How 3 Countries Dominate the Global Food Export Market
The global food export market is worth over $1.3 trillion and is constantly evolving. In this article, we will explore how the United States, China, and Brazil have become the world’s biggest food exporters and what challenges they face in the future.
The United States: The Leader in Food Exports
The United States is the world’s largest food exporter, accounting for 17% of global exports in 2018. It exports a wide variety of food products such as soybeans, wheat, corn, meat, dairy, fruits, and nuts. The US has a competitive advantage in food production due to its large and fertile land area, advanced agricultural technology, efficient transportation infrastructure, and strong trade agreements with other countries.
However, the US also faces some challenges in maintaining its leadership position in the global food export market. Some of these challenges include:
Climate change
Extreme weather events such as droughts, floods, wildfires, and storms can damage crops and livestock, reduce yields, and increase costs. According to a report by the US Department of Agriculture (USDA), climate change could reduce the US agricultural output by up to 10% by 2050.
Trade disputes
The US has been involved in several trade disputes with its major trading partners such as China, Mexico, Canada, and the European Union. These disputes have resulted in tariffs, quotas, and other barriers that affect the flow of food exports and imports. For example, the US-China trade war that started in 2018 reduced the US soybean exports to China by 75% in 2019.
Food safety
The US has strict food safety standards and regulations that ensure the quality and safety of its food exports. However, there have been some cases of foodborne illnesses and outbreaks linked to US food products that have tarnished its reputation and caused consumer distrust. For example, in 2020, a salmonella outbreak linked to onions from California sickened over 1,500 people in the US and Canada.
China: The Rising Star in Food Exports
China is the world’s second-largest food exporter, accounting for 12% of global exports in 2018. It mainly exports rice and fruits, but also other products such as fish, vegetables, tea, and spices. China has a huge domestic market for food consumption due to its large population and rising income levels. However, it also has a growing demand for food imports due to its limited arable land, water scarcity, environmental degradation, and changing consumer preferences.
China has been increasing its food production and exports by investing in agricultural modernization, innovation, and diversification. It has also been expanding its trade relations with other countries through initiatives such as the Belt and Road Initiative (BRI) and the Regional Comprehensive Economic Partnership (RCEP). Some of the benefits that China enjoys from its food exports include:
Food security
By exporting food products that have a surplus or low demand in its domestic market, China can earn foreign exchange that can be used to import food products that have a deficit or high demand in its domestic market. This way, China can balance its food supply and demand and ensure its food security.
Economic growth
By exporting food products that have a high value-added or competitive edge in the global market, China can generate income and employment that can boost its economic growth. For example, China is the world’s largest exporter of rice, which is a staple food for many countries in Asia and Africa.
Diplomatic influence
By exporting food products that have a strategic or humanitarian significance to other countries, China can enhance its diplomatic influence and soft power. For example, China is the world’s largest exporter of fruits, which are often used as gifts or donations to other countries.
However, China also faces some challenges in increasing its food exports in the future. Some of these challenges include:
Quality standards
China has been improving its food quality standards and regulations to meet the expectations of its domestic and international consumers. However, there are still some gaps and inconsistencies that affect the credibility and reputation of its food exports. For example, in 2021,a report by Greenpeace revealed that some Chinese rice exports contained high levels of heavy metals such as cadmium and lead.
Market access
China has been facing some barriers and restrictions in accessing some key markets for its food exports due to political or sanitary reasons. For example, in 2020, India banned the import of Chinese apples due to border tensions between the two countries.
Competition
China has been facing increasing competition from other emerging or established food exporters such as Brazil, India, Vietnam, Thailand, and Australia. These countries have been offering similar or better quality products at lower or comparable prices.
Brazil: The Powerhouse of Food Exports
Brazil is the world’s third-largest food exporter, accounting for 9% of global exports in 2018. It exports mainly soybeans, corn, sugar, coffee, meat, and orange juice. Brazil has a natural advantage in food production due to its vast and diverse land area, favorable climate, abundant water resources, and rich biodiversity.
Brazil has been boosting its food production and exports by adopting advanced agricultural practices, technologies, and policies. It has also been strengthening its trade partnerships with other countries through regional and bilateral agreements such as Mercosur and the European Union-Mercosur Free Trade Agreement. Some of the benefits that Brazil gains from its food exports include:
Social development
By exporting food products that have a high social impact or value, Brazil can improve the living standards and well-being of its rural population. For example, Brazil is the world’s largest exporter of coffee, which is a major source of income and employment for millions of small farmers.
Environmental sustainability
By exporting food products that have a low environmental impact or value, Brazil can preserve and protect its natural resources and ecosystems. For example, Brazil is the world’s largest exporter of orange juice, which is produced from oranges grown in sustainable plantations that use less water and pesticides than other crops.
Cultural diversity
By exporting food products that have a high cultural impact or value, Brazil can promote and celebrate its cultural diversity and identity. For example, Brazil is the world’s largest exporter of sugar, which is derived from sugarcane, a crop that has a long history and tradition in Brazil.
