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Doing Business in Morocco
The Virginia Economic Development Partnership International Trade team hosted a conference on Wednesday, August 24th, to talk about business opportunities in Morocco. The guest speaker for the event was David Garay, Managing Partner of Indegate Consulting in Casablanca. The event was held online as part of the VEDP’s program to promote international trade.
From his office in Casablanca, Mr. Garay spoke extensively and enthusiastically of the many advantages of doing business in and through Morocco as entryway to Africa for international business development. Economic insights and opportunities of Morocco and Africa highlighted by Mr. Garay included:
- Morocco has multiple free trade agreements with the EU, US, and Africa, and is in negotiations with Canada
- Morocco is a multilingual country with English, French, Spanish, and Arabic used throughout the business community
- Morocco has 38 ports, including Tanger — the largest port in North Africa. Tanger handled 9 million TEUs in 2021
- Casablanca Airport is the #1 Europe-Africa hub airport
- The country has a modern infrastructure, including 2000km of motorways, the first high-speed train in Africa connecting Tanger and Casablanca, and tramways in Rabat and Casablanca
- By 2030 Morocco is forecast to become the #1 car manufacturer in Africa
- 70% of the word’s phosphate reserves, used in fertilizer production, is found in Morocco
- The Morocco defense market is valued at $6.8B in 2022 and estimated to grow more than 6% in 2023-2027
- The Noor Solar Project is the largest African solar plant, leading the way in renewable energy in Africa
The VEDP will be hosting a trade mission to South Africa and Morocco from November 7th – 11th, 2022. Virginia-based companies can sign up for this event at the following link:
https://www.eventbrite.com/e/trade-mission-to-south-africa-morocco-2022-registration-298319972067
Previous VEDP international trade briefings are available at:
https://exportvirginia.org/resources?rtype=40
For further information regarding business in Morocco and Africa, contact David Garay and Indegate Consulting at the following:
(+212) 6 06 06 53 39
(+212) 6 56 60 66 73
Africa Business Trends and Outlook
| By Kai Heaven |
The Virginia Economic Development Partnership hosted its Africa Business Conference at the Tower Club in Tyson’s Corner, Virginia on August 26, 2022. Ellen Meinhart and Mercedes Sanchez, VEDP Senior International Trade Managers, and Ed Laughlin, VEDP Global Defense Manager, were on hand to make introductions and start off the event. Richard Zurba of Zurcom International based in Johannesburg, South Africa gave the main presentation.
Mr. Zurba began the presentation with an overview of past and current African economic facts and trends. Africa is historically known for its abundance of natural resources and its vast population intersecting many races, cultures, and classifications. In recent times, there has been focus on how African states can contribute more to the global economy not only for their own financial gain for the overall advancement of globalization. Nigeria in particular has been a star state, being a part of MINT (Mexico, Indonesia, Nigeria and Thailand), as a group of emerging economies with great possibilities in their future.
The economic growth of African states, Zurba noted, has been noted in industries such as agriculture, mining, energy expansion, and product diversification. The African Union defines The African Continental Free Trade Area (AfCFTA) as the strategic framework for delivering Africa’s goal for inclusive and sustainable development and is a concrete manifestation of the pan-African drive that is popular throughout the continent. This organization has created one common market for African states, most of which have ratified the AfCFTA. Among its goals are common tariffs, standard assessments, sanitary measures, customs regulations, and other solutions to an initially disorganized market situation. The mutuality of the agreement allows for easier analytics and better transparency with the organization and the continent. With the AfCFTA coming into effect in January 2021, it is positioned to make great economic and business relationships globally.
Zurba continued the discussion by looking at African population trends. Zurba explained that African states have seen consistent increases in its population boasting 1.4 billion people today and is expected to grow to 2.5 billion by 2035. It is a continent of a youthful generation with 300 million people comprising the middle class. There has also been a strong shift towards democracy within the continent as African youth are strictly anti-corruption, even towards the politicians of always. They are strongly demanding educational services such as access to universities, technology, and corporate training to make them effective global citizens. Africans in the diaspora, specifically those who grew up in the US are keen on these matters and have even extended themselves to go back to Africa to train their fellow countrymen.
