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Box 2: The role of technology in facilitating trade
Technology has been at the forefront of changes, making tropical fruits available to consumers globally at affordable prices. Advances in transportation, in combination with other technological developments that have complemented the progress
in transportation, have helped reduce delivery time, maintain product quality and cut shipping costs. In recent decades, it has become easier for shippers to deliver produce to purchasers thousands of miles away, with no substantial loss in freshness. The feasibility of long-distance trade in perishable products will likely increase further as shipping technologies continue
to improve. In particular, advances in controlled atmosphere (CA) technologies have extended the shelf life of perishable products and continue to improve product quality and variety worldwide. With CA, products hold up better during transportation. CA technologies allow operators to lower the respiration rate of produce by monitoring and adjusting oxygen, carbon dioxide and nitrogen levels within a refrigerated container. In this way, CA can slow ripening, retard discolouration and maintain freshness of highly perishable tropical fruits that would not remain fresh during ordinary refrigerated ocean transport.
Source: Huang, Sophia (2010), “Global Trade of Fruits and Vegetables and the Role of Consumer Demand”, in Hawkes et al., Trade, Food, Diet and Health: Perspectives and Policy Options, Wiley Blackwell.
world’s leading exporter of pineapple, and by significant domestic consumption in Brazil, the second largest producer of pineapple. Papaya and avocado meanwhile account for significantly lower volume shares, at an estimated 15 percent and 6 percent, respectively, in 2017. Papaya is mainly produced and consumed in India and Brazil, where population growth has sustained domestic demand.
When viewed in terms of producing countries, the leading producer of major tropical fruits is India, accounting for an estimated 28 percent of total global major tropical fruit production in 2017, due to its strong position in
the production of mango and papaya. India produces approximately 40 percent of total global mango and papaya production, which is predominantly destined for
its domestic market. Other significant producers of tropical fruits include China and Brazil, where again produce is mainly destined for domestic consumption, and Mexico, which is set to rank as the largest exporter of major tropical fruits again in 2017.
TRADE
Seemingly, trade volumes of major tropical fruits stand
to be less affected by production shocks on a global
level, as only a small fraction of total output is traded
in international markets. However, the competitive landscape for major tropical fruits is rather concentrated, with few countries engaging in large-scale global trade. Consequently, supply disturbances for producers who
are required to comply with strict certification and phytosanitary standards can lead to short-term disruptions in the supply to international markets. Against this, global trade in major tropical fruits is expected to reach a new peak in 2017 of around 7 million tonnes, up 5.2 percent or 350 000 tonnes from last year. Trade prospects overall would have been higher, had it not been for adverse weather conditions in the leading exporting countries of Mexico (avocado, mango and papaya) and Costa Rica (pineapple), where supply shortages led to subsequent disruptions in the pace of shipments during the first three quarters of 2017 and also in recent months owing to hurricane damage to production.
Globally, avocado and mango are the two tropical fruits that have witnessed the strongest growth in popularity. Between 1990 and 2017, world import demand for avocado increased at an annual average growth rate of 14 percent, significantly outperforming supply and, thereby, driving up export, wholesale and retail prices. Similarly, import demand for pineapple, mango and papaya grew at annual average growth rates
of 11 percent, 10 percent and 9 percent, respectively, during the same time period.
In the past, trade flows were governed by the proximity to markets, but this is no longer the case. Demand
has been greatly fostered by significant innovations in distribution technology and logistics, where economies
of scale have lowered transport costs and delivery time, making tropical fruits available and affordable year-round in major destinations in the world. Policy has also played an important role in the form of lower trade barriers, bilateral and multilateral trade agreements, and the harmonization of sanitary and phytosanitary regulations.
Rising demand in developed country markets has been the predominant factor fuelling the expansion in global shipments, particularly in the United States and the EU, the two largest importing blocs, where increasing health consciousness and more widespread awareness of the
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FOOD OUTLOOK NOVEMBER 2017
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