7 Reasons Why Vegetable Export is a Lucrative Business

Vegetable export is a lucrative business that can generate high profits for farmers and traders. Vegetable export involves growing, harvesting, packing, transporting, and selling vegetables to foreign markets. In this article, we will explore the benefits of vegetable export and how to overcome the challenges and risks involved.

High demand

One of the main reasons why vegetable export is a profitable venture is the high and growing demand for fresh vegetables in many countries, especially in Europe, where consumers are becoming more health-conscious and prefer organic and exotic products. According to CBI, Europe is a big market for fresh vegetables, with an increasing demand for avocados, blueberries, mangoes and sweet potatoes. These products have a high value and can fetch a good price in the international market. Moreover, the demand for fresh vegetables is also influenced by seasonal factors, such as holidays, festivals, and weather conditions, which create opportunities for vegetable exporters to supply products that are scarce or unavailable in certain markets.

Competitive advantage

Another reason why vegetable export is a lucrative business is the competitive advantage that developing countries can have due to their favourable climate, low labour costs, and diverse production. For example, India is one of the largest producers and exporters of vegetables in the world, with a wide range of crops such as potatoes, onions, tomatoes, okra, eggplant, cabbage, cauliflower, and peas. These crops can be grown throughout the year in different regions of the country, which gives India an edge over other suppliers. Furthermore, developing countries can also benefit from lower production costs, such as labour, land, water, and inputs, which enable them to offer competitive prices in the international market.

Value addition

A third reason why vegetable export is a lucrative business is the value addition that can be created for farmers and traders by increasing the quality, shelf life, and attractiveness of their products. For example, by using proper packaging, grading, labelling, and certification, vegetable exporters can enhance the value and appeal of their products in the international market. Packaging can protect the products from damage, spoilage, and contamination during transportation and storage. Grading can sort the products according to size, shape, color, and quality standards. Labelling can provide information about the product name, origin, weight, date of harvest, expiry date, and nutritional value. Certification can verify the compliance of the products with certain requirements such as organic, fair trade, or Global GAP.

Market access

A fourth reason why vegetable export is a lucrative business is the improved market access that can be achieved by farmers and traders by opening up new opportunities and expanding their customer base. By exporting vegetables to different countries, vegetable exporters can diversify their income sources, reduce their dependence on local markets, and increase their bargaining power. Exporting can also help farmers and traders to access new information, technology, and innovation that can improve their productivity, quality, and efficiency. Exporting can also expose them to new trends, preferences, and demands that can stimulate their creativity, adaptability, and competitiveness.

Government support

A fifth reason why vegetable export is a lucrative business is the government support that can be obtained in terms of policies, incentives, and infrastructure. Many governments encourage vegetable export by providing subsidies, tax exemptions, credit facilities, market information, technical assistance, and quality standards. For example, the U.S. Department of Agriculture (USDA) supports vegetable export through various programs such as the Market Access Program (MAP), the Foreign Market Development (FMD) Program, and the Technical Assistance for Specialty Crops (TASC) Program. These programs help vegetable exporters to promote their products, develop new markets, overcome trade barriers, and meet specific requirements.

Social impact

A sixth reason why vegetable export is a lucrative business is the positive social impact that it can have by creating employment, income, and livelihood opportunities for farmers and traders. Vegetable export can also contribute to food security, nutrition, and environmental sustainability by reducing food waste, increasing crop diversity, and promoting organic farming. Vegetable export can provide employment for millions of people involved in various stages of the value chain, such as production, processing, packing, transportation, and marketing. Vegetable export can also increase income for farmers and traders by enabling them to access higher-value markets and earn better returns. Vegetable export can also improve livelihoods for farmers and traders by enhancing their food security, health, education, and empowerment.

Personal satisfaction

A seventh reason why vegetable export is a lucrative business is the personal satisfaction that it can provide for farmers and traders by giving them a sense of achievement, pride, and recognition. Vegetable export can also offer them a chance to learn new skills, explore new cultures, and build new relationships. Vegetable export can be a rewarding experience for farmers and traders who enjoy the challenge, adventure, and diversity of the international market.

Vegetable export is a lucrative business that can offer many benefits for farmers and traders. However, vegetable export also involves many challenges and risks such as market fluctuations, quality standards, logistics costs, trade barriers, and competition. Therefore, vegetable exporters need to conduct thorough market research, develop effective marketing strategies, establish reliable partnerships, and comply with relevant regulations to succeed in this business.

Global Trends in Vegetable Export

Vegetables are one of the cornerstones of human nutrition, vital for a healthy and balanced diet. They are also an important source of income and trade for many countries. In this blog post, we will explore some of the global trends in vegetable export, based on the latest available statistics.

Top Exporters and Importers of Vegetables

According to the FAO, the value of global vegetable exports (excluding fruit) was USD 192 billion in 2020, 3.7 times increase from 2000. The top three exporters of vegetables in 2020 were China (USD 28 billion), the Netherlands (USD 27 billion), and Mexico (USD 19 billion). Together, they accounted for 38 percent of the total vegetable export value.

The top three importers of vegetables in 2020 were the United States of America (USD 29 billion), Germany (USD 18 billion), and Japan (USD 12 billion). Together, they accounted for 31 percent of the total vegetable import value.

Regional Trade Balances of Vegetables

The FAO also provides data on the net trade balance of vegetables, defined as the value of exports minus the value of imports. The region with the largest net export surplus of vegetables in 2020 was Asia, with USD 33 billion, followed by Africa with USD 5 billion, and Oceania with USD 1 billion.

The region with the largest net import deficit of vegetables in 2020 was Europe, with USD -32 billion, followed by North America with USD -10 billion, and South America with USD -2 billion.

Major Types of Vegetables Traded

The European Commission publishes monthly data on the prices and trade volumes of various types of vegetables. According to their latest report, the most traded type of vegetable in the EU in July 2021 was tomatoes, with a volume of 1.2 million tonnes and a value of EUR 1.1 billion. The second most traded type was onions, with a volume of 0.6 million tonnes and a value of EUR 0.2 billion. The third most traded type was carrots, with a volume of 0.4 million tonnes and a value of EUR 0.1 billion.

The average price of tomatoes in the EU in July 2021 was EUR 0.91 per kg, a 9 percent increase from June 2021 and a 16 percent increase from July 2020. The average price of onions was EUR 0.35 per kg, a 4 percent decrease from June 2021 and a 20 percent decrease from July 2020. The average price of carrots was EUR 0.28 per kg, a 3 percent increase from June 2021 and a 12 percent increase from July 2020.

Vegetable export is a dynamic and diverse sector that reflects the global demand and supply of nutritious and delicious food products. The trends we have discussed show that some countries and regions have a competitive advantage in producing and exporting certain types of vegetables, while others rely on imports to meet their domestic consumption needs. The prices and volumes of vegetable trade also vary depending on the seasonality, quality, and availability of the products.

Reference:

https://www.fao.org/faostat/en/#data/QCL

FAO: Trade: Crops and livestock products

European Commission: Fruit and vegetables (various) statistics

https://www.cbi.eu/market-information/fresh-fruit-vegetables
https://www.ibef.org/exports/fruit-and-vegetables-industry-india.aspx
https://www.agriculture.gov.au/export/from-australia/fresh-produce
https://www.fao.org/3/y5445e/y5445e04.htm
https://www.fas.usda.gov/fresh-fruits-and-vegetables-2020-export-highlights
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