THE EU IS THE WORLD´S TOP IMPORTER OF AGRICULTURAL PRODUCTS AND THE SECOND LEADING EXPORTER

The latest MAP (Monitoring Agri-Trade Policy) looks at developments in trade over the past year, focusing in particular on the EU and how it has performed compared to other world players. World agricultural trade reached an all-time high, at least 12% (expressed in Euros) above the previous record set in 2008. The impact of the economic crisis led to a contraction of 6% in global agricultural exports in 2009 but they rebounded by nearly 20 % last year.

According to the WTO (World Trade organization), global trade in goods and services expanded by 14.5% in 2010, after the slump of 12% in 2009. Agriculture trade fared rather better. The downturn in agricultural trade was less severe, contracting by 6% in 2009. Furthermore it has bounced back even more strongly than general trade, by almost 20% in 2010, to reach an all-time high, at least 12% above the previous record set in 2008.

The year 2010 saw the EU back on track, reaching a record level of exports, thanks to 21% growth. This reverses the 8% decline of 2009, after five years of consecutive growth. The strengthening of the EU market, consistent with economic growth, is witnessed by the 9% rise in imports in 2010, though it is still 5% bellow the peak of 2008. The resulting improvement in the EU´s trade balance turned it into a net exporter in 2010, for the first time since 2006, with a €6 billion agricultural trade surplus.

This is largely due to expansion in the value of exports, driven by strong demand for final products, as the EU´s key trading partners come out of recession as well as high prices for commodities and intermediate goods. Exchange rate fluctuations may have contributed to the upsurge in exports, given the continued weakening of the Euro against a number of currencies in 2010. Other factors such as the restrictions on cereals exports by Russia and Ukraine also played a role.

The EU is the world´s top importer with import worth €83 billion in 2008-10, well ahead of US with €65 biilion. China´s meteoric growth in imports means that it surpasses Japan as the third largest importer. Russia´s imports also rebounded strongly by 25% in 2010, amking it the 5th biggest importer last year.

The EU specializes in export of final products. The previous chart shows the 15 top agricultural exports including pigmeat in the 7th position. EU exports bounced back by 21% (€16 billion) in value in 2010 compared to 2009, with growth widespread across destinations and products.

 

 

Strong increases were recorded in the volume of exports of frozen pigmeat (up 30% from 0.3 to 1 million tones to Japan and Russia) so frozen pigmeat is in the 4th position of the top 12 products contributing most to the improvement in the EU’s trade balance in 2010. Together these products account for 73% of the change in trade balance.

The EU is not the only major player to see trade rebounding. The US reached a record agricultural trade surplus of €27 billion with the value of exports up by 24% to an all time high. Brazil also saw record exports and growth of 23% despite the strengthening of the Real against the US dollar, potentially damaging its competitiveness on global markets. The recovery of the markets of some major importers is witnessed by the sharp growth in imports; Russia´s imports rebounded by 26%, despite continued market access restrictions for poultrymeat while China´s imports surged by 47%. The prosperity of overseas is a key factor in determining opportunities for EU business. Trade growth now appears to be back on track after the exceptional decreases in 2009.