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Andrea Segrè
Dipartimento di Economia e Ingegneria Agrarie, Sezione di
Economia e Politicria Agrarie, Sezione di
Economia e Politica Agraria, Università degli Studi di
Bologna, via. Filippo Re 10, 40126 Bologna, Italy
With the contribution of Fabio Lunati and Andrea Brandani,
Nomisma, Bologna, and CECOB, Bologna.
Keywords: developing countries, vegetables, fruits,
production, consumption, marketing, trade
Since 1985 horticultural produce and commodities have been evincing
increasing importance in developing countries, which have increased
their overall share of world production and now have fruits and
vegetables making up a large proportion of their exports. Future
growth will likely depend on rising and changes in demand in both
developed and developing countries and on the capability of emerging
economies to maintain or increase their competitive strength in
world markets. The implementation of the Uruguay Agreement will
impact on trade volumes and trade flows particularly through such
general areas as market access, tarification, limits on export
subsidies, cuts in domestic supports, phytosanitary measures and
safeguard clauses. The brief of the present study is to gain a
better understanding of the economic significance of, and outlook
for, production, consumption, imports and exports of fruits and
vegetables, and key issues related thereto, in developing countries.
In recent years analysts have been taking a much closer look at the horticultural sector of developing countries, especially in regard to its potential contribution to income generation and export earnings (OECD, 1996; Islam, 1990). The literature is full of specific studies on selected horticultural produce/countries (Segrè et al., 1997), although little research has been done to arrive at a comprehensive analysis of production, consumption and trade. One factor explaining the lack of such a comparative approach is the limited range of available data.
On the strength of a homogeneous FAO-derived worldwide database
(World Tables of Fruits and Vegetables Development, WTF&VD)
specifically worked up for its brief, the present paper adds to
this small fund of knowledge so that a better understanding of
the economic significance of and outlook for production, consumption,
imports and exports of fruits and vegetables (excluding such products
as cut flowers, foliage, potted plants, and nursery materials)
in developing countries can be achieved. The data reported in
the following pages cover 61 products over the period 1985-1996
for 168 countries. The following sections also summarize certain
findings that were part of a wider analysis conducted in the framework
of the WCHR-Working Group 1. The complete information set, including
a widely cast bibliographic net, can be found
a widely cast bibliographic net, can be found in the working document
by Segrè et al. (1997), while the summary tables of the
database are now on the WCHR Web Site (http://wchr.agrsci.unibo.it)
(Segrè et al., 1998) and the country-by-country and product-by-product
dataset will be available upon request to the author.
The present study combines statistical and economic analyses. The former is performed by the WTF&VD. These tables, derived from the FAO database, cover the time period 1985-1996 and consider some 228 countries arranged in 17 country groupings. Only the aggregate "Developing Countries" (hereinafter DCs) is considered here, which enumerates nine country groupings: 1. North Africa, 2. Sub-Saharan Africa, 3. Central America and Caribbean, 4. South America, 5. China, 6. Near East in Asia, 7. East and South-East Asia, 8. South Asia, 9. Oceania Developing. Within each one three product groups are examined-vegetables, fresh fruits and other fruits-and for each such group in turn the following indicators are reported: production, imports and exports (in volume and value). Five-year averages, annual growth rates and shares were than calculated, and total and per capita (apparent) consumption and a standardized trade balance index were derived. It should be noted that in the WTF&VD all these figures are available also at comp;VD all these figures are available also at country and product levels.
These data were then used to apply an economic
model known in the literature as portfolio analysis (Valdani,
1992), which by crossing growth rates, market shares and averages
of production, exports and imports focuses on the dynamics of
competitiveness in fruits and vegetables between the chosen countries/country
groupings. The results of past trends and salient characteristics
of fruit and vegetables in DCs, as based on the aggregate data
supra, raise a number of issues and questions-strengths,
weaknesses and advantages for production and trade, possible impact
of the general trend towards trade liberalization, implication
of export competition, and the like. The statistical and economic
analyses are therefore complemented with more detailed examinations
of specific related issues, especially experiences of an individual
country/product in the area under investigation. Concluding remarks
and future prospects are reported in the final section infra.