However, Brazil also faces some challenges in maintaining its food exports in the future. Some of these challenges include:
Land use
Brazil has been expanding its agricultural land area to increase its food production and exports. However, this has also led to deforestation, land degradation, and biodiversity loss. According to a report by the Food and Agriculture Organization (FAO), Brazil lost 8.5 million hectares of forest land between 2010 and 2020.
Climate change
Brazil has been experiencing more frequent and intense droughts, floods, frosts, and pests that affect its food production and exports. According to a study by the Brazilian Agricultural Research Corporation (Embrapa), climate change could reduce Brazil’s agricultural output by up to 30% by 2050.
Food security
Brazil has been exporting more food than it consumes, resulting in a trade surplus. However, this also means that it has less food available for its domestic consumption, especially for its poor and vulnerable population. According to a report by the Brazilian Institute of Geography and Statistics (IBGE), 10.3% of Brazilians were undernourished in 2019.
The global food export market is dynamic and complex. It involves many factors such as supply and demand, prices and costs, quality and safety, policies and regulations, trade agreements and disputes, climate change and environmental issues, social and economic impacts, cultural and ethical values, among others. The United States, China, and Brazil are the world’s biggest food exporters that have different strengths and weaknesses in their food production and export strategies. They also face different opportunities and challenges in the future as the global food export market changes.
How the Global Food Export Industry is Changing
The global food export industry is constantly changing due to various factors such as population growth, climate change, trade conflicts, and inflation. In this article, we will look at some of the trends and challenges that affect the world’s biggest food exporters and how they are coping with them.
The Top 20 Food Exporting Countries in the World
According to data from World’s Top Exports, the top 20 food exporting countries in the world in 2020 were:
- United States: $134.7 billion (10.25% of globally exported food)
- Netherlands: $101.8 billion (7.74%)
- Germany: $86.9 billion (6.61%)
- Brazil: $85.1 billion (6.47%)
- China: $77.9 billion (5.92%)
- France: $74.8 billion (5.69%)
- Canada: $56 billion (4.26%)
8. Spain: $54 billion (4.11%) - Italy: $52 billion (3.96%)
- Belgium: $46 billion (3.5%)
- India: $38 billion (2.89%)
- Thailand: $36 billion (2.74%)
- Poland: $34 billion (2.59%)
- Indonesia: $33 billion (2.51%)
- Argentina: $32 billion (2.44%)
- Mexico: $31 billion (2.36%)
- United Kingdom: $30 billion (2.28%)
- Australia: $29 billion (2.21%)
- Malaysia: $28 billion (2.13%)
- Turkey: $27 billion (2.06%)
These countries exported a wide variety of food products such as meat, fruits, nuts, cereals, fish, oil seeds, dairy, eggs, honey, and cocoa.
The Impact of Climate Change on Food Exports
One of the major challenges facing the global food export industry is climate change, which affects the production and availability of food crops in different regions of the world.
For example, India, which is one of the world’s largest rice exporters, recently banned rice exports due to severe droughts that have reduced its rice stock by 40%. This ban could deepen a global food crisis as many countries depend on India for their rice supply.
Another example is Brazil, which is now the world’s biggest corn exporter, surpassing the US in 2023 due to favorable weather conditions and increased demand from China and other countries.
Climate change also poses risks for food safety and quality, as higher temperatures and extreme weather events can increase the incidence of pests, diseases, and contaminants in food products.
The Role of Technology and Innovation in Food Exports
To cope with the changing dynamics of the global food export industry, many countries and companies are investing in technology and innovation to improve their food production and trade.
For instance, Bunge Ltd (NYSE: BG), a global agribusiness and food company that operates in over 40 countries, uses hedging to protect itself from the risk of rising commodity prices by locking in a commodity’s worth in advance.
Bunge Ltd also uses digital platforms and tools to enhance its supply chain efficiency and transparency, such as blockchain technology to track and trace its products from farm to fork.
Another example is Walmart (NYSE: WMT), the largest supermarket chain in the US and one of the largest food retailers in the world, which uses artificial intelligence and machine learning to optimize its inventory management and demand forecasting.
Walmart also uses drones and autonomous vehicles to deliver its products to customers faster and cheaper.
The Future of Global Food Export Industry
The global food export industry is expected to grow in the future as the world’s population increases and demand for food diversifies.
However, the industry also faces many uncertainties and challenges due to factors such as climate change, trade conflicts, inflation, consumer preferences, regulations, and competition.
Therefore, countries and companies that can adapt to these changes and leverage technology and innovation to improve their food production and trade will have an edge over their rivals in the global food export market.
References:
http://faostat.fao.org/Portals/_Faostat/documents/pdf/FAOSTAT-Forestry-def-e.pdf
https://www.fao.org/faostat/en/#data/FO/visualize
https://www.fao.org/faostat/en/#data/QCL/visualize
https://data.worldbank.org/indicator/BX.GSR.GNFS.CD?most_recent_value_desc=true
https://1010wcsi.com/hoosier-ag-today/brazil-now-the-worlds-biggest-corn-exporter/
https://largestandbiggest.com/business/which-countries-are-the-largest-exporters-of-food/
https://data.worldbank.org/indicator/NE.EXP.GNFS.CD?locations=IR
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