5 Reasons Why Agriculture and Processed Food Products Export is Booming
Agriculture and processed food products export is a lucrative business that has been growing steadily in recent years. According to the Food and Agriculture Organization (FAO), the global value of agricultural and processed food products trade increased by 3.6% in 2019, reaching $1.5 trillion. What are the factors behind this trend and how can you benefit from it? Here are five reasons why agriculture and processed food products export is booming.
1. Rising demand from emerging markets
As the world population grows and incomes rise, especially in developing countries, the demand for food also increases. According to the World Bank, the global food demand is expected to grow by 70% by 2050, with most of the growth coming from Asia and Africa. These regions offer huge opportunities for exporters of agricultural and processed food products, as they have large and diverse markets, growing middle classes, and changing consumer preferences.
2. Advancements in technology and innovation
Technology and innovation have made it easier and cheaper to produce, process, transport, and market agricultural and processed food products. For example, biotechnology, precision agriculture, irrigation systems, cold chains, packaging, e-commerce, and digital marketing are some of the tools that have improved the efficiency, quality, safety, and competitiveness of the food sector.
3. Supportive policies and trade agreements
Many governments and international organizations have recognized the importance of agriculture and processed food products export for economic development, food security, and poverty reduction. They have implemented policies and trade agreements that facilitate and promote the trade of food products across borders. For example, the World Trade Organization (WTO) has reduced tariffs and non-tariff barriers on agricultural goods, while regional trade blocs such as the European Union (EU), the African Continental Free Trade Area (AfCFTA), and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) have created large free trade areas for food products.
4. Diversification of products and markets
Agriculture and processed food products export is not limited to traditional commodities such as grains, oilseeds, fruits, vegetables, meat, dairy, and fish. There is a growing demand for value-added products such as organic, fair trade, halal, kosher, vegan, gluten-free, ready-to-eat, functional, fortified, and specialty foods. These products offer higher margins and cater to niche markets that are willing to pay more for quality, convenience, health, or ethical reasons.
5. Competitive advantage and branding
Agriculture and processed food products export can also be a source of competitive advantage and branding for countries and companies that have a reputation for excellence in food production and processing. For example, New Zealand is known for its high-quality dairy products; Italy is famous for its pasta, cheese, wine, and olive oil; Thailand is renowned for its rice, seafood, and spices; Brazil is a leader in coffee, sugar, soybeans, and beef; and Canada is a major exporter of wheat, canola, maple syrup, and ice wine.
These are some of the reasons why agriculture and processed food products export is booming. If you are interested in joining this sector or expanding your existing business, you need to do your research on the market opportunities, challenges, regulations, standards, trends, competitors, customers, suppliers, and partners that are relevant to your product and target market. You also need to develop a sound business plan that outlines your goals, strategies, actions, resources, and budget.
The Global Trends of Agriculture and Processed Food Products Export
According to the Food and Agriculture Organization of the United Nations (FAO), the global trade of agricultural and processed food products reached USD 1.8 trillion in 2019, accounting for 10.4 percent of the total merchandise trade. The main exporters of these products were the European Union, the United States, Brazil, China and Canada, while the main importers were the European Union, the United States, China, Japan and the United Kingdom.
The impact of the COVID-19 pandemic on the agriculture and processed food products export was mixed, depending on the product category, the market destination and the supply chain disruptions. Some products, such as cereals, oilseeds, sugar and dairy, saw an increase in demand and prices due to stockpiling and food security concerns. Other products, such as fruits, vegetables, meat and fish, faced a decline in demand and prices due to reduced consumption in food service and tourism sectors.
The U.S. Export Performance and Outlook for Agriculture and Processed Food Products
The United States is one of the world’s largest exporters of agriculture and processed food products, with a total export value of USD 38.17 billion in 2022. This represents a compound average growth of 2.5 percent from 2013 to 2022. The top 10 markets for U.S. processed food products in 2022 were Canada, Mexico, the European Union, Japan, South Korea, China, the Philippines, Australia, the United Kingdom and Taiwan.
The U.S. Department of Agriculture’s Foreign Agricultural Service (USDA-FAS) projects that U.S. exports of agriculture and processed food products will grow by 6 percent in fiscal year 2023, reaching USD 164 billion. The main drivers for this growth are the recovery of global demand from the pandemic, the implementation of trade agreements such as the U.S.-Mexico-Canada Agreement (USMCA) and the U.S.-China Phase One Agreement, and the diversification of export markets through trade missions and promotional activities.
References:
http://apeda.gov.in/apedawebsite/corporate_info/APEDA-Act-As-on-date.pdf
http://agriexchange.apeda.gov.in/About_Agri_Exchange.aspx
https://www.fao.org/food-agriculture-statistics/statistical-domains/crop-livestock-and-food/data/en/
https://www.fas.usda.gov/data/commodities/processed-food-products
https://www.usda.gov/media/press-releases/2023/08/31/usda-projects-record-ag-exports-fy-2023
http://www.fao.org/trade/en/
https://www.intracen.org/itc/sectors/processed-food-and-agri-business/
https://www.fas.usda.gov/
https://ec.europa.eu/info/food-farming-fisheries/trade_en
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