushrooms that can either be cultivated or harvested from the wild. Over 20 species are cultivated commercially in more than 70 countries across the world. The top countries in 2016 that cultivated mushrooms were China, Italy, the US, the Netherlands and Poland.

Most mushrooms are a good source of vitamins B, C and D, including niacin, riboflavin, thiamine and folate, and various minerals including potassium, phosphorus, calcium, magnesium, iron and copper. They provide carbohydrates, but are low in fat and fibre, and contain no starch. Edible mushrooms are an excellent source of high-quality protein (19– 35%), and white button mushrooms contain more protein than kidney beans. Their cultivation takes about three months: starting with spores, which grow into mycelium and then expand into a mass with sufficient volume and energy to form mushrooms (see Figure 88). They require high humidity and an ideal temperature range of 15–18°C.

Figure 86: Life cycle of a mushroom

As spores, released from the gills, germinate and develop they form hyphae, which are the main mode of vegetative growth in fungi. Collectively, these are referred to as mycelium, and these feed, grow and ultimately produce mushrooms (in most species). The appearance of fruiting bodies or mushrooms varies according to the species, but all have a vertical stalk (stipe) and a head (pileus or cap). The underside of the cap has gills or pores from which mushroom spores are produced. The mushroom produces several million spores in its life, and this life cycle is repeated each time the spores germinate to form the mycelium (FAO Mushroom Cultivation process).

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Mushrooms get their nutrients in three ways – saprobic (grows on dead organic matter. These mushrooms can be harvested from the wild and are valued as a source of food and medicine. However, the lack of organic matter can affect the production); symbiotic (the majority of wild edible fungi species commonly form mycorrhizas with trees, where the fungus helps the tree gather water from a wider catchment and delivers nutrients from the soil that the tree cannot access and the tree provides the fungus with essential carbohydrates); and parasitic. Mushrooms can grow in a number of mediums, including rice straw, sawdust and even coffee pulp. The crop should be protected from sunlight and strong winds at all times, which can cause the mushrooms to dry out. While the most commonly grown variety is Agaricus, there is now considerable demand for other varieties, notably shiitake and chaga. In the US, shiitake sales value is up from US$32.9 million in 2015/16 to US$40.7 in 2016/17 despite a production increase of just 4% in volume. This is due to its high demand resulting in higher prices and a 23.7% growth in terms of overall value sales for shiitake in the US (Source: USDA).

Cultivation requirements:

 Reishi, which is the most-used medicinal mushroom in the world today, has been used in traditional Chinese medicines for over 2,000 years. This mushroom grows on dead or dying astern hemlock, a very common tree. Reishi is also grown on the sawdust of broad-leaved trees (for example, mango, poplar, coconut). It grows well both indoors and outdoors, and the optimum temperature range is 18–27°C.  Maitake is a polypore mushroom that grows in clusters at the base of trees, particularly oaks. The fungus is native to China, the north-eastern part of Japan and North America, and is prized in traditional Chinese and Japanese herbology as a medicinal mushroom. It is widely eaten in Japan, and its popularity in Western cuisine is growing. Like all polypores, the fungus becomes inedible when older because it becomes too tough to eat. In the case of cultivation, maturation works best if the environment is held at a constant 13-16°C. Substantial fluctuation beyond this temperature range arrests fruit body development.  Shitake is the second most commonly used mushroom in the medicinal industry. Native to East Asia, shiitake grow on live hardwood substrate: logs or sawdust. Shiitake mushrooms prefer species such as oaks, hornbeam, and hard maples but will produce on several other wood species. Hardwood logs about 8 to 15 centimetres in diameter and 76 to 122 centimetres in length are inoculated with the fungus in a stage of its life cycle called mycelium. The spawn is placed 1 to 3 centimetres deep into the logs. Each log can grow mushrooms for up to three years, depending on log diameter, hardness of the wood, contamination, and growing environment. The logs must be maintained in an environment above 40% moisture and kept fully shaded in the summer. Under natural conditions, shiitake mushrooms fruit in the spring and fall when temperatures are cool.  Chaga is a medicinal fungus that grows on birches in the Northern Hemisphere. It is generally found in very cold habitats. While it grows wild in the birch forests of Russia, Korea, Eastern and Northern Europe, and in northern North America, it can also be cultivated. In the US, it is most commonly found on paper and yellow birch trees. It can also be found on cherry birch and heart-leaved paper birch. Cherry birch is found more in the south of the US and occurs at lower elevations. Heart-leaved paper birch is found in the north at high elevations. Chaga is a parasite of the birch tree, so when the tree dies, so does the mushroom. Chaga must always be harvested from living trees. It can tolerate temperatures down to –40°C.

10.2.4. Global production

The global production of edible mushrooms (including medicinal) and truffles was 10.7 million tonnes in 2016 (see Table 58). Truffles and mushrooms are generally reported together.

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Table 57: Global harvest area and production of edible mushrooms, 2014–16 Year 2014 2015 2016 Area Harvested (hectares) 27,781 28,613 27,492 Production (tonnes) 10,408,485 10,911,329 10,790,859 Source: FAO

In 2016, the top countries cultivating mushroom were China, Italy, the US, the Netherlands and Poland. China accounts for more than 72% of all mushroom cultivated today. In China, much of the mushroom cultivation has traditionally occurred in the south, but over time production has been moving to north-eastern China, where woods and land are more abundant, and central China, where the agricultural residues are more available. Mushroom cultivation does not require significant capital investment but it is labour intensive.

While the latest data on production by variety is not available, Table 59 shows production volumes of the top six cultivated varieties in China from 2007 to 2011.

Table 58: Top six cultivated varieties of mushroom in China, 2007–11 (’000 tons)

Source: Edible Mushroom Cultivation for Food Security and Rural Development in China: Bio- Innovation, Technological Dissemination and Marketing, Yaoqi Zhang, Wei Geng, Yueqin Shen, Yanling Wang and Yu-Cheng Dai, 2014.

10.2.5. Current Australian landscape

The mushroom industry in Australia mostly cultivates the Agaricus variety. In 2016, the overall production was 50,000 tonnes, a large drop from 60,000 in 2014 (FAO). Reports claim that many mushroom farms have closed due to a fluctuating market and rising input costs.

The Australian Mushroom Growers Association (AMGA), established in 1961, oversees the industry and its interests.

Table 59: Australian harvest area and production of mushrooms, 2014–16 Year 2014 2015 2016 Area Harvested (hectares) 216 153 144 Production (tonnes) 60,023 42,777 50,387 Source: FAO

Figure 89 shows the distribution of mushroom production across the Australian states and the industry’s value in 2014/15.

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Figure 87: Australian mushroom industry size and production distribution by state, and supply chain and value, 2014/15 Source: AMGA

10.2.6. Retail market prices

Prices vary, depending on such variables as the type of mushroom and its end market use. At present, in China there is a growing demand for matsutake, also known as the pine mushroom, which is among the costliest mushrooms today. Matsutake is prized for its aroma and flavour in the culinary industry, but is also used as a medicinal mushroom due to its anti- cancer properties. Because of the low yield and high demand, the retail price of matsutake in Yunnan peaked at 3,000 yuan (A$596) per kilogram in 2017.

In the US in 2016/17, Agaricus retailed for an average of US$2.75/kg, shiitake for $8.50/kg, oyster for $6.80/kg and other specialty mushrooms for $11.70/kg.

10.2.7. Illicit trade or other issues

The medicinal mushroom category has been growing significantly over the past few years and this has led to a trade in not just the mushroom, but also its spores and mycelium, which are not as healthy as the mushroom itself. Various scientific studies on mushroom show that, on average, the whole mushrooms and mushroom extracts are high in beta-glucans (25– 60%) and low in alpha-glucan (generally less than 5%), while supplementary products made from mycelium on grain showed the opposite – they are low in beta-glucans (0–12%) and high in alpha-glucans (30–70%).

10.2.8. Demand

Medicinal mushrooms are not covered separately in import/export databases, primarily because research is ongoing for many categories. Even the common Agaricus mushroom is now believed to be helpful in cancer management, along with aiding in liver and diabetes issues. Along with the US, Europe is a big market for mushrooms today.

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On average, annual per capita consumption of mushrooms is about 5 kg. This is expected to continue to increase as consumers become more aware of the healthy benefits of incorporating mushrooms in their diet.44

Import market

Figure 90 and Table 61 show the top importers of the Agaricus mushroom in 2016, and Figure 91 and Table 62 show the top importers of edible mushrooms and truffles, excluding Agaricus, in 2016 (medicinal/edible mushrooms are not reported separately in any database).

Figure 88: Top importers of the Aqaricus mushroom by value, 2016 (US$000) Source: Trademap.org

44 Current Overview of Mushroom Production in the World, Cunha Zied Diego and Arturo Pardo-Giménez; Daniel J. Royse, Johan Baars and Qi Tan.

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Table 60: Top 10 importers of Agaricus mushroom by value and volume, 2016 Country Value Imported Quantity Imported (US$000) (tonnes) World 1,040,697 479,580 United Kingdom 236,849 101,031 US 168,473 46,272 Germany 142,286 68,846 Netherlands 66,630 25,714 Belarus 54,902 38,710 France 51,427 24,732 Belgium 31,133 15,962 Sweden 28,237 11,777 Russian Federation 19,955 28,444 Austria 19,787 9,482 Source: Trademap.org.

