International Trade Essay

Introduction

Multicrop Australia Pty. Ltd. a 100% Australian owned company, that offers eco-friendly solutions for the Agricultural and Domestic markets. The Agriculture market is serviced by groups such as (CRT) Combined Rural Traders, NRI (National Rural Independents) and AIRR that service the larger market. They sell a range of fertilisers, eco-friendly insecticides, eco-friendly snail & slug bait and an eco-friendly animal repellent.
This report is constructed to assist Multicrop Australia Pty. Ltd. to make the correct choices as they move into the export markets around the world and South Africa which has very arid dry farmland. A report commissioned in 1997 highlighted that legumes can be utilised in rotation with other crops to enhance the nitrogen levels of soils. For the trial they selected forage plants that can be introduced into the degraded grasslands of South Africa and Zimbabwe the goal to enhance production of stock feed for animal production. Another big area of opportunity is the citrus market in South Africa this is a large part of South Africa’s agriculture. Multicrop would deal with a distributor under a licencing agreement to give them the access to produce our range locally. Multicrop will receive a licence fee for the rights to our blends and also fees for the training of the South African operator to learn and create the blends. Our quality control systems will be implemented in this deal to ensure the product is always a premium product.
Business Description
Multicrop produces and distributes a range of both organic and chemical based fertiliser plus a range of insecticides for agriculture. The range includes Maxicrop Complex Seaweed Extract + Fertiliser NPK, Maxicrop Multiple Liquid Seaweed – (Organic), Ecofish Plant & Soil Treatment (Organic), Multiguard Snail & Slugkiller and Scat Bird & Animal Repellent.
Multicrops eco friendly solutions organic very advantageous for South Africa on their farms.
Multicrop’s short-term goal is too increase its sales in Australia through its current outlets and resellers and to take a larger piece of the domestic and agriculture pie from its competitors. Multicrop’s long-term goal is to grow a very substantial export market global opportunity once we kick-start on South Africa market. Industry Description
The Australian market is predominantly controlled by the dry fertiliser companies - Incitec/Pivot and it uses 5,000,000 million to 6,000,000 tonnes a year of the granule fertiliser, the liquid market is growing slowly as farmers become more aware of the harm the are doing to their soils each year and it is made from toxic chemicals sulphuric acid, nitric acid and many other nasty products. Multicrop’s range of liquid fertilisers, are made from natural ocean products – seaweed and fish hence.
From a South African point of view they have a few issues with their fertiliser industry it is controlled by a ‘Big 4’ who account for 94% of sales and have been taken to task over price fixing and other issues by the South African Government. Also the use of genetically modified crops and along with hazardous pesticides, herbicides and fertilisers is very damaging to South Africa’s reputation as a grower of quality produce/grain, it could damage South Africa and effect it in lucrative export markets. South Africa is a high quantity importer of fertiliser to satisfy it’s local fertiliser demand. South Africa has gone from 20 % of fertiliser needs was imported in 1990; in 1999, 40 % and currently it imports over 65 % of South Africa’s fertiliser needs.
Government Policies in South Africa - South Africa is very open to FDI and is making big gains from a co-operative arrangement with India. Trade openness has revitalised historical India-Africa trading links. “The value of bilateral trade jumped from US$ 5.3 billion in 2001 to US$12 billion in 2005 to US$ 63 billion in 2011. African exports to India have been growing annually at 32.2% while Indian exports to Africa

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