This section reports the main findings
of the statistical and economic analyses. For reasons of space,
only the main aggregates are considered, i.e. vegetables and fresh
fruits and country groupings. Some comparisons with the aggreand country groupings. Some comparisons with the aggregate
"World" (developing countries plus 8 areas of developed
countries) are also presented for comparison. Comments on the
trends and related issues are kept to the essential. Tables and
figures are selected. More details can be found in Segrè
et al. (1997, 1998).
DCs account for 72% of world-wide vegetable production (1996) (Table 1). Over the time period 1986-95 production increased, on average, at a growth rate of 4.11%, a faster pace than the 2.11% world trend. Total production surged from 263 million metric tonnes (MMT) in 1986-90 to 327 MMT in 1991-95. All nine examined areas showed a positive trend, although the 6.6% growth rate for China was much higher than that for the other country groupings. By 1996 China accounted for more than 48% of the total vegetable production in DCs, a more than 10% rise from its 38% in 1986. South Asia was by 1996 the second leading producer at 19.4% of total vegetable output, followed by the Near East (8.48%) and East and South-East Asia (9.14%).
Figure 1 confirms, from another angle, the
remarkable growth of vegetable produce in DCs. Of particular note
here is the importance of China's top ranking in this cere is the importance of China's top ranking in this context
and the impact it now has on the world horticultural sector as
supplier, especially in the light of China's limits in storing
and processing its domestic production. Among the other DCs, the
developing vegetable production raises two priority issues, one
related to income generation and the other to introduction of
new types of vegetables.
The evolution of vegetable production has an important economic significance in this area as output is relatively labor and capital intensive and vegetable growing by farmers is consequently dependent upon whether returns can at least cover production outlays. The role of vegetables in income generation is best illustrated through country examples.
In Vietnam much of the increased demand for fresh vegetables from the urban population, particularly for the more perishable species, is being met by peri-urban production, which has significantly increased since the change from a centrally planned economy with collective systems to a market-orientated one. Vegetables provide about $650 value added (returns to labor, land and management) per farm yearly for peri-urban vegetable farmers. Value Added per hectare daily of vegetables is twice or more than the above figure for rice, providing employment for five or ove figure for rice, providing employment for five or more times the number of workers despite very high labor use in rice (Jansen, 1996).
Guatemala provides a similar example. Vegetable production may be a promising option for meeting the two national goals of crop diversification and expansion of non-traditional agricultural exports because of rising foreign demand. Targeted to the smallholder sector, such production creates opportunities for labor-absorbing production techniques, although it also exposes farmers to greater risks related to market uncertainties. Production of export crops by small-holder farms in Guatemala appears to have had a positive effect on household income and food security, particularly for the smallest farms. Production of export vegetables increased on-farm employment, reducing the need to rely on uncertain off-farm employment in local and distant labor markets for additional income. New employment opportunities were also created for non-cooperative-member households. Disparities in income levels were also reduced (Von Braun, 1994).
Also in Malawi a wide range of exotic and indigenous vegetables are grown that play a critical role in the nutrition of the people by providing essential minerals and vitamins and generate some income for small-holders. This has prompted the Ministry of Agriculture more vigorously to pursue research, extension and personnel y to pursue research, extension and personnel training in vegetable production (Mkamanga, 1990).
Another interesting example is in the North
Indian state of Himachal Pradesh, where returns from vegetable
growing are quite high and could be much higher if the package
of recommended practices is adopted. Increases in vegetable acreage
on small and marginal farms will not only provide gainful employment
for under-utilized family labor but would also reduce income disparity
among farms of differing sizes (Bathi, 1993).