Figure 89: Top importers of edible mushrooms and truffles (excluding Agaricus) by value, 2016 (US$000) Source: Trademap.org.

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Table 61: Top 10 importers of mushrooms and truffles other than Agaricus by value and volume, 2016 Country Value Imported Quantity Imported (US$000) (tonnes) World 725,028 – Germany 100,418 23,872 France 71,770 19,145 Japan 60,912 3,213 United Kingdom 52,862 21,613 Italy 45,500 7,313 US 38,793 9,852 Thailand 32,498 20,507 Lithuania 26,969 5,978 Austria 23,350 4,430 Korea, Republic of 23,155 6,861 Source: Trademap.org. Note: world volume not yet reported. Export market Figure 92 and Table 63 show the top exporters of the Agaricus mushroom in 2016, and Figure 93 and Table 64 show the top exporters of edible mushrooms and truffles, excluding Agaricus, in 2016 (medicinal/edible mushrooms are not reported separately in any database.)

Figure 90: Top exporters of Agaricus mushrooms by value, 2016 (US$000) Source: Trademap.org

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Table 62: Top 10 exporters of Agaricus mushroom by value and volume, 2016 Country Value Exported Quantity Exported (US$000) (tonnes) World 974,752 468,347 Poland 303,078 195,215 Netherlands 190,657 72,742 Canada 146,436 36,544 Ireland 100,858 30,865 Belgium 37,022 18,621 Lithuania 25,612 23,011 Belarus 20,433 28,472 Germany 18,668 9,384 Hungary 17,306 8,714 US 15,654 4,168 Source: Trademap.org

Figure 91: Top exporters of edible mushrooms and truffles (excluding Agaricus) by value, 2016 (US$000) Source: Trademap.org

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Table 63: Top 10 exporters of edible mushrooms and truffles (excluding Agaricus) by value and volume, 2016 Country Value Exported (US$000) Quantity Exported (tonnes) World 685,589 170,847 China 147,769 53,990 Italy 66,324 3,418 Netherlands 65,878 19,203 Korea, Republic of 38,721 15,317 Poland 36,258 14,704 Lithuania 32,763 5,949 Russian Federation 31,383 7,310 Romania 28,623 3,077 Belgium 22,782 7,186 France 22,734 1,621 Source: Trademap.org

According to the Yunnan Fungus Association, mushroom consumption in China and neighbouring countries including Japan and South Korea has been growing by about 10% annually over the past few years. The global mushroom market is expected to grow by 9– 10% over the next five years.

10.2.9. Consumer perception

Mushrooms have been consumed for centuries; however, they are currently trending as a superfood due to studies claiming that mushrooms can help combat cancer. Chaga has been consumed for centuries in the East, most typically as tea, where its health benefits are well established. More recently, chaga has been gaining popularity in the West, where its numerous health benefits are being recognised. Mushrooms are being included in products in the food industry, as well as the nutraceutical and dietary supplement industry. Four Sigmatic offers coffee with chaga, lion’s mane or cordyceps mushrooms. Between 2015 and 2016, the natural/health retail channel saw significant growth in sales of these mushrooms specifically used in Four Sigmatic’s range. Reishi grew by 89%, chaga 46% and cordyceps 21%, suggesting increased penetration of mushrooms.

10.2.10. Retail market value

The export value depends on the type of mushroom. For example, the export value of one tonne of Agaricus is about US$2,000–2,500 compared with specialty varieties like shiitake and others at about US$5,000–7,000.

10.2.11. Legislative and regulatory environment

The regulations for growing, processing and trading mushrooms differ by country. In the US, pesticide use in the mushroom industry is regulated by the US Environmental Protection Agency under the federal statutes of the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA) and the Federal Food, Drug, and Cosmetic Act. All foods, including mushrooms, sold in the US must be safe. Additives must be approved. Harmful contaminants, such as pesticide residues or excessive levels of mycotoxins or preservatives, are banned. It should also be readily obvious from the labelling if a food contains allergens.

The medicinal industry does not have separate regulations in most cases, generally going by those that govern the dried mushroom trade in most countries.

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The basic quality requirements include:

 Absence of insect damage  Absence of foreign bodies  Moisture content (max. 12% for dried mushrooms, 13% for dried shiitake mushrooms and 6% for freeze-dried mushrooms)  Sizing (different for every type of dried mushroom)  Styles (whole, whole caps without stems or cut into different shapes)  Quality class (defined by uniformity and tolerances).

Despite the strong demand for medicinal mushrooms like chaga, regulations ensure the market still has a long way to go. For instance, chaga mushroom is considered a novel food in the EU and can only be used in food supplements, as powder and/or extract. The biggest issue facing the market is wild mushrooms (non-cultivated), as these can be mixed with toxic types of mushrooms. Therefore, every shipment of wild mushrooms undergoes testing in many countries.

Environmental protection, organic and fair-trade certification schemes are becoming more and more popular in Western countries. To be labelled as organic, products must fulfil local organic farming requirements.

10.2.12. Trading channels

Figure 94 is an example of a trading channel in the mushroom industry. In many countries, the mushroom industry has a trade association that, among other things, oversees the domestic mushroom industry and handles the trade relationships. For example, the American Mushroom Institute (AMI) is a national voluntary trade association representing the growers, processors and marketers of cultivated mushrooms in the US and industry suppliers worldwide.

Figure 92: Example of mushroom trading channel

10.3. Opportunities and threats

10.3.1. Opportunities

Companies including Sayan Health, Four Sigmatic and Nordic have recently brought back the tradition of consuming mushrooms as hot drinks by developing coffees and teas

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containing mushrooms and stressing their health benefits to consumers. The health and wellness hot drinks market was valued at US$41.0 billion globally in 2015, and the mushroom products in this sector have great potential.

Medicinal mushroom products have various health benefits that have resulted in their increased presence in the nutraceutical, as well as pharmaceutical, industry over the last few years. Different medicinal mushrooms contain different attributes to protect against and help with various health conditions.

The health and wellness trend is also driving the demand for medicinal mushrooms in the form of functional foods. Medicinal mushrooms fit the vegan, gluten-free and natural food categories. Several types of mushrooms are considered a superfood, specifically due to anti- cancer effects. The top two types marketed in the ‘superfood’ category are organic shiitake and reishi. These varieties, as well as lion’s mane and chaga, are most common in traditional Chinese medicines.

Further, ongoing research and development is boosting the growth of the market as more and more mushrooms – and their medicinal properties – are discovered.

10.3.2. Threats

As yet, commercial mushroom production is only possible for some species. Further, the entire process is labour intensive. Some countries including the US have reduced their production of some varieties over the years as it’s cheaper to import the product from China. The US experienced a drop of 10% in growers in 2016/17. The Australian mushroom industry would face a similar dilemma in terms of operating costs involved.

There are many unsolved, serious problems facing medicinal mushroom development. For example, there is now evidence that most species reported as lingzhi or reishi (Ga. lucidum) in most pharmacological studies were mistakenly identified. Ga. lucidum in China is quite different from the Ga. lucidum found and described in Europe. Standardisation around the world of dietary supplements using medicinal mushrooms is still in its early stages, and there is insufficient understanding of the bioactive effects of supplements. There are no internationally recognised standards and protocols for the production and testing of products. Only proper standards and protocols can guarantee product quality. Without consistency in the quality of medicinal mushroom products, commercially available preparations of mushrooms will be dramatically different and vary enormously in composition and effect.

However, the biggest threat lies in the fact that despite extensive research on some types of mushrooms, many others are under-researched. A few studies suggest that any side effects of mushroom extracts are not serious (Klupp et al. 2015), but cases of food allergy, cheilitis (inflammation of the lips), flagellate erythema, and liver damage have been reported in the literature (Yuen et al. 2004; Mukai et al. 2006; Suehiro et al. 2007; Wanmuang et al. 2007; Goikoetxea, Fernández-Benítez, Sanz 2009; Girard & Bessis 2010).

10.4. Conclusions and recommendations

Several types of mushrooms are considered a superfood specifically due to benefits involving anti-cancer effects. The top two types of mushrooms marketed in this category are generally shiitake and reishi; however, chaga is increasingly promoted in this space. Over the past few years, there has been a change in the perception of health. Consumers are increasingly looking for natural products over synthetic ones and this has led to a strong market for natural/herbal nutraceutical products. The global dietary supplements market is primarily driven by increased consumer awareness about preventative healthcare. The ageing population is also a factor in this trend.

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In 2015, German consumers spent €1.15 billion retail on self-medication. In Western Europe the top herbal medicine markets are in the UK, Germany and France, while in Eastern Europe they are in Poland, Bulgaria, Romania and the Czech Republic. Even in China, the traditional Chinese medicine market has continued to grow steadily (see Figure 95).

Figure 93: Growth of the pharmaceutical industry in China, 2011–15, 2016–20 (yuan bn) Source: GF Securities Note: TCM = traditional Chinese medicine; CAGR = compound annual growth rate The type of mushroom cultivated goes a long way to ensuring profits. Agaricus, despite some health benefits, has been down in the global market. It is widely cultivated and harvested from the wild across the world and is not prominent as a medicinal mushroom. However, the popularity of chaga, reishi, shiitake and other specialty mushrooms has been growing. Between 2015 and 2016, the natural/health retail channel saw significant growth in sales of these varieties: reishi by 89%, chaga by 46% and cordyceps by 21%. If Australia decides to invest in mushrooms, it should concentrate on these varieties. Given that Starbucks recently introduced turmeric into its lattes, it would not be surprising if more mainstream retailers added mushroom to their beverage ingredient list.

