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As incomes have risen in many countries during the past few decades,
consumers have begun purchasing fewer staples (like rice and wheat)
and more high-value food items (such as meat, dairy, pasta, and
frozen vegetables). Global sales of high-value products have been
growing over the past decade. Food suppliers
have responded to this expanding consumer demand by importing high-value
foods from around the world. Moreover, food manufacturers have invested
in processing facilities in many host countries. The choice to import
or produce locally depends on the nature of the product, trade and
domestic policy issues, and other factors affecting transaction
costs.
Food trade is often categorized based on the level of processing
(see Excel table):
- traditional bulk commodities such as wheat, rice, and corn;
- horticultural products such as fresh fruits and vegetables;
- semi-processed products such as flour and oils; and
- processed food products such as pasta and prepared meats.
Horticultural, semi-processed, and processed products are considered
high-value products. Unlike bulk commodities, high-value products
are often ready to eat and are generally more perishable by nature.
These characteristics make high-value products subject to greater
quality and safety scrutiny compared with bulk agricultural commodities.
Given these characteristics, food suppliers sometimes choose to
meet consumer demand through locally processed food products rather
than through imported food. Also, domestic and trade policies can
be impediments for trade in high-value products.
This briefing room provides information to enhance the understanding
of global food markets by examining trends and factors affecting
consumers' demand for food and the impact on the evolution of food
supply chains. Information is also provided to help readers understand
the factors influencing suppliers in foreign markets as they attempt
to satisfy consumer demand, namely through exports or through investments
in local processing.
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