The future of the vegetable industry in DCs will necessarily depend on improving people's standard of living as well as on the increasing, and more sophisticated, demand of consumers in large towns and cities for produce enhancement in terms of color, taste, smell and shape. The new types of produce these countries, and China in particular, want to develop or to introduce from foreign countries are spicy vegetables, vegetable powder and convenience vegetables.
The demand for spicy vegetables depends on the fact that many people have become tired of mediocre delicacies but pungent spicy foods seem to be well-received all the time. Some food specialists believe that this type of produce can help dissolve fat and reduce its sediment in human tissues. Spicy foods are also said to be cancer-r human tissues. Spicy foods are also said to be cancer-resistant. Most vegetables can be reduced to powder after they are washed clean, the usual method being to pulverize, sterilize, dehydrate, dry and package (in plastic bags) them. The powder can be added to fermented dough before being processed into vegetable biscuits or noodles. It could also be made into instant vegetable soup, especially catering to the needs of those children or infants who dislike fresh vegetables. According to some food specialists, these vegetables show rosy prospects in sales and have become so popular in some big cities in the past two years that supply has fallen short of demand (USDA, 1998).
Packaged vegetables with a registered trade
mark are growing quickly. The appearance of this type of produce
in the marketplace indicates that many DCs will industrialize
the mass production and processing of vegetables and establish
a number of domestic and global name brands of their own. These
products are thought to have a very bright future in the coming
21st century.
In 1996 DCs represented some 72% of World fresh fruit production (Table 2). As with vegetables, China registered the fastest growth rate (7.61%) for fresh fruit production in all DCs, wherte (7.61%) for fresh fruit production in all DCs, where the average growth rate over the period 1986-95 was 3.25% (World: 1.46%). Production climbed from 253 MT in 1986-90 to 302 MT in 1991-95.
Together with South America, China also garnered the largest market share with one-fifth (1996) of total fresh fruit production, the remainder being equally distributed in the other country groupings. Figure 2 shows that China has a potential very similar to South America's, but with a much higher growth rate. The difference between the two areas consists in the fact that while South America is export-oriented towards the US and the EU, Chinese production is still earmarked for local consumption.
These trends raise at least two issues-the
importance of the quality and stability of supply (China) and
the role played by agricultural policy reforms (South America).
Fruit supply, in effect, should offer a minimum standard of quality and stability. Buyer surveys have clearly established the importance of quality, reliability of delivery and price as determining factors. Quality elements comprise grade of produce, defects, ingredients, mode of preparation of raw materials for processing, preparation and density of liquerials for processing, preparation and density of liquid medium, additives, drained weight, cleanliness, strength and fill of container and packaging material, and storage conditions to safeguard quality retention.
Although the fruit handling systems and marketing arrangements in DCs have evolved to take account of environmental factors and the lack of appropriate support systems, local marketing of fruit is still a high-risk enterprise. The fruit handling systems for mangoes and bananas clearly show the role of simple technological innovations, such as those designed for heat dissipation, reduction of physical injury or disease control, in reducing risks (Concepcion, 1994).
Infestation by fruit flies (Tephritidae:
Diptera), common in the tropics, is a major constraint to
the production and export of tropical fruits. Current control
procedures include cover sprays of insecticides, spot sprays of
protein baits, orchard sanitation and fruit wrapping, all of which
seek to prevent direct damage to fruits or are aimed at population
suppression, mostly in individual plantations. These field control
techniques enable fruit production of sufficient quality to meet
the needs of domestic consumption as well as that for export to
markets where fruit flies are not quarantine pests. (Vijaysegaran,
1994). It is worth noting that evidence suggests that in the EU
quality standards have bsuggests that in the EU
quality standards have been more systematically applied against
imported products rather than to what is domestically produced
or marketed.
South America has benefited from a number
of land reform measures, as well as from a general agricultural
and fiscal policy encouraging the production and marketing of
fruits for export. The fruit sector of several countries in this
area has expanded. Chile, for instance, has developed this sector
since the introduction of structural reforms in the 1970s aimed
at market liberalization. Fruit exports have increased four- to
five-fold, making Chile a prime example of boom in fruit production
and exports. The development of the country's temperate fruit
industry has been quite impressive-pears, grapes, apples, and
the rapid introduction of new products such as kiwifruit in 1987.