Euromonitor forecasts for the health and wellness sector predict that this market will grow at an average of 13.6% a year from 2017–22 (see Table 65).

Table 64: Euromonitor health and wellness forecasts Year 2015 2016 2017 2018 2019 2020 2021 2022 Value 655,498.4 680,401.8 712,921.7 731,051.9 750,611.8 771,019.7 786,691.0 809,731.0 (US$m) Source: Euromonitor

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Appendix

11.1 INITIAL LONG LIST

The initial list of new and emerging products identified by Euromonitor International is listed below, minus the 10 industry opportunities detailed in the main body. Each product is accompanied by a summary of its benefits, growth potential, demand, and production/supply areas.

11.1.1 BAMBOO

Bamboo is an evergreen perennial flowering plants in the subfamily Bambusoideae of the grass family Poaceae. Most bamboo species are native to moist tropical and warm temperate climates. However, many species are found in diverse climates, ranging from hot tropical regions to cool mountainous regions and highland cloud forests.

Bamboo is the fastest-growing plant in the world, which represents an opportunity as a sustainable building material. Bamboo also converts about 35% more CO2 into oxygen than a regular tree. Widely used in a number of industries, the use of bamboo continues to rise. The global economy valued at US$60 billion per year, according to the International Network of Bamboo and Rattan, an intergovernmental organisation promoting bamboo and rattan. Bamboo can be used to reverse land degradation, slow deforestation, combat climate change through carbon sequestration, and boost rural livelihoods through the creation of jobs and income.

In Asia, bamboo grows in China, Japan, Korea, and India. It is also grown in smaller volume in sub-Saharan Africa, confined to tropical areas, from southern Senegal in the north to southern Mozambique and Madagascar in the south. In the Americas, bamboo grows in southern Argentina and the beech forests of central Chile, through the South American tropical rainforests, to the Andes in Ecuador. Bamboo is also native through Central America and Mexico, northward into the south-eastern US. It is a plant which does not require any fertilisers or pesticides, as it is largely immune to disease and pests.

Asia is the largest bamboo-producing region. The top bamboo producer in the world is China, followed by India. In Africa, Ethiopia is by far the leader in bamboo production. Two-thirds of the bamboo in Africa comes from Ethiopia, where the market has grown from making toothpicks to flooring and curtains. Demand exists from nearly all the industries.

Europe and North America are big markets for imported bamboo products. Japan is also a major market for bamboo products imported from China. Other significant importers of bamboo-based products include Canada, Australia, Singapore and Russia. In terms of raw materials, Europe is the largest importer of bamboo from China followed by the US and Japan. Some of the new products seeing higher demand for bamboo are bamboo-based styluses (tablets and laptops), bamboo bikes (Asia and Africa), and bamboo-based watches. Bamboo panels and flooring are seeing soaring demand all over the world, because they have the texture of marble and the elegance of wood; in addition, they are strong, durable, smooth, clean, non-sliding and resistant to humidity.

11.1.2 BERRIES (BLACKCURRANT, GOJI BERRY, GOLDEN BERRY)

The blackcurrant (Ribes nigrum) is a woody shrub in the Grossulariaceae family that is grown for its intensely flavourful berries. It is native to parts of central and northern Europe and northern Asia where it prefers damp fertile soils, and is widely cultivated both commercially

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and domestically. While highly popular in Europe, blackcurrant is gaining popularity in other regions, notably North America as a nutraceutical supplement and as a flavour.

In addition to vitamin C, blackcurrants are rich in antioxidants and anthocyanins. These can help strengthen the immune system, soothe sore throats, and ease flu symptoms. Blackcurrant leaves also have a range of properties, including being antimicrobial.

Currently, Europe supplies almost all the blackcurrant in the world and is extremely popular in this region. While it was grown in the US in the past, it spread a fungus that killed its pine cultivation and hence all blackcurrant cultivation was stopped. New Zealand blackcurrants also have a lot of market value despite their lower production yield.

Goji, goji berry, or wolfberry is the fruit of either the Lycium barbarum or Lycium chinense, two closely related species of boxthorn.

Asia is the largest supplier for goji berries and the market is dominated by China in terms of production and export. Canada and the US are other significant producers. While the Golden Berry is native to Peru and Chile, it is now grown in many parts of the world including the UK, South Africa, China, Australia, New Zealand, India, Thailand and many more.

Physalis peruviana, a plant species of the genus Physalis, is originally from Peru. The plant and its fruit are most commonly known as golden berry. While native to Chile and Peru it has been cultivated in other regions since. Benefits vary by the berry.

Reported health benefits of golden berry within the wellness space include their ability to promote weight loss, detoxify the body, manage diabetes, strengthen the immune system, optimise kidney function, and reduce inflammation. They are also reported to prevent certain degenerative diseases, boost heart health, and are widely considered to be a “superfood” due to their nutrient and antioxidants content.

While berry flavours like blueberry, strawberry and even açaí berries and blackberries have been dominating new food, drinks, and snacks, research shows ones like blackcurrant and goji berry are now trending in new products to satisfy consumer desire for innovation in health food. Like the beetroot, blackcurrants are rich in nitric oxide and are touted for their ability to promote muscle recovery and fat-burning. Goji berries are called the Chinese superfood for their nutritional content, and are trending among food cuisines across the world. Similarly, golden berries are trending across the continental US at present where the product is imported from Laos and Colombia.

11.1.3 BUTTERFLY PEA

Clitoria ternatea is a plant species belonging to the Fabaceae family, also known as Asian pigeonwings, blue pea, butterfly pea, cordofan pea and Darwin pea. Used in food and beverages, extract of butterfly pea is increasingly used in tea and cocktails, as well as in the insecticide industry as a naturally derived replacement for chemicals.

The use of butterfly pea as a natural food colouring is common in some Southeast Asian countries. The strongest demand comes from Thailand. For example, nam dok anchan is a Thai drink is made from this product. In Burmese and Thai cuisines, the flowers are battered and fried. In the Malaysian state of Kelantan, the buds of the flower are sometimes added when cooking white rice to give the rice a blueish tinge.

Butterfly pea flower tea is made from the ternatea flowers and dried lemongrass, and changes colour depending on what is added to the liquid, with lemon juice turning it purple. The flowers have most recently been used in the cocktail industry. For instance, Ink Gin is a boutique gin that was created in the Northern Rivers region of NSW with butterfly pea as an

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ingredient. The gin is blue in the bottle and turns pink when mixed with a carbonated mixer, such as tonic water.

The butterfly pea is one of the few plants containing cyclotides, which are peptides that have anti-tumour properties. In traditional Ayurvedic medicine, it is said to have memory- enhancing, nootropic, anti-stress, anxiolytic, antidepressant, anticonvulsant, tranquilising, and sedative properties. In traditional Chinese medicine and Western doctrine of signatures, the plant has been ascribed properties to improve the female libido due to its similarity to female genitalia, much as foods with a phallic appearance are believed to stimulate the male libido. This plant is native to tropical equatorial Asia (Indonesia and Malaysia), but has been introduced to Africa, Australia and America.

Butterfly pea extract was approved for use by the Australian Pesticides and Veterinary Medicines Authority in December 2015 as a component in natural insecticides. Considering the natural trend these days, butterfly pea may have potential as an insecticide in the future.

11.1.4 CAMEL MILK

The dromedary, or one-humped camel (Camelus dromedarius), is found in the Middle East and the Horn of Africa, while the Bactrian, or two-humped camel (C. bactrianus), live in Central Asia. Both the dromedary and the Bactrian camels have been domesticated, and provide milk, meat, and hair for textiles/leather goods.

Camel milk is rich in vitamins, minerals, protein, and immunoglobulin; compared to cow's milk, it is lower in fat and lactose, and higher in potassium, iron, and vitamin C. Camel milk can be made into a drinkable yoghurt, as well as butter or cheese, although its yield in cheese tend to be low. While the camels themselves are low maintenance in terms of feed, they are expensive to purchase initially. Hence camel milk is more expensive than cow's milk; and is also lower yield than cow’s milk.

Global production and consumption of camel milk is dominated by countries in North and East Africa, the Middle East and parts of Asia. Somalia, Kenya and Mali top the list for camel milk production. While most of these places produce and consume camel milk locally, there is a demand for the product in countries such as the US where camel herds are minimal.

Camel milk is also becoming more popular in drought-afflicted regions. Extreme weather conditions in African countries have driven up interest in camel milk as a drought-safe option as camels are easier to maintain in this climate than cows. Resultantly, more camel milk products are appearing on the market, such as “camelcinos” found in Nairobi’s cafes, alongside cappuccinos. Camel milk can also be used in the production of cosmetic and skin care products such as soap, creams, and lip balms.

Commercial camel dairies are few at present but exist in Dubai and Australia. In Australia, the number and size of camel dairies is on the rise despite ongoing debate about the health benefits of camel milk, according to the Australian Wild Camel Association.

Camel meat is still eaten in certain regions, including Eritrea, Somalia, Djibouti, Saudi Arabia, Egypt, Syria, Libya, Sudan, Ethiopia, Kazakhstan, and other arid regions where alternative forms of protein may be limited, or where camel meat has had a long cultural history. While significant change is not expected in the camel meat industry, the milk industry is set to grow.

