The Hindu Business Line : N. America, Europe lead in organic food production

THOUGH the organic food production continues to rise across the world, sales are mainly confined to North America and the European Union, which account for 97 per cent of the total revenues, while the rest of the world accounts for a mere three per cent of it.

Worldwide sales were estimated to have expanded by seven to nine per cent to reach $25 billion in 2003. Production and demand for organic products is also increasing significantly in Australasia and Latin America. Western Europe overtook North America to turn the largest market for organic food and drink in 2003, according to a study on `Global market for organic food and drink'.

The European market for organic products was valued at $13 billion last year, which was $10.5 billion in the previous year i.e., 51 per cent of global trade.

The UK market reported the highest growth in monetary terms, reaching $1.82 billion in 2003. It is the third largest in the world and expanded by about ten per cent in 2003.

The German market was valued at $3.78 billion and sales growth was estimated at three per cent. The French and Italian markets are the next largest in Europe, both valued at about $1.5 billion. Whilst the French market continued to show a healthy growth of about eight per cent, the Italian market reported much lower growth of about zero to two per cent.

In terms of per capita consumption, the most important markets are Switzerland, Denmark, Sweden and Austria. Consumers spend over $50 per capita on organic foods in these Nordic and Alpine countries.

Ten new member countries have joined the EU in May 2004.

The North American market for organic products continues to expand at a rapid rate. Sales of organic foods were estimated at $11.4 billion in 2003.

High growth is witnessed in the US and Canada as consumer interest strengthens and organic products become more widely available in the retail trade.

Most growth is being observed in the US where product categories like organic meat are showing growth in excess of 30 per cent per annum. There is also very high demand for organic dairy products. The high growth of the American organic food industry has attracted a number of new entrants with large food corporations such as Kraft Foods, Pepsi-Cola, Dean Foods and Danone into the market.

Although home to about 60 per cent of the world population, Asia has a small market for organic products. It is, however, becoming a large producer of organic foods with many countries reporting significant increases in production. The Asian market for organic products was valued at about $480 million in 2003.

Japan has the largest market for organic food & drink in the region. The Japanese market was previously estimated at above $3 billion.

China, which has the largest area under organic farming, is showing a large rise in sales of organic foods because of tangible increase in production.

Demand for organic products in the rest of Asia is largely confined to the most affluent countries, notably South Korea, Hong Kong, Taiwan, Singapore and Malaysia.

The Australasian continent comprises almost a half of global organic farmland. Sales of organic food and drink were estimated at about $240 million in 2003 and are estimated to be expanding by about 15 per cent per annum.

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