A similar evolution occurred in Argentina when in the 1980s the
government began encouraging producers of cotton, sugar and tobacco
to diversify into fruit and vegetables (OECD, 1996).
Exports of vegetables in DCs increased at an average annual rate
of 4.91% over the period 1986-1995 (very similar to the World
figure of 4.93%), going fro-1995 (very similar to the World
figure of 4.93%), going from 3.6 MMT in 1986 to 5.8 MMT in 1995
when this area originated some 36% of World total vegetable exports
(Table 3). However, data presented in Table 3 show a strong variability
according to the country grouping, i.e. in South America the export
growth rate peaked at 18.71%, while South Asia registered a 1.85%
decline. Central America is the main exporting area (37% of total
exports in 1995), followed by the Near East Asia (18%) and China
(13%). One issue that affects very differently South American
vis à vis Asian countries relates storage and transport
to trade.
The growth in exports indicates that in Central and South America
exporters, processors and producers are quite capable of adopting
technology and finding new export markets. Poor infrastructure,
lack of food standards and grading, and importer concerns about
food safety are constraints which will have to be addressed in
Asian countries. Although these problems can be considered
as a limit to trade development, it is important to underline
that trade liberalization has not developed at the same pace all
over the world, and among the developing countries themselves
the reasons are as much political as economic. A marked number
of Asian DCs are not members of the Worldnumber
of Asian DCs are not members of the World Trade Organization (WTO)
and favor trade isolation. Figure 3 shows how export growth rates
in most of the Asian country groupings are very low when compared
with the corresponding level of production.
On the import side the average growth rate of DCs has climbed to 5.15% (1986-95), going from 2 MMT in 1986 to 3.5 MMT in 1995 (World growth rate was 4.52%). In aggregate terms DCs represented in 1995 22% of World vegetable imports (Table 4). The main importing areas were Near East Asia, with 37% of the DCs total import in 1995, and South Asia (33%).
Figure 4 shows that the growth rate of vegetable
imports is higher in South America with respect to Asian countries,
where, however, import share is more consistent. The highly perishable
nature of vegetables (as of all fruits) and the consequent need
for immediate disposal calls for elaborate marketing arrangements
in the absence of cold storage. South American countries have
developed not only a good level of production but also an efficient
storage and distribution system, and therefore can use raw products
for the processing industry. In developing countries the vegetable
processing industry has also important implications in relation
try has also important implications in relation
to employment.
The processing of vegetables (as of fruits) helps to tackle the considerable potential loss arising from the perishable nature of the produce during times of seasonal glut in the context of low demand, poor infrastructures and weak transport. The reduction in tariff escalation helps to capitalize on off-season demand for high-value fruit in diverse developed country niche markets, enabling horizontal diversification away from traditional agricultural products. At the same time, it allows more value added in the form of further processing and packaging rather than the mere export of raw products, thus opening up in the process possibilities of vertical diversification by generating both rural and urban employment. Greater emphasis on a diversified and healthy diet has brought a substantial increase in the number and variety of fruit and vegetable products available to the consumer, with an ever increasing number of different types being processed and exported thanks to new heating (UHT, microwave, ohmic) and freezing (cryogenic) techniques combined with new packaging materials and technologies (aseptic, modified atmosphere packaging).
With the diminishing capacity of agriculture
to provide employmentinishing capacity of agriculture
to provide employment for ever-increasing surplus labor, the rural
youth have been migrating to urban areas in search of a better
life. The industrialization of rural areas is considered to be
one of the most promising solutions to this problem. This is especially
applicable to industries for the processing and preservation of
fruits and vegetables (Khalil, 1993).