11.1.5 CHIA SEEDS

Salvia hispanica, commonly known as chia, is a species of flowering plant in the mint family, Lamiaceae, native to central and southern Mexico and Guatemala. Chia seeds are grown

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and commonly used as food in several countries of western South America, western Mexico, and the southwestern US. Like quinoa and hemp, chia seeds are popular thanks to their reputation as a superfood. Chia seeds are an excellent source of omega-3 fatty acid and fibre, and contain protein and minerals including iron, calcium, magnesium and zinc. Research indicates that including chia seeds as part of a healthy diet may help improve cardiovascular risk factors by lowering cholesterol, triglycerides and blood pressure. Chia seeds can be eaten raw or prepared in a number of dishes. The sprouts of chia are also edible and are sometimes used in salads, sandwiches, and other dishes. The growth of vegetarian/vegan diets and demand from health-conscious customers is driving market growth for chia seeds.

Chia is grown and consumed commercially in Mexico and Guatemala, as well as Bolivia, Argentina, Ecuador, Nicaragua, Australia, and the southwestern US. A popular drink in Mexico is chia fresca, which consists of chia seeds soaked in water until they swell and form a gel-like texture, with sugar and flavouring such as lemon mixed in. In the US, chia seeds are popularly used in chia pudding, where the seeds are hydrated in sweetened dairy or plant-based milk until they reach a thick, pudding-like consistency. About 80% of the global chia supply comes from Latin America. Other countries such as Australia and China are scaling up production to meet global demand.

Europe imported around 16,182 tonnes of chia seeds in 2016. This marks an average annual increase of 27% (in volume) since 2012, when imports amounted to 3,485 tonnes. Germany is the largest importer of chia seeds in Europe, with a share of 40% in 2016. Germany is followed by the Netherlands (18%), Spain (12%) and the UK (8%). Demand is high in Asia, as well. Other key markets include Japan, China, and India. These countries are experiencing high demand for superfoods.

11.1.6 COFFEE

Coffee is a beverage prepared from roasted coffee beans, which are the seeds of berries from the Coffea plant. Coffea is native to tropical Africa (originating in Ethiopia and Sudan), Madagascar, the Comoros, Mauritius, and Réunion in the Indian Ocean. Coffea was exported around the world from Africa, and coffee is now produced in over 70 countries, primarily in the equatorial regions of the Americas, South-East Asia, India and Africa.

The two most commonly grown species are the highly regarded Coffea arabica, and the less sophisticated but stronger and hardier Coffea robusta. Major trends driving demand for coffee include strong consumption among millennials, a rise in cafés and coffee shops, and trendy coffee drinks such as cold-brew, nitro-brew and gourmet blends. Research findings have been contradictory as to whether coffee has any health benefits or harmful effects. Yet, unlike many of the products included in this report, coffee has been researched extensively. Long-term studies of both risks and potential benefits of coffee consumption by elderly people, including effects on the symptoms of Alzheimer's disease and other types of cognitive impairment, do not show conclusive results but do indicate the possibility of positive effects. Coffee is no longer considered a risk for coronary heart disease.

The top 10 suppliers of coffee beans are Brazil, Vietnam, Colombia, Indonesia, Ethiopia, Honduras, India, Uganda, Mexico and Guatemala. Yet coffee stockpiles have been dwindling due to increased global consumption.

With a café on nearly every corner in countless cities around the world, it comes as no surprise that coffee is the world’s second most traded commodity (after oil), with about half a trillion cups drunk per year (ICO). Prices are rising, due to a variety of factors including tight supply, lower yields, detrimental weather, and extremely strong demand, especially from the

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US, China, and India. In the US, demand is mostly led by millennials (44% of demand). The ICO predicts a global shortage of coffee beans.

11.1.7 DUBOISIA

Duboisia, commonly called the corkwood tree, is a genus of small perennial shrubs and trees with extremely light wood and a thick, cork-like bark. There are four species. The fruit is a small, globular, black juicy berry. Duboisia’s key use is in the pharmaceutical/nutraceutical industry, due to its high alkaloid content. The leaves contain a number of alkaloids including hyoscine (scopolamine), which is used for treating motion sickness, stomach disorders, and the side effects of cancer therapy. They are also antispasmodic, and produce a narcotic effect due to the presence of nicotine alkaloids. They also suppress hunger.

Duboisia grows only in Australia and New Caledonia, and is grown commercially for the pharmaceutical industry. Potential for higher demand exists due to its natural use in the drug/pharmaceutical industries, but at present it is not widely used as a drug component. One of the most common drugs it is used in is Buscopan, which is available in Australia among other countries.

11.1.8 DUCK

Duck is the name used for many species of waterfowl in the large number of species in the Anatidae family, which also includes swans and geese. Ducks are mostly aquatic birds, smaller than swans and geese, and live in freshwater and salt water environments. Ducks are used for meat, eggs and feathers. Duck meat is a good source of protein, niacin, phosphorus, riboflavin, iron, zinc, vitamin B-6 and thiamine, and smaller amounts of vitamin B-12, folate and magnesium.

Ducks are commonly found in many countries. The mallard is said to be the most abundant and wide-ranging duck in the world. Mallards can be found in almost any body of freshwater across Asia, Europe, and North America. They are also found in saltwater and brackish water and are commonly found in wetlands. Duck production is mostly for food, and China is the biggest producer and consumer of duck meat in the world. Overall 80% of all commercial production is in Asia, according to the Food and Agriculture Organisation. Other big producers in Asia are Malaysia, Myanmar, Vietnam and Taiwan. France and Hungary top the production list in the EU.

In Asian countries such as China, duck is a staple food while in Western countries it is more commonly found in fine dining or French cuisine. Export/import data shows most other countries in Asia are self-sufficient in duck production. In the EU, the main importers are Germany, France and the Czech Republic. In Australia, duck consumption is increasing slowly.

11.1.9 EUCALYPTUS OIL

Eucalyptus oil is the generic name for distilled oil from the leaf of Eucalyptus, a genus of the plant family Myrtaceae native to Australia, and is cultivated worldwide. The health benefits of eucalyptus oil are well known and wide-ranging, being anti-inflammatory, antispasmodic, decongestant, deodorant, antiseptic, antibacterial, and stimulating. Eucalyptus essential oil is colourless and has an extremely distinctive flavour and scent. It is used to treat colds, coughs, sore throat, congestion and headaches. There are around 700 varieties of Eucalyptus and all are indigenous to Australia. Eucalyptus is also grown in China, India, Spain, Portugal, Brazil and Chile. Global production is dominated by Eucalyptus globulus.

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However, Eucalyptus kochii and Eucalyptus polybractea have the highest cineole content. Currently, most of the exports are from China.

Despite the presence of over 700 varieties, less than 20 varieties produce enough oil for commercial purposes. The rest are used for their wood which can be used in construction for homes and furniture. Eucalyptus oil is in demand in the pharmaceutical/traditional medicines industry, followed by others including flavours, fragrances, household chemicals and cleansers, repellents and many more. Some of the top importing countries include the US, Canada, and Asian nations (Thailand, Japan, and Hong Kong). Most of the demand is met by China at present. While potential exists, demand and supply have been mostly stable.

11.1.10 FUCOIDAN

Fucoidan is a sulfated polysaccharide contained in brown algae and brown seaweed such as mozuku, wakame, hijiki, kombu, and bladderwrack. Other forms of fucoidan have also been found in animal species, including the sea cucumber.

Fucoidan is used in some dietary supplements as a powerful support to the immune system. It enhances normal cell growth and division, and studies show that fucoidan supports normal liver and circulatory function. It lowers cholesterol and is said to have anti-cancer properties.

Supply and effectiveness depends on the seaweed or algae in question. The highest quality comes from the brown algae mozuku (Cladosiphon okamuranus) and wakame-Mekabu (Undaria pinnatifida). Bladderwrack, is a seaweed found on the coasts of the North Sea, the western Baltic Sea, and the Atlantic and Pacific Oceans, while Cladosiphon okamuranus/Mozuku is a type of edible seaweed in the genus Cladosiphon, naturally found in Okinawa, Japan. Wakame (Undaria pinnatifida), is a sea vegetable, or edible seaweed that grows in Japan, the US and New Zealand.

Demand exists in some markets, such as the US and China. Fucoidan derived from Undaria pinnatifida/wakame is used as a food ingredient in various food products (baked goods, soups, snack foods, imitation dairy products, seasonings and flavours), and was granted Generally Recognised as Safe (GRAS) status by the FDA in early 2015.

11.1.11 GOAT

The domestic goat (Capra aegagrus hircus) is a subspecies of goat domesticated from the wild goat of southwest Asia and Eastern Europe. The goat is a member of the Bovidae family and is closely related to sheep as both are in the goat-antelope subfamily Caprinae. There are over 300 distinct breeds of goat. Goats are one of the oldest domesticated species, and have been used for their milk, meat, hair, and skin in many countries around the world.

Goat milk has more calcium, magnesium, potassium and vitamin C than cow’s milk, and is lower in fat and cholesterol. It is also naturally homogenised, which makes it easier to digest. It takes about 20 minutes to digest goat milk, whereas it takes two to four hours to digest cow’s milk. Goat milk is also easier on people who have allergies. Powdered goat milk is particularly popular for use in infant formula.

