The global agricultural products market reached a value of just over $2.2 trillion in 2015, with Asia-Pacific accounting for well over half of the world's agricultural production, with 64.2% of the total market in 2015, says research firm MarketLine.
China continues to be the dominant country in the agricultural products market, despite shrinking overall in value terms in 2015. In China, the market was worth approximately $830 billion in 2015 and is expected to grow by 11.2% through to 2020.
MarketLine's latest report states that the production of cereal crops continues to be the strongest segment and accounts for 32.1% of all agricultural products globally.
Chris Bertenshaw, Analyst for MarketLine, says: "Prices have been particularly unstable in recent years and this volatility has contributed to some declines in the value of the market. However, volumes have grown steadily, suggesting that global production and demand is unaffected, and the signs suggest that the market will produce more stable growth in value through to 2020."
The report also says that in particular China has reached a point where its agricultural growth is becoming a less crucial area of its individual economy and is beginning to drop out of its pattern of very high growth, which we have seen in previous years. While China is still enormously important as a global producer and remains the leading market currently due to its sheer size, it may be a less reliable source of growth in comparison with countries like India, which offer more potential for efficiency improvements in overall yields.
“Further industry issues revolve around government intervention in certain key markets,” adds Bertenshaw. “For instance, India and the US heavily subsidize key crop production for their domestic consumption, which can drive down the global price when domestic needs are catered for and there is an overflow into world markets.
“Also, spoilage continues to be a key issue in the market, as predicting yield sizes and therefore storage needs is very difficult, and a great deal of product can be spoiled in storage even before it hits transit.”
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