Fresh fruit exports by DCs (52% of World exports
in 1995) grew at an average rate of 4.43% (World 4.32%), going
from 14.2 MMT in 1986 to 18.1 MMT in 1995. Only North Africa showed
a decline over this period (-2.61%). South America and Asian country
groupings registered the most remarkable increases with a growth
rate superior to 5%. In 1995 Central America covered more than
one-third of fruit exports. With the share of South America (37%),
these two country groupings originated some 70% of total exports
by Developing Countries in 1995. Exports of temperate fruit and
demand for tropical fruit products are two important issues affecting
trade, with non-tariff barriers limiting potential imports from
DCs.
(Table 5)
Chile and Argentina are the largest exporters>
Chile and Argentina are the largest exporters of temperate fruits (apple, pear, table grape and kiwi). To obtain favorable prices in export markets and to avoid tariff rates that otherwise could be very high, these countries take advantage of their seasonality, i.e. when their produce can be either early or late. Three types of methods are adopted to achieve this market advantage: cultivate early or late varieties (e.g. Chile harvests the early grape cvs. 'Perlette' and 'Flame' from early December essentially for the US market); adopt management techniques to bring harvest date forward e.g. plastic and hydrogen cynamide for grapes), adopt storage techniques to accelerate or slow the ripening process (e.g. controlled atmosphere, refrigeration and packaging film to slow and spraying ethylene to accelerate the ripening process).
During the last few years, sales by these countries have increased
consistently. However, competition has also increased among them
and with northern hemisphere countries. For instance, both Argentina
and Chile are exporting the greater part of their pears to the
EU, while the extension of the storage period for pears, currently
nine months, has been an element of marked competition between
producers in the northern and those in the southern hemisphere
(OECD, 1996).
Banana, papaya, guropical fruits
Banana, papaya, guava and passion fruit deserve mention. The main banana suppliers are Costa Rica, Ecuador, Brazil, Honduras and India. Passion fruit producers are Ecuador, Brazil, Peru and Kenya. The major suppliers of mango are India, Peru and Ecuador, while guavas originate mainly from South Africa, Malaysia and India. The leading exporters of papaya are India, Peru and Brazil. For tropical fruits as a whole, the EU has been the fastest growing major import market during the decade 1986-96, with consumption more than doubling between 1984 and 1994. These fruits enjoy high income elasticities, i.e. a much higher consumption in proportion to the rise in income. A considerable amount of canned tropical fruit imported into the EU, however, is re-exported to other European markets, a substantial amount going to Central and Eastern Europe. Demand for tropical fruit products has, in recent years, risen on the international market, thus raising the stakes for certain developing country exporters.
Figure 5 shows how most fruit exports derive from Central and
South America because of the overlapping seasonality and marketing
periods between the southern and northern hemispheres (with US
and EU as major markets). However, growth rates of Asian country
groupings are of increasing importance.
In general t3.5.3. Non-tariff barriers
In general there are still non-tariff barriers that are limiting
potential imports from DCs In this respect
considerable importance is being attached to an international
agreement on national sanitary standards and regulations. Maintenance
of human and plant health are primary considerations in tropical
fruit and vegetable-importing countries. The exporters have to
satisfy consumer quality criteria as well as those of the relevant
government agencies. The WTO's Sanitary and PhytoSanitary (SPS)
Agreement (separate from the Agreement on Agriculture) sets and
encourages the adoption of international standards, while at the
same time affirming the rights of countries to set their own health
and safety standards if scientifically justifiable and not likely
to result in an unreasonable barrier to trade.
Imports of fresh fruits in DCs grew at a yearly rate of 7.75%, doubling the amount traded (from 3.3 MMT in 1986 to 6.7 MMT in 1995). The share of DCs in the World aggregate went from 14% in 1985 to 16% in 1995. Remarkably, North Africa showed a 25.7% increase of imports, although the imports of this area account for only 1% (1995) of the total fresh fruit imports by DCs (Table 6). Main importers of fresh fruit were the Nea6). Main importers of fresh fruit were the Near East Asia (34% of total 1995 imports) and East and South East Asia (29%) countries. It should also be noted that China is increasing its imports of fresh fruits (13% annual growth rate) and its share has grown from 3% in 1985 to 7% in 1995.