Goat cheese, also known as chevre, is widely eaten on its own, or incorporated into cooking and salads. Goat meat is a good source of protein, and compared to beef, has similar protein, lower fat, higher calcium, magnesium, potassium, similar iron and lower B12 and folate content. Dairy goat milk and goat cheese continue to see slow, steady growth trends as consumers are becoming more aware of its high protein and low dietary cholesterol.

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It is less expensive to raise goats than cows, as a farmer can have one cow per acre or 10 goats. The main global producers of goat milk are India, Bangladesh, Pakistan and Sudan. Asia has the larger contribution in total meat production, with the market led by China. The larger producers of goat skins are China, India, Jordan and Pakistan. Among the Asian countries, the largest goat population exists in China, India, Pakistan, and Bangladesh. These countries are the highest consumers of goat products.

The biggest exporters of goat meat are Australia and New Zealand. Australia is a small producer, and most of its product is exported. 90% of goat meat imported by the US is from Australia.

In addition to goat meat, there is also a market for live goats, especially in Middle Eastern countries as live goats are sacrificed and butchered during their major festivals. Somalia exports millions of sheep and goats to the Gulf countries and especially to Saudi Arabia, Yemen, Kuwait, the UAE, Oman and Qatar every year.

In regards to goat hair, South Africa is the largest global producer of mohair (around 80%) followed by the US.

11.1.12 GUAR

The guar or cluster bean (Cyamopsis tetragonoloba) is an annual legume and is used to make guar gum. Guar is sown after the first rains in June or July and is harvested after 3-4 months. It is a hardy, drought-resistant crop that requires moderate rainfall at regular intervals. While guar is a staple food in some countries such as India, growth in demand is mostly from oil and gas industries around the world, which use it in the hydraulic fracturing (fracking) process. In that process, derivatives of guar gum thicken the slurry of water, sand and chemicals pumped into wells, helping to increase viscosity, reduce fluid loss and decrease fluid friction. For human consumption, guar grain is a vegetable and guar gum is used in the food ingredient industry as a thickener for ice cream, a binder for meat, and a stabiliser for cheese, instant pudding, whipped cream substitutes and salad dressings.

Guar is grown mostly in India and Pakistan. Smaller volumes are grown in the semi-arid areas of Africa, Australia and Texas, US. US import data shows that national demand was quite high in 2012, but has since fallen significantly, which is attributed to growth from local production in Texas. Import/export data from supplying countries shows that the highest demand comes from the US and China, primarily due to guar’s use in fracking. However, data from the Australian Guar Company shows a significant rise in Australia's imports of guar, and even higher demand is forecast.

11.1.13 GUAYULE

Guayule (Parthenium argentatum) is a flowering shrub in the aster family, Asteraceae. It is native to the southwestern US and northern Mexico. Guayule grows well in arid and semi- arid areas of the southwestern US (New Mexico, Texas and Arizona), North Central Mexico, and regions with similar climates around the world.

Guayule is used as an alternate source of latex, as it is hypoallergenic, unlike standard rubber from the Hevea tree. Guayule is an industrial, perennial crop used to make natural rubber, resins, and biomass. It has no value as a food product, and guayule rubber is mostly used in medical products and personal care items. The main market potential for guayule is automobile tires and auto parts.

One downside is that the average guayule plant yields a relatively small amount of rubber. Several researches and field studies are still underway in the US as well as in the

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Bridgestone America facility. The main opportunity for guayule-based natural rubber is in part to replace imported Southeast Asian Hevea rubber with more locally grown rubber. This would allow US tire and other rubber-centred companies to become more sustainable. Major investments by commercial companies are backing the commercial launch of guayule production in the low deserts of the West and Southwest over the next several years.

11.1.14 HAZELNUTS

The hazelnut includes any of the nuts deriving from the genus Corylus, especially the species Corylus avellana. A perennial crop well known in food and confectionery for a long time, hazelnuts are high in vitamin E and B vitamins, including folate. Vitamin E is important in maintaining healthy skin, hair and nails. B vitamins are important in proper cell and energy metabolism. Hazelnuts are also a rich source of protein, potassium, calcium and magnesium. Aside from being a great source of fibre, they are rich in monounsaturated fatty acids, which help to reduce LDL cholesterol and increase HDL cholesterol. While hazelnuts grow in a number of countries, the main producers are Turkey, Italy, the US, Georgia, Azerbaijan and China. Over 65% of all production is from Turkey.

Much hazelnut consumption is via the confectionery and spreads industries, with Italian manufacturer Ferrero SpA using hazelnuts in its Ferrero Rocher and Nutella products. Rising consumption of chocolate truffles and confectionery/spreads products, such as Nutella and Ferrero Rocher, seen in developing nations across the globe will continue to directly impact the hazelnut market. Global demand is also driven by health-conscious consumers. Hazelnuts are eaten raw/roasted and as an ingredient in baked goods, confectionery, snack bars, and oils from hazelnuts are used both for cooking, as well as in salads.

11.1.15 HEMP

Normally grown in the Northern Hemisphere, hemp is a species of Cannabis sativa produced for its derivative products. Hemp is used in a variety of products including paper, biodegradable plastics and composite materials. Hemp is also widely used in food (both human and animal). Hemp and cannabis belong to the same species, but their composition varies significantly, and industrial hemp does not contain sufficient tetrahydrocannabinol (THC) to produce psychoactive effects.

Hemp seeds are rich in omega-3 fatty acids and high in protein, and have a pleasant, nutty flavour and texture without the allergenic qualities of nuts. Growth in hemp use is related to the rise of vegetarian and vegan diets, where people consume non-dairy milk substitutes such as hemp milk. In Australia, the Food Standards Code was changed to permit the sale of low-THC hemp seed foods on 12 November 2017. The Australian food industry is producing a variety of hemp food products, which are generally promoted as a superfood, from hemp seed oil to hemp beer. Hemp milk is low in saturated fat and high in calcium, and is higher in protein than the primary non-dairy beverage, almond milk. Hemp seeds are said to promote weight loss, provide digestive-regulating fibre, and contribute to healthy hair, skin and nails.

Hemp is grown mostly in the Northern Hemisphere, primarily in Canada, the US, France and the United Kingdom (UK). In the Southern Hemisphere, hemp is produced in Australia, primarily in Queensland and New South Wales. Other countries that grow hemp include China, India, Chile and South Africa.

The US, Australia, Canada and India had banned production of hemp because marijuana is produced from the psychoactive form of the plant. However, China never banned production of hemp. Strong growth in hemp use is anticipated, especially in Australia. The US hemp market is valued at $150 million, according to Hemp Foods Australia. European and Asian

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markets have been developing, and hemp sales are also rising in South Korea, driven in part by the broadcasting of hemp infomercials.

11.1.16 JACKFRUIT

The jackfruit (Artocarpus heterophyllus), also known as the jack tree, is a species of tree in the fig, mulberry, and breadfruit family (Moraceae), which is native to South India. The jackfruit tree is well suited to tropical lowlands, and is the largest tree-borne fruit. A mature jackfruit tree can produce about 100 to 200 fruits per year.

Jackfruit contains vitamins, minerals, phytonutrients, carbohydrates, electrolytes, fibre and protein. It has no cholesterol or saturated fat. It contains antioxidants, phytonutrients and flavonoids that can protect from cancer. While the jackfruit is native to South India, it can grow well in tropical regions across the world. The top producers are India, Bangladesh, Thailand, and Indonesia. It is also grown in Australia, the Southern US, and South American regions like Brazil. In many places like the US and Australia, jackfruit production is only sufficient for domestic consumption.

While jackfruit has long been popular in South Asian cuisines, it is slowly being incorporated as a meat alternative in the cuisine of many other countries. The long strands of under-ripe, cooked jackfruit (as compared to the fully ripe, sweet version of jackfruit which is eaten like other fruits) taste similar to stewed or pulled pork shoulder. The texture of jackfruit in vegan ‘meat’ dishes is well received by consumers, and most supermarkets now sell packaged jackfruit products for making tacos, burritos and other recipes that could incorporate pulled pork. However, jackfruit is not just for vegans. In South Asia, jackfruit (ripe and unripe) is used to make chips, curries, pickles, custard, cake and even ice cream.

The trend of omnivores eating more plant-based meals (commonly referred to as ‘flexitarian’) is a major driver of meat substitutes such as jackfruit. According to the Nutrition Business Journal, 25% of US consumers decreased their meat intake from 2014 to 2015, and sales of meat alternatives increased from US$69 million in 2011 to US$109 million in 2015. Tofu is still the top meat alternative in the US, but the country is a growing market for other products, particularly among consumers seeking to limit their consumption of soy products due to the reported link between soy phytoestrogens and increased risk of breast cancer. Therefore, US imports of jackfruit are rising.

11.1.17 KAKADU PLUM

Terminalia ferdinandiana is a flowering plant in the family Combretaceae, native to Australia, and is also called the gubinge, billygoat plum, kakadu plum, green plum, salty plum, murunga or mador. It contains the most Vitamin C of any plant (20 times that of than an orange), and is rich in antioxidants and phytochemicals. It is also a natural laxative. It has been used for hundreds of years as both a food source and medicine by Aboriginal and Torres Strait Islander peoples. It is also used in the beauty industry for its benefits for hair, skin, and nails.

