During the second half of the 1990s, a strong and steady growth in the sales of organic foods has provided these products with a viable and sometimes value added market niche. Changes in dietary habits among many segments of the population of developed countries - resulting from increased health awareness and the increasing demand for a wider variety of products, including convenience food - have contributed to this growth. Due to major food scares, which hit many countries in western Europe in the late 1990s and early years of this century, consumers in general have become more critical when purchasing food. Moreover, they have become more demanding regarding information on production and processing aspects (including tracability of the product). The sales of organic horticultural products have been expanding rapidly in many of the major organic markets (e.g. the United States, countries in the European Community and Japan). However, the market share of organic products in total food sales is still small, with shares ranging between one and three percent.
The economies of many developing countries are dependent on the export of a relatively small number of (mostly agricultural) commodities. Several of these commodities (e.g. bananas and sugar) are likely to face further market liberalization pressure in the near future. As a result, diversification of agricultural production is more than ever of utmost importance. Diversification towards high-value crops can help to reduce the vulnerability of many agricultural producers in those countries, especially for resource poor and small scale farmers.
Despite ongoing conversion towards more sustainable farming methods in developed countries and government support to further boost organic production, consumption of organic foods is expected to continue to outgrow domestic production in developed countries, leaving room for significant organic imports, at least in the short- to medium-term and probably beyond. Moreover, tropical and off-season products will continue to provide an attractive potential for which many developing countries have comparative advantages.
Customs and regulatory authorities have not made a distinction between organic and conventional food products, resulting in a lack of reliable information on organic horticultural market development and internationally traded volumes. Decision-makers in the public and private sector in developing countries therefore lack the necessary information on which decisions should be taken concerning conversion towards organic production. The development of demand for organic products, the type of products and anticipated prices are key issues when deciding on conversion.
This publication aims at contributing to filling that information gap. It provides detailed information on organic horticultural market development and global trade in fresh organic fruit and vegetables. The study gives quantitative and qualitative information on the demand in the main developed markets, organic production and import figures. Moreover, it provides case studies of seven developing countries which have established an organic export sector or have the potential to do so. These case studies may provide useful insights on how to establish a successful organic export sector, and also discuss possible difficulties that need to be tackled.
Scope of the study
This study focuses on fresh certified organic fruit and vegetables (both temperate and tropical). For some countries where other organic products (e.g. processed and frozen vegetables) are of significant importance, short sections on these products are included.
Market analysis has been carried out in the following developed markets: Austria, Belgium, Denmark, France, Germany, Italy, Japan, the Netherlands, Sweden, Switzerland, the United Kingdom and the United States of America. Case studies on the (potential) organic export sector in developing countries include: Argentina, Cameroon, Chile, the Dominican Republic, Madagascar, Papua New Guinea and Zambia.
Objective of the study
The main objective of the study is to support developing countries in their efforts to diversify exports through environmentally sound agricultural production methods. The study aims to help key players in the private and public sector in developing countries to make informed decisions on whether to develop exports of organic horticultural products. Moreover, it provides a source of information on the latest market developments and trends that can be useful for a number of individuals and organizations, including importers and retailers, in developed countries. It covers the main issues related to production and marketing of organic horticultural products, including market outlets, logistics, certification and standards.
The specific aims of the study are to:
Organic products are currently not classified separately under the Standard International Trade Classification (SITC) and the Harmonized Commodity Description and Coding System (HS). Both systems group organic products together with conventional products. It is therefore not possible to analyze international trade in organic products using the data provided under these systems.
For this study the following approach was adopted. First, relevant literature, publications and studies were reviewed in order to get in-depth information on organic trade in general and organic horticultural trade in particular. Also country specific information on the organic horticultural sector was reviewed. Second, key players of the organic sector in the studied countries were surveyed through a combination of questionnaires, telephone interviews and face-to-face discussions. Key players include market operators, importers and retailers, among many others. The willingness to respond to the questionnaire and telephone interviews and to provide quantitative information on traded volumes and values, for example, differed significantly between the contacted persons. Finally, the information obtained from market operators was analyzed and processed, and checked against information obtained from literature and other sources.
The reader should keep in mind that the data provided in this publication are estimates, based on information obtained from market sources. The data on prices and price premiums over conventional products should especially be treated with caution. Prices may vary significantly over time, particularly in the case of fresh fruit and vegetables. Therefore, the basic data needed to make reliable projections on market developments and future prices are lacking. Any exporter preparing a business plan should seek more up to date information on prices by contacting importers and other trade and industry sources in the targeted market.