Figure 6 highlights the growth of imports by North Africa, where the climatic conditions of most countries are not conducive to fruit production. In Sub-Saharan Africa and South Asia the growth rate of imports is much lower because the capacity for self-production is higher. The relatively low growth rate in Asian countries is related to the high tariff duties on fruits.
The growth rates of imports by the various country groupings investigated
are generally rather concentrated. This indicates that very differentiated
production conditions are accompanied by similar trade situations,
i.e. guarded opening to international trade. Until recently, most
imports in South East Asia were channeled via Hong Kong, one of
the area's few WTO member-countries.
While China is a big importer of fresh fruit, official Chinese
trade statistics vastly underestimate actual imports of fresh
fruit as well as of many other commodities. Unrecorded shipments,
rampant under-invoicing, misdeclaration of products, and other
imponvoicing, misdeclaration of products, and other
importation practices make Chinese trade statistics an inadequate
indicator of real trade value and volume. Hong Kong's re-export
statistics also reveal parts of China's import situation and usually
are more accurate. Hong Kong re-exports are imports that transit
the territory on their way to other countries, including China.
As an indication of Chinese customs undercounting of fresh fruit
imports, Hong Kong re-export statistics show much higher apple,
grape, and orange trade volumes and values than the official Chinese
data. In China and in many Asian countries most imported fresh
fruit enters through "unofficial channels", because
of phytosanitary restrictions and high tariffs. Under-invoicing
and misdeclaration of product are two of the most common unofficial
importation practices. As an example of misdeclaration, traders
will sometimes declare table grapes or plums-prohibited by a phytosanitary
barrier-as apples, which can be legally imported (USDA, 1998).
Per capita apparent consumption of vegetables
showed a 0.92% increase over the period 1986-95, despite the growth
rate decline in Africa and Central America. Apparent consumption
went from 68.7 kg per capita in 1986 to 75.3 kg in 1995 on average
(Table 7). The highest consumption was registered in China The highest consumption was registered in China, where
apparent per capita consumption jumped from 86 kg in 1986 to 146
kg in 1995 (a 5.38% growth rate). The lowest (and more stable)
figure was registered by Sub-Saharan Africa (29 kg of vegetables
consumed both in 1986 and in 1995).
New trends in vegetable products for consumers in the DCs refers to people's standard of living. Generally speaking, fresh vegetables should lose market share to processed products. Many kinds of vegetables can be made into canned foods that cater to local tastes, cucumbers and peppers being but two examples. Easy to carry and convenient to serve, they can be stored for quite a long time and reduce losses incurred from seasonal supply surpluses of vegetables marketed at the same time of the year. At present the highest consumption has been registered by China, where three different kinds of vegetable should develop over the next few years-vegetable crisps, enriched vegetables and vegetable chips. Under vacuum-packaging at low temperature, radishes, melons and potatoes can be dehydrated and fried in edible oil into crisps. As they are processed in a low ambient temperature, which also reduced the loss of aromatic substances in their natural pigments, they can usually keep all their original flavors. They are regarded as a nall their original flavors. They are regarded as a new generation of food products upgraded to substitute the traditional fried and sponge foods (USDA, 1998).
On the other hand quite a number of scientists
are doing research on so-called enriched vegetables, which contain
many different nutrients. By means of conventional agricultural
techniques, a certain number of trace elements can be dripped
or sprayed onto the roots or leaves of vegetables to enhance them
with the nutrients they lack. So far, Shanghai has developed a
kind of vegetable called selenium cabbage.
Per capita apparent consumption of fresh fruit
has been relatively stable, with a growth rate of 0.38% (1986-95).