The kakadu plum is found naturally across Northern Australia (the Kimberley region of Western Australia, the Northern Territory and Queensland). Production in this region is usually about 20 tonnes per year. Demand exists in the beauty/cosmetics, food and natural health industries, but the supply is unreliable and the fact that it is grown in just one region is hampering its growth. Most of the fruit is collected by Indigenous communities harvesting from the wild. The costs for growing this plant are considerably lower than other products such as wasabi. China has shown interest in purchasing hundreds of tonnes of kakadu plums and so has Pepsi (source: Australian Native Foods Industry), but supply is only measured in tens of tonnes, not hundreds.

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11.1.18 LEMON MYRTLE

Backhousia citriodora, commonly known as lemon myrtle, lemon-scented myrtle or lemon- scented ironwood, is a flowering plant in the Myrtaceae family. It is also known as sweet verbena tree, sweet verbena myrtle, lemon-scented verbena and lemon-scented backhousia. It is found in subtropical rainforests in central and south-eastern regions of Queensland, Australia. It can be harvested throughout the year but the plant is highly afflicted currently by the myrtle rust disease. Lemon myrtle is high in antioxidants, vitamin E, calcium, zinc and magnesium. It also has antimicrobial and antifungal properties and is believed to alleviate cramps and indigestion and improve gastrointestinal health. Oil derived from this plant is a popular ingredient in healthcare and cleaning products, especially soaps, lotions, skin whitening preparations and shampoos. The main supplier country is Australia, but it also grows in other countries such as New Zealand and Malaysia. Almost 90% of lemon myrtle produced in Australia is exported in dried form, mostly to the EU and the US, where it is used as a specialty tea.

Lemon myrtle plantations are more prone to myrtle rust than other trees such as ti-tree and eucalyptus along the Australian coast. It is a niche product. Demand exists in Europe and the US, but lemon myrtle can easily be substituted with cheaper essential oils from lemongrass and tropical verbena. Rediscovered in the 1990s as an ingredient in Australian cuisine, it gained more popularity during the Olympic Games in Sydney in 2000. Despite rising consumer awareness, it is likely to remain a niche product and never achieve the strong growth of crops such as quinoa.

11.1.19 LONGAN

Dimocarpus longan is a tropical tree that produces edible fruit, typically known as longan. It is one of the most commonly known tropical members of the soapberry family (Sapindaceae), which also includes the lychee. Longan is eaten fresh, and also fresh or dried in Asian soups, snacks, desserts, and sweet and sour foods. Sometimes it is preserved and canned in syrup. In Chinese medicinal food and herbal medicine, longan is believed to provide relaxation and be effective as an antivenene for snake bikes.

Longan is grown in southern China, Taiwan, northern Thailand, Cambodia, Laos, Vietnam, India, Sri Lanka, the Philippines, Australia, the US and Mauritius. China is the primary longan-producing country in the world. Longan is relatively new in Australia and the US. The top three producers are China, Vietnam (known for its low prices for longan) and Thailand. Yield is highly unpredictable, with a large crop one year and a very small one the next. This causes prices to fluctuate significantly. Recently, consumer awareness and consumption of longan has been increasing in the US, some countries in Europe, and in the United Arab Emirates. However, most demand comes from China. Countries such as Thailand that produce longan mostly export the crop to China. The fruit is also popular in Cambodia as a religious offering.

11.1.20 LUCUMA

Pouteria lucuma is a species of tree in the family Sapotaceae, cultivated for its fruit, the lucuma. It is native to the Andean valleys and grown in Peru, Ecuador and Chile. It is high in B3 which is a difficult vitamin to find in vegetarian form, which makes lucuma particularly useful for vegetarians and vegans.

Lucuma contains beta carotene, iron, zinc, vitamin B3, calcium, and protein. It is rich in antioxidants. Its maple-like flavour makes it a suitable addition to smoothies, baked goods, and even ice cream. Recent research shows that lucuma may be helpful in supporting skin health, stable blood sugar, and even cardiovascular health. Lucuma in fruit or powdered form

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can be used as a sweetener, and has a low glycaemic index (2 g of natural sugar for every 11 g of carbohydrates). It is native to the Andean valleys and is grown in Peru, Ecuador and Chile. Attempts at growing lucuma in places such as Florida have failed.

It is currently labelled a “superfruit” so demand may rise in the future, but currently it is a niche product. Fruit and vegetable flavours continue trending in the global food industry feeding neatly into demand for natural, less processed, “better for you” and sustainable ingredients. Currently, this clean label trend is especially prevalent in the US and the EU. Lucuma is already used in some ice cream and chocolate bar products, but as consumers become more familiar with the fruit, applications are expected to expand. The flavour of lucuma complements everything from smoothies and shakes to protein-enriched ice cream and nutrition bars.

11.1.21 MACA

Lepidium meyenii, which is also known as maca or Peruvian ginseng, is native to the high Andes of Peru, where it was traditionally is used as a root vegetable and medicinal herb. Its Spanish and Quechua names include maca-maca, maino, ayak chichira, and ayak willku.

Maca root is generally dried and consumed in powdered form, but it is also available in capsules or as a liquid extract. Maca root is a good source of carbohydrates and protein, is low in fat, and high in essential vitamins and minerals such as vitamin C, copper, and iron.

The health benefits of maca root include balancing hormones and boosting female fertility, increasing energy, promoting sexual health, and improving bone density. It is said to build stamina, maintain a healthy immune system, and improve skin. Natural product companies in the US and Europe are utilising maca as it is believed to provide athletic endurance and work performance by providing burst of energy.

Lured by the promise of strong sales due to maca’s reputation as a superfood driving local demand, China began growing maca in 2013. Reports state that initial plantings were not as successful as Peru's maca but Chinese-grown maca is supplying part of local demand. Such is this demand, there was a thriving black market for illegal exports from Peru to China in 2013 and 2014.

Maca today is still mainly cultivated in Peru, in the high Andes of Bolivia, and to a small extent in Brazil. It is frost-tolerant. Maca needs to be grown at high altitude so its potential may not be high for countries such as Australia.

11.1.22 MAQUI BERRIES

Aristotelia chilensis, otherwise known as maqui or Chilean wineberry, is native to the Valdivian temperate rainforests of Chile and adjacent regions of southern Argentina, and is a species of the Elaeocarpaceae family.

Maqui berries are high in anthocyanins which boost the metabolism, stabilise blood sugar, and help lower cholesterol. Maqui berries have a higher antioxidant content than açaí or blueberries. They also reduce inflammation and lower the risk of cardiovascular diseases. Some suggest that maqui can help support weight loss efforts, help with dry eyes, improve skin health, and stimulate the immune system. It is experiencing a spike in demand from natural/health industries as the product has been named a superfood. It has not received as much media attention yet as açaí although it has potential.

Maqui grows in Chile and Argentina, but mostly Chile, earning it the nickname Chilean wineberry due to its intense natural purple hue. Chile’s main exports of maqui are in

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developed markets such as Western Europe with Japan, Italy and Germany representing nearly 90% of total market share. Other markets include the US, South Korea and Brazil.

11.1.23 MEDICINAL MARIJUANA

Medical cannabis, or medical marijuana, consists of cannabis and cannabinoids that are recommended by doctors for several serious health conditions. The use of cannabis as medicine has not been rigorously tested due to production restrictions and other governmental regulations. The use of medical cannabis is controversial. A number of medical organisations have requested removal of cannabis from the list of Schedule I controlled substances, followed by regulatory and scientific review. Others oppose the legalisation of medical cannabis. Studies suggests cannabis can reduce nausea and vomiting during chemotherapy, improve appetite in people with HIV/AIDS, and reduce chronic pain and muscle spasms. Cannabis contains many compounds which are yet to be researched. A cannabis plant includes more than 400 different chemicals, of which about 70 are cannabinoids. In comparison, typical government-approved medications contain only one or two chemicals. The number of active chemicals in cannabis is one reason why treatment with cannabis is difficult to classify and study. Another is resistance among certain factions due to the psychoactive nature of THC in cannabis. Currently, there is insufficient data to draw unassailable conclusions about the safety of medical cannabis.

There are currently 29 countries that recognise some form of medical cannabis, but only Canada and the Netherlands export marijuana for medical use. For instance, medical marijuana officially became legal in Germany in March 2017, opening up a whole new market to Canada. Very little marijuana is actually grown in Germany, although the government’s legalisation framework includes a big push to cultivate the crop on its own for medicinal use to ensure its quality. Therefore, more countries are expected to enter the supply space but medical marijuana is still years away from reaching its high potential, as research is hindered by several regulations including its classification. Cannabis is in Schedule IV of the United Nations' Single Convention on Narcotic Drugs, making it subject to special restrictions. While marijuana/cannabis is illegal in most of the world, the use of medical marijuana is currently legal in Canada, Chile, Colombia, Germany, Greece, Israel, Italy, the Netherlands, Poland, Peru, and Uruguay. Australia has passed laws to allow the use of cannabis for medical and scientific purposes in some states. In the US, 29 states and the District of Colombia have passed legislation permitting the possession, use, and distribution of medical cannabis in some form.

However, any research done so far is minimal, but the potential is huge. Legal cannabis sales recently reached nearly US$6.5 billion in the US, and research claims it can easily reach over US$20 billion by 2020 where medical marijuana may account for nearly half of it.