Stemming from Africa’s vast cultural heritage, citizens speak a variety of languages, mainly French and English. It is estimated that about 60% of Africans on the continent speak English and this figure is quickly growing. The United States, which is viewed as the primary source of business and culture also contributes to those changing figures. These factors, coupled with increased access to global information as well as an entrepreneurial and educational focused population provides a unique opportunity for the country to arrange itself for global success. As Zurba previously mentioned, Africa has a youthful population especially in comparison to its global neighbors. By 2050, Chinese, Japanese, and European demographics will shift to the elderly, but Africa will remain youthful. The Under-30 culture in Africa is prolific, boosting its human resource capabilities.
Zurba also touched on the impact of Chinese investment in Africa. Zurba said China has invested a great deal in Africa that has yielded some good such as infrastructure and economic development. However, the Chinese have been acquiring African companies instead of partnering with them which causes some animosity among partner-focused African cultures. The Chinese approach was to prop up the corrupt governments and political leaders to the benefit of China and at the expense of the African people. China may be reducing exports and has decreased their presence in trade shows. COVID restrictions in China could be used to explain the recent decline in Chinese activity. In contrast to the slowing of Chinese investment, the African energy sectors have grown by 10-20%. And with other investments such as $300B received from the European Union, energy and other industries will be observing notable growth rates.
Africa has faced years of exploitation in the past and has positively made a name for themselves on the global stage. As an emerging economy with a youthful populace focused on accountability from governments, educational and technical skill advancement, and many other promising opportunities, Africa will be doing great things for globalization. Increased foreign direct investment as well as training for the large populace are also contributing factors to its success. Expansion to the United States market will give it even more room for growth as the United States is the largest global economy in the world.
The VEDP will be hosting a Trade Mission to South Africa and Morocco November 7th – 11th. Details are available here, and signup is at https://south-africa-morocco-trade-mission-2022.eventbrite.com.
China Olive Oil Market Analysis
| By Kimberly Kim |
Q1: Is there any interest from Chinese buyers to purchase US olive oil?
The Chinese middle class is booming and imports of foreign products continue to grow. Chinese consumer market interest in foreign olive oil has experienced an increase in recent years. As more and more Chinese consumers start to appreciate foreign food, especially salads, Chinese imports of olive oil will most likely continue to increase in the coming years.
By far the most imports of olive oil are coming from Spain, which takes more than 80% of the market in China.
80% of the olive oil is consumed in first-tier cities like Shanghai and Beijing. This doesn’t come as a surprise as these cities are more developed, with people who have more money and a stronger desire to try out Western products.
Chinese consumers mainly prefer extra-virgin oil. Pricing your products at a higher level might not necessarily adversely impact sales, especially as cross-border sales tend to have high logistics costs.
Q2: Is there an agency or business consortium in China sellers can contact that buys US olive oil?
Chinainout is a leading and professional platform for foreign manufacturers to promote business in China.
http://oliveoil.chinainout.com is a website specifically designed for olive oil products, however most of the information on this site is about companies from Spain, Italy, Greece, Tunisia, Turkey, Syria, and Morocco. Initial review of the site shows no information regarding American olive oil companies currently selling in China.
There are also business directories for sale online which include olive oil import/export company introductions and contact information. The olive oil bottle prices range from 280 RMB—7800 RMB ($40 USD — $1100 USD).
Q3: Do buyers in China prefer to purchase in large volume containers (1-liter, 2-liter, 5-liter, or larger) or 250ml and 500ml bottles?
750ml is the most popular size since olive oil products are consumed as gifts in China. Also, they often come with well-made giftable boxes. 1-liter and 5-liter are also popular sizes for household use.
Q4: Who is responsible for import licenses? Are import licenses handled by the buyer in China or seller in the US?
Buyers are responsible for import licenses.
Q5: What is the market price for gourmet olive oil in China?
The following table shows the top 10 olive oils available in the Chinese market, according to sales in Tmall by Alibaba.
