Food trade

Posted: 14 December 2007

Most food is consumed in the country where it is produced. But international trade in major foodstuffs is increasing faster than production. Trade in agricultural products and foodstuffs grew from US$65 billion in 1972 to US$ 468 billion in 1997, and to US$ 634 billion in 2004. (Source: FAOSTAT, FAO. 2006)

Coffee price volatility
Coffee price volatility
Coffee price volatility. Source: International Coffee Organisation
Major food exports of developing countries include coffee, cocoa, tea and sugar. The prices of these traded commodities is volatile. For example, over the last decade the world price of coffee has varied between a high of nearly US 150 cents/lb and a low of under 50 cents/lb. The prices of a number of primary food commodity prices rose in 2007, partly due to increased demand from China.

  • Imported food constitutes approximately one-fifth of world food consumption. It contributes about 600 calories a day to the world's daily average of around 2800 calories per person. One may infer from this and say that this is equivalent to food supply for about 1.2 billion people. This is not equivalent to the number of people who depend on imported food for survival. (Probably no one lives exclusively on imported food, although there are isolated cases such as small island states and isolated communities, where the food supply may predominantly be imported.)

  • Transnational corporations (TNCs). Almost 70 per cent of world trade is between transnational corporations. The largest 500 TNCs account account for about 80 per cent of foreign investment and 30 per cent of world output. TNCs are particularly active in the processing and marketing of foodstuffs; it is common for a small number to account for over 80 per cent of the trade in an agricultural product.

  • Five companies control 90 per cent of the international grain trade; six companies account for 75 per cent of the global pesticide market. Five companies - Chiquita, Del Monte, Dole, Fyffes and Noboa - control over 80 per cent of the global banana market. with Chiquita and Dole Foods, accounting for almost 50 per cent, Three companies control 85 per cent of the world's tea market,

  • One of the largest food TNCs is Cargill, a private US-based company describing itself as "an international provider of food, agricultural and risk management products and services with 158,000 employees in 66 countries". Cargill originates, processes and distributes grain, oilseeds and other commodities to makers of food and animal nutrition products. It also provides crop and livestock producers with farm services and products. In its fiscal year 2007, Cargill sales totalled $88,266 million, compared with $54,380 million in 2003 - a rise of over 50 per cent in 4 years - and more than the gross domestic products of the 15 poorest sub-Saharan African countries put together.