11.1.24 PAWPAW

Asimina triloba or pawpaw is a small deciduous tree native to the eastern US and Canada, producing a large, yellowish-green to brown fruit. It belongs to the genus Asimina in the same plant family (Annonaceae) as the custard-apple, cherimoya, sweetsop, ylang and soursop. Pawpaw fruits are the largest edible fruit indigenous to the US. It is native to the Eastern, Southern, and Midwestern US and adjacent Ontario, Canada.

Pawpaw fruits have a sweet, custard-like flavour described as similar banana, mango, and cantaloupe, and are commonly eaten fresh. Pawpaw is highly nutritious, with more protein, vitamin C, iron, niacin, calcium, phosphorous, zinc, magnesium, copper, and manganese than apples, oranges, or bananas. To further add value, pawpaw fruit is processed into pulp, which can be used to make many different products such as ice cream, vinaigrette, preserves, and beer.

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The pawpaw leaf is known to possess several health/herbal benefits including being high in fibre, reliving symptoms of indigestion, and even fighting cancer. Phytochemical extracts of the leaves and fruit contain acerogenins, including the neurotoxin annonacin.

Often confused with the more popular tropical fruit papaya, the name “pawpaw” is commonly used to refer to a variety of papaya in some parts of the world, such as Australia, New Zealand and South Africa. Demand at present is low as it is still relatively unknown even in the US. Pawpaw can be grown easily and does not need much capital investment to produce well, just a tropical climate.

11.1.25 PEA PROTEIN

Pea protein is extracted from the yellow pea, Pisum sativum. Pea protein contains legumin, which has some similar properties to casein, and pea protein products are promoted as an alternative to whey protein and even soy.

It is used in a range of allergen-free and vegetarian food products including snacks, nutrition bars, soups, sauces, pasta, biscuits and meat alternatives. It is also used in dairy alternatives such as cheeses and yoghurt.

Whole yellow peas contain over 85% protein and are rich in vital muscle-building ingredients compared to other vegetables. Pea protein is a complete protein, which means it contains all nine of the essential amino acids. Although traditionally used for direct consumption, animal feed ingredients and starch, yellow peas are increasingly being produced to create dry pea protein, a natural supplement made by extracting the soluble pea protein from yellow split peas.

Pea protein powder is among the most hypoallergenic of all protein powders, as it contains no gluten or dairy. It is also easy on the digestive system and does not cause bloating, a common side effect of many other protein powders. Due to concerns pertaining to health, sustainability, or allergen issues from soy and nuts, pea protein has become a huge contender to replace animal protein in the food world. It also supports a healthy heart and reduces the risk of kidney disease.

Currently, North America, France, and China are the top producers and consumers of pea protein. In North America, Canada is the largest producer, providing 30% of the global supply of pea protein. Responding to strong demand in North America, Roquette, the French plant- based ingredient maker, is building the world’s largest pea protein facility in Canada. The facility will open in 2019 for production.

Strong demand is forecast for this product, and demand is expected to outstrip supply. The growing vegetarian/vegan market, prevalence of lactose intolerance and allergies, and demand for affordable and sustainable non-soy plant-based protein powders are some of the main drivers for pea protein. The US and Asia, in particular China and India, are the key markets at present.

11.1.26 PERUVIAN CORN

Choclo is a variety of field corn with large kernels from the Andes. It is also referred to as Peruvian, or Cuzco, corn. In the US, it is best known as the variety used to make the Corn Nuts brand of crunchy salted corn snacks, as well as competing brands such as Trader Joe’s Giant Peruvian Incan corn. It is popular in parts of Central America and South America, especially in Ecuador, Peru, Bolivia and Colombia.

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Another variety, called Peruvian purple corn, purple maize or blue corn, is a flint maize (Zea mays var. indurata) originating from Mesoamerica. This variety is gaining popularity, particularly as a natural food colouring. Peruvian purple corn’s vivid purple pigment comes from its anthocyanins, which are powerful antioxidants with purported health benefits such as better circulation, anti-inflammatory effects, blood glucose stabilisation, and healthy weight maintenance. It is also used in foods and beverages as a natural food colouring (especially in the EU, where the use of artificial colourings is restricted).

Primarily grown in Peru and Ecuador, Peruvian corn has been successfully cultivated in the US (for example, in California). Peruvian purple corn is cultivated in coastal areas, as well as in mountain highlands and valleys in Peru. Some companies in the American Midwest are trying to grow purple corn, but there is little data on how easy it is to cultivate, or if it is grown outside of Peru/the Andes. Giant corn is rapidly becoming more popular in the North American market. Its pleasing flavour and uncommonly large kernel size are well received by consumers in the US, who are becoming more willing to explore new products (according to the Trade Commission of Peru). Purple corn is witnessing strong demand across the US, as well as in the EU (as a colouring, mostly) and Japan (mostly colouring). Outside Peru, purple corn as an ingredient is more common in foods than in beverages. Almost half of global food and drink products containing purple corn launched between November 2010 and October 2015 were in the snack category, largely driven by potato snacks and corn-based snacks. However, the use of purple corn is still very niche, as only a handful of products containing purple corn ingredients, including purple corn, purple corn flour, or purple corn extract, have been launched.

11.1.27 PINDAN WALNUT

Terminalia cunninghamii, often referred to as pindan quondong, pindan walnut or kalumburu almond, is a tree or shrub of the family Combretaceae. It is an indigenous Australian food, native to Western Australia, that only grows in this country. Eaten raw, it is said to taste like almonds; roasted, the flavour is similar to cashews. The pindan walnut is used as more than a nut. The purple fruit’s flesh can be eaten, dried, ground into a powder for use in food, made into a paste, and even used as a fabric dye. There is little information on its nutritional content, but it is generally said to be high in protein.

The pindan walnut (not a true walnut of the Juglans genus) has not become popular because it is produced in only one country, and consumer awareness is extremely limited. It was even recently placed on a list of endangered plants. There is some commercial potential due to its protein content, but it has very little market presence and, given the limited supply, it is not expected to become a significant commercial crop.

11.1.28 QUINOA

Quinoa is an edible seed that is produced from the annual plant, which originated in the Andean region of Peru, Bolivia, Ecuador, Colombia and Chile. It is still Chenopodium quinoa primarily grown in these countries today. The herbaceous plant is grown as a grain crop primarily for the seeds. It is a pseudo-cereal, not a grass. When cooked properly, the small seed has a slight pop when chewed, with a fluffy consistency and a characteristic curly white ‘tail’. Unwashed, quinoa has a bitter flavour from its naturally occurring saponins content; however, most quinoa sold commercially has been pre-rinsed, so it has a mild, delicate nutty flavour.

The Food and Agriculture Organization of the United Nations declared 2013 to be the International Year of Quinoa. The main trends driving the rise in quinoa consumption are veganism and the desire to eat more plant-based protein in general, the ever-rising interest in gluten-free foods, and the ongoing interest in superfoods. Quinoa is one of the few plant-

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based complete proteins, containing all the necessary amino acids, and is a good source of calcium, fibre and iron, as well as a relatively good source of several vitamins and minerals. It is low on the glycaemic index. Quinoa has the potential for use in many modern types of cuisine. Beyond the seed itself, it can be used in flour, pasta, bread and even milk.

Beyond South America, it is also grown in the US, Europe (France, England, the Netherlands, Belgium, Germany and Spain), India and Australia. Tasmania and Western Australia are relatively new production regions. Following a surge in demand in 2014 and 2015, more than 50 countries started cultivating quinoa. This caused an oversupply in 2016 and 2017, driving down prices. Australian producers are still feeling the effects of this price drop as it costs them more to produce quinoa than in South America. However, overall consumption continues to rise due to the high nutritional content of quinoa and its reputation as a superfood, so demand is expected to continue over the next few years at least. For example, quinoa milk might be harder to find than other dairy alternatives, but it is becoming trendy.

11.1.29 SACHA INCHI

Plukenetia volubilis, commonly known as sacha inchi, sacha peanut, mountain peanut, Inca nut or Inca peanut, is a perennial plant in the Euphorbiaceae family. In the Amazon rainforest in Peru, it has been grown by indigenous people for centuries, and can be produced in warm climates up to altitudes of 1,700 metres, provided there is a regular supply of water and good drainage. It grows better in acidic soils and alluvial flats near rivers.

These seeds are rich in protein, omega-3, -6 and -9 fatty acids, alpha tocopherol vitamin E, carotenoids (vitamin A), and fibre. This superfood is easily digested and unlikely to cause allergies or irritation. It can also be processed into oil, with a flavour similar to olive oil, slightly lighter and nuttier, but it contains more protein and omega-3.

Sacha inchi is native to much of tropical South America (Suriname, Venezuela, Bolivia, Colombia, Ecuador, Peru, and north-western Brazil), as well as some of the Windward Islands in the Caribbean. It is now also being cultivated commercially in Southeast Asia, especially Thailand.

Sacha inchi matures quickly. Sacha inchi flowers five months after being planted, and bears seeds around the eighth month. It is also highly productive, bearing fruit nearly year-round. In September 2014, the US Food and Drug Administration granted GRAS status to Peruvian sacha inchi oil which resulted in rapid growth through to 2016.

