The Hindu Business Line : Agri market expansion shifting to Asia

Together with Brazil, two Asian giants China and India are poised to become the movers and shakers of the world agricultural commodities market and their economic development will be keenly watched. Although global production is projected to expand steadily over the next 10 years, the potential for market expansion is clearly shifting to developing countries.

The tendency of shifting market expansion is expected to accelerate over the coming decade driven primarily by investments in production capacity and infrastructure, particularly for bulk agricultural products, currently taking place in the developing world and away from the developed world, OECD-FAO Agricultural Outlook 2006-2015 pointed out.

Suggesting that new technologies in tandem with continuing globalisation and integration of the agri-business supply chain will continue to alter trade flows towards more processed products, the report cautioned that the projected growth in agricultural commodity trade is expected to lag its potential due to the persistence of high trade barriers as well as regulatory controls related food safety and environment concerns.

The market prospects over the next 10 years are not without uncertainties.

Weather-related production shocks, energy price trends, investment in biofuel capacity, economic growth prospects and future agricultural policy developments are all factors to be reckoned with.

The report recognises the outcome of Doha Development Agenda of multilateral trade negotiations as a major uncertainty. The least developed countries are likely to face growing import needs for basic food commodities.