7 Reasons Why Grain Exports Are Vital for the Global Economy

Grain exports are one of the most important sectors of the global agricultural trade. They provide food security, income, and employment for millions of people around the world. In this article, we will explore seven reasons why grain exports are vital for the global economy and how they can contribute to sustainable development.

1. Grain exports feed the world’s population.

According to the Food and Agriculture Organization (FAO), the world’s cereal production in 2020 was estimated at 2.75 billion tons, of which 420 million tons were traded internationally. This means that about 15% of the world’s cereal supply was exported to meet the demand of other countries, especially those with limited arable land or unfavorable climatic conditions. Grain exports help to ensure food availability and affordability for consumers across the globe, as well as to reduce hunger and malnutrition.

2. Grain exports support farmers’ livelihoods.

Grain exports generate income and employment for millions of farmers, especially in developing countries where agriculture is a major source of economic activity. According to the World Bank, agriculture accounts for 26% of the gross domestic product (GDP) and 65% of the employment in low-income countries. Grain exports also create opportunities for value addition, processing, and marketing along the supply chain, which can enhance farmers’ productivity and profitability.

3. Grain exports foster trade and cooperation.

Grain exports facilitate trade and cooperation among countries, regions, and organizations. They promote regional integration, market access, and competitiveness, as well as mutual understanding and trust. Grain exports also contribute to global governance and stability, as they can prevent or resolve conflicts over scarce resources, such as land and water. Moreover, grain exports can support multilateral agreements and initiatives, such as the World Trade Organization (WTO), the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and the African Continental Free Trade Area (AfCFTA).

4. Grain exports stimulate innovation and technology transfer.

Grain exports encourage innovation and technology transfer in the agricultural sector, which can improve crop yields, quality, and resilience. Grain exporters often adopt new technologies, such as biotechnology, precision agriculture, and digital platforms, to meet the standards and preferences of their customers. They also share their knowledge and expertise with other farmers, researchers, and policymakers, which can foster learning and collaboration.

5. Grain exports enhance environmental sustainability.

Grain exports can enhance environmental sustainability by reducing greenhouse gas emissions, conserving biodiversity, and improving soil health. Grain exporters can adopt sustainable practices, such as crop rotation, intercropping, organic farming, and agroforestry, to increase their efficiency and reduce their environmental impact. They can also participate in voluntary schemes, such as certification, labeling, and carbon trading, to demonstrate their commitment to environmental protection and social responsibility.

6. Grain exports boost economic growth and development.

Grain exports boost economic growth and development by increasing incomes, creating jobs, and reducing poverty. According to a study by the International Food Policy Research Institute (IFPRI), a 10% increase in grain exports could raise GDP by 0.6% in exporting countries and by 0.3% in importing countries. The same study also found that a 10% increase in grain exports could lift 8 million people out of poverty in exporting countries and 6 million people in importing countries.

7. Grain exports respond to emerging challenges and opportunities.

Grain exports respond to emerging challenges and opportunities in the global agricultural market, such as climate change, population growth, urbanization, dietary changes, and COVID-19 pandemic. Grain exporters can adapt to changing conditions by diversifying their products, markets, and partners. They can also seize new opportunities by tapping into niche segments, such as organic, gluten-free, or fair-trade grains.

Grain exports are vital for the global economy because they provide food security, income, employment, trade, cooperation, innovation, sustainability, growth, development, and resilience for millions of people around the world. By supporting grain exporters with favorable policies, infrastructure, and finance, we can ensure that they continue to play a key role in advancing global agricultural trade and sustainable development.

Grain exports: a global overview

Grain is one of the most important commodities in the world, providing food, feed, fuel and industrial raw materials for millions of people. According to Statista, the total global grain production in 2022/23 is forecasted to reach about 2.4 billion metric tons, with corn, wheat and rice being the most produced types of grain.

Wheat exports: a competitive market

Wheat is the most widely traded cereal in the world, with an average export volume of about 180 million metric tons per year in the last decade. The main wheat exporters are the Russian Federation, the European Union and the United States of America, accounting for 47 percent of the total exports in 2018. The main wheat importers are Egypt, Indonesia and Turkey, reflecting the high demand for wheat products in these countries. The global wheat market is highly competitive and influenced by factors such as weather conditions, production costs, exchange rates and trade policies.

Corn exports: a concentrated supply

Corn is the second most traded cereal in the world, with an average export volume of about 160 million metric tons per year in the last decade. The main corn exporters are the United States of America, Brazil and Argentina, accounting for 67 percent of the total exports in 2018. The main corn importers are China, Mexico and Japan, reflecting the high demand for animal feed and biofuels in these countries. The global corn market is dominated by a few suppliers who have large production capacities and efficient logistics systems.

Rice exports: a diversified demand

Rice is the third most traded cereal in the world, with an average export volume of about 45 million metric tons per year in the last decade. The main rice exporters are India, Thailand and Viet Nam, accounting for 61 percent of the total exports in 2018. The main rice importers are China, Nigeria and Iran, reflecting the diverse preferences and consumption patterns of rice consumers around the world. The global rice market is characterized by a high degree of segmentation and differentiation, with different varieties, qualities and prices of rice available.

References:

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

https://www.statista.com/statistics/271943/total-world-grain-production-since-2008-2009/

http://www.fao.org/worldfoodsituation/csdb/en/

https://data.worldbank.org/indicator/NV.AGR.TOTL.ZS

https://www.ifpri.org/publication/poverty-reduction-impacts-increasing-agricultural-trade