An expanding middle class in Asia and other regions is one of several reasons to be optimistic about U.S. potato exports, one analyst believes.
Matthew Tripodi, government and trade relations manager for Euromonitor International, spoke Jan. 7 at an opening session workshop at Potato Expo 2015 on export opportunities for potatoes in what he called the “new global supermarket.” He encouraged growers to think globally.
“The pie is growing, and when the pie grows everybody benefits,” he said after the session. While there is competition from other countries, he said the U.S. is well-positioned to benefit from advances in agricultural trade.
Now at about $1.8 billion, the value of U.S. potato exports is forecast to grow from 5 percent to 10 percent per year through 2025, he said. Nearly three-fourths of that expected growth will come from Asia Pacific countries.
Total world trade in all merchandise has expanded from $2 trillion in 1980 to nearly $20 trillion in 2014, and Tripodi said volume of trade is also increasing.
With 250 global preferential trade agreements in place now compared to only about 70 in 1990, lower tariffs are one reason for the trade expansion, he said. The population of developing countries is continuing to grow, with Asia Pacific, the Middle East and Africa expected to add more than 600 million to their population by 2020. Most of those population gains will occur in urban areas where the U.S. is already a key supplier.
From 2011 to 2020, growth in per-capita income in Asia Pacific countries is expected to climb 54 percent, and he said estimates show that 20 to 30 percent of that income will be spent on food.
“The Asia Pacific (market) represents more than a trillion-dollar opportunity for the food industry,” Tripodi said.
Now at about $1.7 trillion, world agricultural trade has grown by $1 trillion, with growth averaging about $100 billion a year, he said.
U.S. agricultural exports set a record in 2014, topping $144 billion. Through November, U.S. agricultural exports were up 5 percent over a year ago.
About one in three acres is planted for export markets, and Tripodi said about 18 percent of potatoes planted are sold to export markets.
Short-term concerns for potato exports include West Coast port labor troubles, the drought in the western U.S. and the stronger U.S. dollar. A slowdown in shipments from the West Coast could cause a double-digit drop in potato exports this season, he said.
Source: The Packer