The future of food trade



Shanella Rajanayagam | Research Department of HSBC

Emerging markets drive demand; technology is transforming trade.

Global trade in food has more than tripled in value since 2000 to USD3 trillion, driven by strong economic expansion and population growth in emerging markets. China, a net exporter of food products until the millennium, is now second only to Japan as a net importer.

Brazil, Indonesia and India have become major agricultural exporters while the US and Europe have seen their share of global food exports fall.

Developed countries agreed to cut their maximum agricultural tariffs by an average of 36 per cent between 1995 and 2000, yet agriculture remains one of the most protected industries in international trade.

Not only do some countries still levy high and complex duties, some impose other measures such as labelling and product certification requirements, or strict biosecurity rules and food-safety standards that can restrict trade.

Current trade disputes and rising protectionism risk harming global food trade. China, the EU, Canada, Mexico and Turkey were among countries imposing retaliatory tariffs last year on more than 800 US food products worth USD26.9bn.

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