7 Reasons Why Cereals Export is a Lucrative Business Opportunity

Cereals are one of the most important agricultural products in the world, providing food and feed for humans and animals. Cereals are also the world’s 25th most traded product, with a total trade of $159 billion in 2021. In this article, we will explore some of the reasons why cereals export is a lucrative business opportunity for farmers, traders and entrepreneurs.

1. High demand and growing markets:

Cereals are consumed by billions of people around the world, especially in developing countries where they are a staple food. The demand for cereals is expected to increase as the global population grows and incomes rise. According to the Food and Agriculture Organization (FAO), the world will need to produce 50% more cereals by 2050 to feed the projected population of 9.7 billion. Moreover, some of the largest importers of cereals are emerging economies with high growth potential, such as China, Egypt, Mexico, Japan and Vietnam. These markets offer opportunities for exporters to expand their customer base and increase their profits.

2. Competitive advantage and diversification:

Cereals export can give farmers and traders a competitive advantage over their domestic competitors, as they can access larger and more diverse markets. Exporting can also help them diversify their income sources and reduce their exposure to price fluctuations and market shocks in their local markets. For example, if the domestic demand for cereals declines due to a recession or a natural disaster, exporters can still sell their products to foreign buyers who may have different preferences and needs.

3. Value addition and innovation:

Cereals export can also create opportunities for value addition and innovation, as exporters can offer different types of cereals or processed products that meet the specific requirements and tastes of foreign consumers. For instance, exporters can produce organic, gluten-free, fortified or flavored cereals that cater to niche markets or health-conscious customers. Exporters can also invest in new technologies and equipment that improve the quality, safety and efficiency of their production and distribution processes.

4. Government support and incentives:

Many governments around the world support and encourage cereals export, as they recognize its benefits for the economy, the environment and the society. For example, some governments provide subsidies, tax breaks, credit facilities or insurance schemes to help exporters overcome financial or logistical barriers. Some governments also negotiate trade agreements or lower tariffs with other countries to facilitate market access and reduce trade costs for exporters.

5. International standards and regulations:

Cereals export can also help exporters improve their compliance with international standards and regulations, which can enhance their reputation and credibility in the global market. For example, some importers require exporters to follow certain quality, safety or environmental standards or certifications, such as ISO, HACCP or Fairtrade. By meeting these standards or certifications, exporters can demonstrate their professionalism and social responsibility, as well as increase their customer satisfaction and loyalty.

6. Networking and learning:

Cereals export can also enable exporters to network and learn from other players in the global market, such as buyers, suppliers, distributors or competitors. By interacting with these players, exporters can gain valuable insights into market trends, consumer preferences, best practices or new opportunities. Exporters can also participate in trade fairs, exhibitions or conferences where they can showcase their products, exchange information and establish contacts.

7. Social impact and sustainability:

Cereals export can also have a positive social impact and contribute to sustainability goals, such as reducing poverty, hunger or malnutrition; promoting rural development or gender equality; or protecting natural resources or biodiversity. For example, by exporting cereals, farmers can increase their income and livelihoods; traders can create jobs and income opportunities for others; consumers can access more affordable and nutritious food; and the environment can benefit from more efficient use of land, water or energy.

Cereals export is a lucrative business opportunity that offers many advantages for farmers, traders and entrepreneurs who want to tap into the global market. By exporting cereals, they can meet the high demand and growing markets for cereals; gain a competitive advantage and diversify their income sources; add value and innovate their products; benefit from government support and incentives; comply with international standards and regulations; network and learn from other market players; and make a positive social impact and contribute to sustainability goals.

Cereals Export: A Global Overview

Cereals are one of the most important agricultural commodities in the world, providing food, feed, and biofuel for millions of people. According to the FAO, the global production of cereals reached 2 719 million tonnes in 2020, an increase of 1.9 percent from 2019. However, the global trade of cereals has been affected by various factors, such as weather conditions, market fluctuations, trade policies, and the COVID-19 pandemic.

Cereals Export: Trends and Patterns

The main exporters of cereals in 2020 were the United States, the European Union, Russia, Ukraine, and Canada, accounting for 64 percent of the total exports. The main importers were China, Egypt, Japan, Mexico, and Saudi Arabia, accounting for 38 percent of the total imports. The main cereals traded in the world market are wheat, maize (corn), rice, barley, sorghum, and millet.

The global export of cereals increased by 5.4 percent in 2020, reaching 448 million tonnes. The largest increase was observed for maize exports, which grew by 14.4 percent to 178 million tonnes, mainly driven by the strong demand from China. Wheat exports also increased by 4.4 percent to 188 million tonnes, while rice exports decreased by 1.8 percent to 44 million tonnes.

The global export prices of cereals also rose significantly in 2020, reaching their highest levels since 2014. The FAO cereal price index averaged 116.6 points in 2020, up by 6.6 percent from 2019. The increase was mainly due to the higher prices of wheat and maize, which were affected by lower production prospects in some regions, strong demand from importing countries, and currency movements.

Cereals Export: Challenges and Opportunities

The global trade of cereals faces several challenges and uncertainties in the near future, such as the impact of climate change on crop yields and quality, the volatility of market prices and exchange rates, the trade tensions and disputes among major players, and the ongoing effects of the COVID-19 pandemic on supply chains and consumption patterns.

However, there are also opportunities for expanding and diversifying the cereals export market, such as the growing demand from emerging economies, especially in Asia and Africa, the development of new varieties and technologies that can improve productivity and resilience, the promotion of regional integration and cooperation among trading partners, and the adoption of sustainable practices that can reduce environmental impacts and enhance social benefits.

References:

http://www.fao.org/faostat/en/#data/TP

Cereals statistics – Agriculture and rural development

Cereals; millet exports by country |2019 – World Bank

https://oec.world/en/profile/hs/cereals
http://www.fao.org/3/i9542en/I9542EN.pdf