Developing Economies Drive Global Demand Growth
Commodity crop demand in developing economies is on the rapid rise, fueling a steady improvement in the global crop protection market, which has been growing about 7% per year for the last few years.
BRIC countries specifically have experienced a demand that far outpaces domestic output, which has forced them to rely on more imports. Imports for wheat and corn into BRIC countries has risen from about 190 million tonnes in 2005 to more than 230 million tonnes in 2011, according to Phillips McDougall’s February AgriFutura report.
This demand from BRIC countries and other developing economies – along with favorable crop prices – has fueled sustained growth in the value of the global crop protection industry. Even net importers have bolstered their output, although demand is growing faster than productivity gain in many markets.
Of the BRIC countries, Brazil and India have a trade surplus of total arable products, while Russian and China run a trade deficit of arable goods. Individual commodity crops vary. Brazil, for example, exports more maize, rice and soybeans than it imports, but it runs a trade deficit with wheat. Russia imports more rice and soybeans than it exports, but this trade imbalance is offset somewhat by its major exports of wheat and corn. China imports more corn, rice, soybeans and wheat than it exports, although the value of its rice exports exceeds the value of its imports.
Of the top 10 corn and wheat importing nations, the largest import-rate increases have occurred in Indonesia, Egypt and Algeria since 2007. China has recorded the largest import growth; the world’s No. 18 importer has more than doubled its corn and wheat imports since 2007, helping to further elevate demand and keep prices strong.