Study Finds China Dominates Global Production Market

Lizzy SchultzAg Group, Financing, Markets, Research

marketline-logo Research firm MarketLine has found that the global agricultural products market reached a value of just over $2.2 trillion in 2015, and the Asia-Pacific revision accounted for well over half of the world’s agricultural production.

MarketLine found that, despite a decrease in overall value terms last year, China continues to be the dominant country in the agricultural products market, with a 2015 market value of approximately $830 billion and an expectation to grow by 11.2% through to 2020.

The firm’s latest report states that the production of cereal crops continues to be the strongest segment, accounting for 32.1% of all agricultural products globally.

“Prices have been particularly unstable in recent years and this volatility has contributed to some declines in the value of the market,” said Chris Bertenshaw, Analyst for MarketLine. “However, volumes have grown steadily, suggesting that global production and demand is unaffected, and the signs suggest that the market will produce more stable growth in value through to 2020.”

The report also found that agricultural growth is becoming less crucial to the Chinese economy, and that China is beginning to drop out of its pattern of very high growth, which we have seen in previous years. Over time, China may be a less reliable source of growth in comparison with countries like India, which offer more potential for efficiency improvements in overall yields.

“Further industry issues revolve around government intervention in certain key markets,” adds Bertenshaw. “For instance, India and the US heavily subsidize key crop production for their domestic consumption, which can drive down the global price when domestic needs are catered for and there is an overflow into world markets.