Again, China has registered the highest growth rate (6.43%), while
African and Near East Asian countries have shown a decrease (Table
8). It should be noted, however, that in China consumption is
comparatively lower (54 kg per capita in 1995) with respect to
the other areas, e.g. in Near East Asian countries apparent per
capita consumption is three times higher. Apparent consumption
went from 107.96 kg per capita in 1986 to 109.35 kg in 1995 on
average.
3.8.1. Chinese consumer trends
It must be assumed that the growth in per
capita consumption in the DCs is the result of China's marked
increase. According to trade sources, Chinese consumers buy most
of their fresh fruit at street retail shops and wet markets, i.e.
approximately 95% of imported fresh fruit purchases are made at
these locations. US and European fresh fruit has won brand-name
recognition by China's consumers, especially Red Delicious apples,
Sunkist® oranges and Red Globe® table grapes. Sunkist
is one of the few overseas fresh fruit brands that consumers recognize.
As an indication of its high level of local recognition, its packaging
design has been imitated by a Chinese company with the intent
to deceive local consumers. With the recent explosion in the number
of supermarkets and hypermarkets, imported fresh fruit has begun
to appear on retail shelves. While the amounts are still limited
in comparison to those of the street stalls and wet markets, they
could rise rapidly in the future (USDA, 1998).
It should be noted in general that food demand
in the DCs is projected to grow rapidly in the medium term due
to a combination of factors-fast population growth, continuing
rural migration to major urban centers and improved diets. Higher
per capita income in these countred diets. Higher
per capita income in these countries will provide impetus for
a better and more varied diet, including to some extent fruits.
Demand for fruit is generally very price elastic, thus final consumption
is very much determined by the price, the quality and the disposable
income of the consumer. (OECD, 1996, 1998).
The total value of vegetable exports by DCs was US $3 billion in 1995 (28% of World aggregate), almost 50% of which originated in South America and 14% in China (Table 9). The 1995 vegetable imports by DCs (Table 10) had a total value of US $1:4 billion (12% World aggregate), most of which originated from Asian countries (71%). The share of the East and South East Asian countries increased from 32% in 1985 to 42% in 1995, while the Near East in Asia registered an opposite trend, declining from 42% to 29% of total vegetable exports.
For vegetables the 1995 standardized trade
balance (Table 11), an index showing the propensity of a given
area towards importing (0 ÷ -1) or exporting (0 ÷ +1)
a certain commodity (or commodity group), was close to 1 in North
Africa (0.96), China (0 was close to 1 in North
Africa (0.96), China (0.91) and Central America (0.89). Asian
countries, although registering a negative standardized trade
balance, over the same period of showed a tendency towards a decreasing
import propensity, i.e. Near East Asia went from -0.36 in 1985
to -0.08 in 1995.
More than one-third of World fresh fruit exports originated in DCs (Table 12), although over the long term their share decreased from 43% in 1995 to 37% in 1995. South America is the main exporting area (33% of total DC exports in 1995) followed by Central America and the Caribbean (27%).
In 1995 DCs accounted for some 17% of World fresh fruit imports (Table 13), an increased share with respect to the beginning of the observation period (14% in 1985). In 1995 the main importers were Asian countries, which accounted for more than 60% of the total imports, and South America (17%).
Central America showed in 1995 the highest
standardized trade index (0.82) in fresh fruits (Table 14), followed
by African countries (0.64 in North Africa and 0.50 in Sub-Saharan
Africa) and South America and 0.50 in Sub-Saharan
Africa) and South America (0.37). China registered instead a negative
1995 index (-0.15), its import propensity also declining with
respect to the previous decade when the trade index was at -0.59
(1985).
Over the past decade increased trade volumes of fruit and vegetables, together with significant changes in trade flows, have been indicative of a general increase in consumption and a greater demand for imports, with a corresponding general rise in production. Linked to these aggregate trends has been a variety of shifts in demand, production and trade flows both within and between Developing and Developed Countries.
