Three major trends have characterised agricultural and fisheries trade over the past decade.
First, there has been a shift in import and export patterns, with poorer developing countries becoming large net importers and emerging economies becoming large net exporters, reducing the role of developed countries in those markets.
From the 1970s rapid population growth in developing countries and the availability of cheap staple food encouraged a reliance on imports, particularly among the least developed nations. This trend is expected to continue until 2050, while emerging economies such as Brazil, Thailand and Indonesia, as well as export-oriented economies in Asia and Eastern Europe, continue to grow their export capabilities.
Second, trade in agricultural commodities is high, but less than it would have been due to protectionist policies.
Third, there has been development of regional and preferential trade agreements, which seem to be preferred to multilateral co-operation.
The old trade order is changing. As an example, the latest figures from the US Department of Agriculture show that Brazil is poised to become the largest corn exporter in the world, knocking the United States off the top spot.
Partly, this is a consequence of the record-breaking drought the US is currently experiencing, which drove up corn prices in the country last year, but also Brazil seems set for a bumper harvest. Brazilian farmers took advantage of higher corn prices by planting more in 2012 and good growing conditions suggest there will be a healthy crop.
Lower corn demand from Brazil’s domestic poultry sector has freed up more corn for export, while the early export of soybeans last year means there is more transport available to export corn. Brazil has exported nearly 14 million tons since October 2012, more than double US shipments over the same period.
Similar shifts in trading patterns are happening in other commodity markets. New exporters from Eastern Europe and Central Asia have transformed the grain market. Wheat exports from the Commonwealth of Independent States (CIS), including Russia, Tajikistan, Turkmenistan, Uzbekistan and Ukraine, have gone from virtually zero in the early-1990s to about 20 per cent of world markets in 2011. This is expected to increase significantly over the next decade.
Trade in fisheries products has also increased considerably. According to the United Nations Food and Agriculture Organization, almost 40 per cent of all fish, caught or farmed, is internationally traded and fast-growing economies, such as China, Thailand and Vietnam, have become large exporters.
Shifts are taking place too in the meat sector. India’s beef exports are forecast to rise 29 per cent to a record of 2.16 million tons this year, which is nearly a quarter of world trade. Three years ago, it accounted for just 8 per cent worldwide. The sector’s rapid growth is being driven by demand for low-cost products in many smaller emerging and price-sensitive markets in the Middle East, Africa and South-East Asia, as well as India’s ability to provide halal products.
As India’s beef exports rise, the world’s largest beef producer, the US, is set to see exports drop by 4 per cent to 11.3 million tons this year, while imports are forecast to rise by 11 per cent to nearly 1.2 million tons.
In the EU production is forecast to fall 1 per cent to 7.7 million tons, despite increased efficiency, due to increasing feedstock costs and reductions in subsidies.
As emerging economies develop better technology and favourable competitive conditions they produce not only enough to satisfy domestic needs, but also to export food to the growing populations of the least developed nations that rely on imports for staples. For the established economies, which for years have maintained dominant positions in agricultural export markets, tough times lie ahead.