Sacha Inchi is gaining popularity across many markets. In Europe, it is currently used more widely in the cosmetics industry than cooking. Because sacha inchi is not grown in Europe, buyers of the oil rely on imports. Currently, Peru is still the largest exporter of sacha inchi oil. Production of the oil in Ecuador and Colombia is growing, but their role on the international market for sacha inchi oil remains negligible. Western European countries such as France, Spain, and Germany are the largest importers. Sacha inchi’s popularity is also rising in Asia, particularly China and Japan, and the US. In addition to Peru, Thailand also exports to China.

11.1.30 SAFFRON

Saffron is a spice derived from the flower of Crocus sativus, commonly known as the saffron crocus. The vividly coloured stigmas and styles, called threads, are hand-picked and dried for use as a seasoning and food colouring agent. Deep yellow/orange in colour, the spice is used for its flavour, aroma and colour, and is commonly found in Mediterranean and Asian cuisines, as well as in baked goods in some European countries. It is also used in the food, medical, and cosmetic industries.

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Saffron’s purported health benefits include being anti-anxiety, anti-inflammatory, anti- carcinogenic, anti-mutagenic, and being high in antioxidants. It is also used in the treatment of asthma, cancer, hypoxia, cough, hypertension, multiple sclerosis, and other ailments.

Iran is the top global producer of saffron. Other large suppliers include Greece, Spain, and India. Saffron continues to be in demand in both developed and developing economies.

Saffron is amongst the most expensive spices in the world by weight. In 2016, the market for saffron in the US, China, Iran and Western Europe was valued at US$200 million. The rising demand for plant-based natural ingredients is driving saffron consumption in these countries. Demand for saffron as an herbal alternative in medical applications will also drive demand.

11.1.31 SEA URCHIN ROE

Sea urchin roe, the sex organs of both male and female sea urchins, is a delicacy in many countries. In Japan, where it is called uni, it is served raw in sushi or sashimi, seasoned with soy sauce and wasabi. Japan imports sea urchin roe in large quantities from the US, South Korea, and other producers. The export market in Japan is valued at about US$200 million annually, according to Urchin Aquaculture Australia. The high Japanese demand has raised concerns about overfishing.

Some people consider sea urchin roe to be an aphrodisiac. It is low in fat and calories, and high in fibre, protein, omega-3 fatty acids, zinc, and vitamins A and C. Sea urchins are commonly found along the rocky ocean floor in both shallow and deeper water, and they also inhabit coral reefs. The Atlantic Ocean, the Caribbean, the Pacific Ocean surrounding the islands of Hawaii, and both the Indian and Pacific oceans around Australia's coastline have the heaviest habitations of sea urchins. However, they are caught along all coastal regions, including those of Japan, South Korea, Australia (particularly New South Wales), and the US (mostly Hawaii, California and Maine). The research by the National Marine Science Centre in Coffs Harbour, Australia, is trialling new technology to boost the production of live sea urchins to large-scale for overseas export, as demand is higher than supply and prices of sea urchins are rising by 10% per year.

Despite its abundant habitats, the sea urchin is considered threatened due to higher demand across the world, particularly from Japan, China, and the US. One of the reasons for this is the sea urchins’ transition from a delicacy to a standard on restaurant menus in some countries, including Japan. As a result, the California Sea Urchin Commission has placed restrictions on licences issued. Maine used to export 100% of its urchin catch but now most is consumed in the US and it has also placed some restrictions on licences. Such restrictions are not expected to reduce demand.

11.1.32 SEAWEED

Seaweed consists of various types of multicellular marine algae, with thousands of species identified across the world, including red, green and brown algae. Seaweed is extremely popular in food for its nutritional benefits, and is also used in other industries. Seaweed extract may contain antioxidants and may have antibacterial and anti-inflammatory effects. Some species contain omega-3 fatty acids (DHA and EPA), making them a valuable source of these acids for vegetarians who cannot obtain them from other sources.

Major providers of seaweed are sea farms in China, Japan, South Korea, Indonesia and the Philippines. Booming demand for seaweed in the past decade has given rise to production facilities in Canada and the United States (US) on a larger scale, and Scotland and Australia on a smaller scale. Examples of uses for US-produced seaweed are locally manufactured foods, fertiliser, and beauty products. It can be difficult to obtain a permit to produce seaweed

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in the US. South Korea’s investment in seaweed production is significant, as the country is gearing up to generate a seaweed market valued at over $1 billion per year by 2024, as part of the nation’s plan to increase export revenue. Goals include nearly 400,000 tonnes of dried seaweed and other products exported in 2024, up from 250,000 tonnes valued at $350 million exported in 2016, as reported by South Korea’s Ministry of Oceans and Fisheries.

Future use of seaweed and seaweed-derived products will be driven by rising consumption in the fertiliser, animal feed, and medical/healthcare sectors. Rising acceptance of seaweed extracts such as agar, carrageenan and alginate for industrial use will also underpin growth. However, its major use is human consumption, with red seaweed the most popular. Dried laver, known as gim in Korean, is a roasted product flavoured with sesame oil and salt that is served as a side dish in traditional Korean meals.

11.1.33 STEVIA

Stevia is a sugar substitute and sweetener derived from the leaves of the plant species Stevia rebaudiana. The active compounds of stevia are steviol glycosides (mainly stevioside and rebaudioside), which are about 150 times the sweetness of sugar, heat-stable, pH- stable, and not fermentable. The flavour of stevia has a slower onset and longer duration than that of sugar and some of its extracts have a bitter or liquorice-like aftertaste at high concentrations.

Stevia is segmented by application into food, beverages, and pharmaceuticals. It is widely used in a variety of food products ‒ including confectionery, desserts, baked goods, snack foods and jellies ‒ as it can be incorporated easily into a product to impart sweetness with few calories. The top producers of stevia are China, Korea and South America. Production has risen over recent years in India, Thailand, Egypt, Kenya, Colombia and the US. Market reliance on extracts originating from China is diminishing, while India’s share is on the rise.

Due to increasing incidences of lifestyle diseases and rising health consciousness among consumers, demand for low-calorie natural sweeteners has increased. In response, the stevia market has grown significantly in the past several years: consumption tripled from 2011 to 2016. While stevia is still a small part of sweetener sales, companies such as Cargill Inc. and ED&F Man Holdings Ltd are investing in stevia, particularly to improve the flavour.

Demand for stevia is forecast to reach US$120 million in 2021, after yearly gains of over 11%. Overall growth will be slower in 2017‒21 than in 2011‒16, due to trends in the beverage industry, including decreased production of carbonated soft drinks and the growing popularity of unsweetened ready-to-drink tea and coffee. In the US, high-purity stevia glycoside extracts have GRAS status and allowed as ingredients in food products, but stevia leaf and crude extracts do not have GRAS status or approval from the Food and Drug Administration (FDA) for use in food.

Stevia-based natural sweeteners have been part of the regular diet of consumers in the Asia- Pacific region for a long time, as well as in Japan, China, and South Korea. The EU approved stevia additives in 2011. The latest countries to join the stevia trend are Indonesia and India. With a growing number of diabetics and people who are tracking their calorie intake, demand for sugar alternatives is increasing strongly. Stevia’s primary threats are other low-calorie sweeteners and sugar itself, which has 80% of the market.

11.1.34 TRUFFLES

A truffle is the fruiting body of a subterranean ascomycete fungus, one of the many species of the Tuber genus. Truffles are ectomycorrhizal, which means they have a symbiotic relationship with tree roots. Among the most expensive foods in the world, truffles are prized

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and in great demand around the world. The annual market for truffles is expected to exceed $6 billion within the next decade.

The nutritional content of truffles varies greatly by variety, but they are prized for their flavour rather than nutritional content. Truffles are excellent sources of minerals (copper, magnesium, manganese, zinc, iron, sodium, potassium and calcium), but are low in vitamins, except for Vitamin C. Some contain small amounts of aluminium. Truffles are said to have anti-inflammatory and antibacterial properties.

There are thousands of species of truffles. While they are found across China, India, the US, Australia, New Zealand and the European Union, the most prized truffles grow in a narrow region that stretches from northern Spain through southern France, north-western Italy and Croatia. Some prized white truffles (Tuber magnatum) from the Italian Piedmont region sell for more than US$3,000 per pound (450 grams), going as high as US$6,000. Black truffles (T. melanosporum) from the Périgord region in south-western France sell for about $2,000 per pound. Chinese truffles are extremely cheap compared to truffles from other countries, with wholesale prices as low as $20‒30 per pound. Due to dwindling native harvests and increasing competition from Chinese imports, French truffle producers are planting 300,000 to 400,000 new trees annually, but it takes a decade or more for trees to begin to produce truffles. In addition, truffle farming is costly and only black truffles can be grown commercially. Many attempts to cultivate white truffles commercially have failed, as most grow wild in their native zones.

Truffles are a highly valued ingredient in French, Croatian, Georgian, Bulgarian, Greek, Italian, Middle Eastern and Spanish cuisine, as well as in international gourmet cuisine. International truffle sales are expected to reach $6 billion during the next 10 years. Demand is high, and supply cannot meet it. Truffle imports have been growing strongly in the US during the past decade, and are expected to continue rising. Demand is also strong in Asia, particularly in Hong Kong and India, and Australian-grown truffles are exported to these regions.

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178 Scan of new and emerging agricultural industry opportunities and market scoping by Colin Decker and Bettina Kurnik October 2018

AgriFutures Australia Publication No. 18/040 AgriFutures Australia Project No. PRJ-010938 ISBN: 978-1-76053-007-5

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