A limited number of DC country groupings dominates production and trade. There is competition between them and their relative shares of world production and trade shifted from time to time. The limited number of competitive country groupings can be explained in part by the agro-ecological characteristics of the areas under investigation and in part by the sum of factors comprising the cost of production, processing, marketing, availability of appropriate technologies and infrastructure, product standards and technical regulations. The constraints to increasing horticultural exports from India, for instance, include poor postharvest management, inadequate cold storage and prpostharvest management, inadequate cold storage and processing facilities, high import duties on packing materials, underdeveloped market infrastructure, inadequate market information services, low levels of productivity and fragmented holdings (Subrahmanyam, 1994).
No less important are entry obstacles to export markets resulting from the specialized nature of the export-related infrastructure, including quality and health standards, as well as established consumer preferences for specific products in particular markets.
During the period under investigation, trade volumes were stimulated by a general trend towards liberalization as well as an extension of trading blocs. The general expansion in the demand and trade of fruit and vegetables has been accompanied by a greater internationalization of trade due to a greater number of importing countries as well as supplier countries engaged in international trade, which in turn has led to an evolution of trade flows. In many cases trade that was formerly local or bilaterally oriented is now much more international, which has intensified the trading contacts between Developing and Developed countries. The greater participation of the former in this trade evolution, both in the role of supplier and consumer, is thus considered to be a major development of the past decade in world fruit and vegetable production and trade. Strong growth of exports has occurrend trade. Strong growth of exports has occurred in the traditional exporting area of South and Central America (in particular Chile and Argentina but also Brazil and Mexico). This trend is expected to continue in the medium term. Significant growth in exports has occurred and is expected to continue in Asia (especially China and India).
During the period under review, the Asian region has been the area of stronger growth, which, given generally rising per capita disposable incomes and the vast potential of the Chinese market, should continue as a major growth market.
Apart from China, the wave of development is the result of the fast pace at which the so-called tiger economies of South East Asia have grown during the last decade. With a population of about 600 million, excluding China and India, this part of the hemisphere is ideal for the fruit and vegetable business from the quantitative point of view. Since the early eighties the countries of the region have passed through an unprecedented boom with 15-20% annual growth rate, stable currency and low wages. Unfortunately some countries have run up a great deal of currency debts and the boom has been followed by a heavy downturn. This does not mean that the area is no longer of interest for worldwide trade but certainly in the near future trade will suffer the lack of purchasing power in the most important countries of the area. This is a market which rematries of the area. This is a market which remains of great interest for mass-consumer goods like fruit and vegetables.
This trend is expected to accelerate both in the short and in the medium term as a result of the Uruguay Round Agreement, which will provide (a) increased market accession, (b) reduce subsidized export and aggregate levels of support, and clearer and more detailed rights and obligations for (c) food safety and phytosanitary regulations. Although at this stage it is too early to estimate the URA's impact on fruit and vegetable developments, and actually this will vary according to the country and to the product concerned, it is evident that these three elements will stimulate the trade environment.
The further extension of trading blocs such as the North American Free Trade Agreement (Nafta) linking Canada, Mexico and the United States, various association agreements in Central and South America: the Central American Common Market, the Andean Pact, the Caribbean Community and Mercosur, the Association of Southeast Nations (Asean: Indonesia, Philippines, Singapore, Thailand, Brunei), and the Lomé Convention between the European Union and the ACP countries are likely to provide additional opportunities for increased trade.
Future prospects of the fruit and vegetable
exports of DCs will also largely depend on the growth of import
demand, mostly in the developed countries. Dort
demand, mostly in the developed countries. Developed countries
are expected to diversify their food consumption patterns, including
consumption of horticultural products. This heightened concern
with health and nutrition and familiarity with more fruits and
vegetables because of wider availability, increased travel and
improved communications will lead to an increase in the ratio
of imports to domestic products in total demand. Differences in
per capita consumption of fruits and vegetables among developed
countries with similar patterns and standards of living may also
indicate a potential for increases in import-oriented consumption
in countries where consumption is relatively low at present.
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