 |
Brand: Betty VallandPrice: 115RMB ($16.4 USD) 5LMade in China, Fujian Province20,000 bottles sold per month |
 |
Brand: OlivoilaPrice: 218 RMB ($31.1 USD) 750ml*2 Made in China, Shanghai, 10,090 bottles sold per month |
 |
Brand: Theotu Price: 49 RMB ($7 USD) 750ml, Made in Spain9,500 bottles sold per month |
 |
Brand: OlivoilaPrice: 165.60 RMB ($23.5 USD) 1.6LMade in China, Shanghai6,000 bottles sold per month |
 |
Brand: BellinaPrice: 99RMB ($14.1 USD) 750ml, Made in Spain4,722 bottles sold per month |
 |
Brand: Theotu, Price: 198 RMB ($28.2 USD) 750ml*2Made in Spain4,713 bottles sold per month |
 |
Brand: MuelolivaPrice: 25.9 RMB ($3.9 USD) 250mlMade in Spain4,266 bottles sold per month |
 |
Brand: BetisPrice: 48 RMB ($7 USD) 250mlMade in Spain3,854 bottles sold per month |
 |
Brand: OlivoilaPrice: 165 RMB ($23.5 USD) 750ml*2 Made in China, Shanghai3,388 bottles sold per month |
 |
Brand: BetisPrice: 258 RMB ($36.8 USD) 500ml*2Made in Spain3,339 bottles sold per month |
Q6: Are there any other fees or licenses required to sell olive oil to buyers in China?
Information, Procedures and Tariffs Required to Import Olive Oil
A. Qualifications required by domestic consignees (companies) of olive oil imports:
- Food business qualification or food circulation license
- Import and export rights
- Automatic import license
B. Information required for edible oil import declaration:
- The official certificate of origin
- Official health certificate of producing country
- Manufacturer’s ingredient list
- Manufacturer’s product inspection report
- Proof that the product is registered and approved for sale in its country (region)
- One copy of the original packaging label sample and three copies of the Chinese and English label sample
- The official quarantine certificate of the quarantine manufacturer
C. Proof/license documents need to be provided before import
- The official certificate of origin
- Official health certificate of producing country
- Manufacturer’s ingredient list
D. Olive oil import duty rate:
| Import tariffs | VAT | Comprehensive tax rate | |
| Virgin olive oil | 10% | 13% | 24.3% |
| Extra virgin olive oil | 10% | 17% | 28.7% |
E. Olive oil import declaration process:
- Sign contract
- Replacement order
- Customs declaration pre-record
- Three inspections: Commodity, animal and plant, and sanitary inspections
- Sampling and submission inspection (if randomly selected)
- Customs document release and tax release form*
- Tax payment
- Customs inspection (if randomly selected)
- Customs electronic release
- Delivery of goods
Q7: Is it sustainable to sell olive oil via cross border e-commerce?
Cross border e-commerce can be a very successful business model. There are many companies that have succeeded immensely this way.
But the Chinese government has started to clamp down on cross border sales due to issues with everything from salmonella contamination to expired products.
China has also introduced a Positive List. Only products that fall into one of the categories on the Positive List can be imported into China through a cross-border eCommerce model.
In April 2016, China issued two versions of the “Positive List” for cross-border eCommerce, with the more complete version listing a total of 1,293 categories of products. This list was updated in 2018, taking that total to 1,321 product categories.
Fortunately, olive oil is included in the positive list, falling under the following tariff codes and descriptions:
15091000 Virgin olive oil
15099000 Refined olive oil
15100000 Other olive oils
Q8: Any other helpful information to successfully sell US olive oil to Chinese buyers?
If you plan to sell online in China, you have two main options:
- Sell the products both in-country and online. Selling in-country and on websites like Tmall will give you exposure to around 550 million consumers.
- Sell via cross border e-commerce, on websites like Tmall Global, avoid lengthy registration processes, and have lower costs. This is a fast track option for initial sales into the Chinese market.
The second option gives you exposure to around 100 million consumers and is recommended for companies that are less experienced in the Chinese market.
Summary
Olive oil is becoming increasingly popular in China where Spain is the biggest exporter, contributing to more than 80% of the market. Italy, Greece, and Turkey are seeing increased sales of olive oil in China.
Selling via cross border e-commerce is easier and less costly compared to traditional imports, as international companies don’t currently need to register with local authorities, provide test reports, or comply with the China Guobiao (GB) national testing certification standards.
Sources:
Information, Procedures and Tariffs Required to Import Olive Oil: China Customs
Positive List Helper: https://www.tmogroup.asia/china-positive-list/
*Imported olive oil customs clearance supervision certificate 7A. 7 refers to automatic permit; A refers to inbound cargo clearance form. Submit the certificate of origin of the exporting country and file it on the consignee’s website at ire.customs.cn
This report was researched and prepared by Kimberly Yinhua Kim, International Business Development Specialist at Intelliwings
For more information, please contact info@intelliwings.com