Market expansion for organic foods depends on the outcome of a number of evolving issues like organicprice premiums, the price-quality trade off, country of product origin, genetically engineered content, andintegration of social goals into the production process. In the past five years, expanding global markets for organic foods have seen annual growth rates of 15 to 30 % in Europe, the United States, and Japan. Over 20 to 30 % of consumers surveyed across Europe, North America, and Japan claim to purchase organicfoods regularly. The worldwide market for organic foods is estimated at about US $ 17.5 billion, with the USaccounting for about $8 billion. The European organic market is estimated at $5.255 billion, while theJapanese organic market is estimated at $2.5 billion.
Market Growth Projections
According to ITC projections, the organic market size in 2010 is estimated at $ 46 billion in the EU, $45billion in US and $11 billion in Japan. The exchange of organic products internationally is increasingdramatically. Markets are evolving to demand highly processed organic products as well as rawcommodities. In Europe, markets are expanding for ready-to-eat meals, frozen foods, baby food, snacks,and beverages. Organic food processing ingredients include juices, fruit powders, dried fruit, meat,flavorings, essential oils, herbs and spices, and nuts. Sample trade flows into Europe are from Israel (freshproduce), Brazil-Chile-Argentina (fresh produce, soy, and wheat), other European countries (baby food,processed foods, cereals, and meat), Canada (wheat, soy, and canola), Mexico-Central America (bananas,citrus, and coffee, cocoa), Sri Lanka-India (tea), and the United States (processed foods of all types, wheat).
International Organic Market
• Current market sizeo World - USD 25 billiono USA - USD 8 billiono European Union - USD 7.5 billiono Japan - USD 3 billiono Growing market in metropolitan cities in India• World average growth rate 20-25%• Commands premium prices 15-50% over conventional produce• Entry barriers limited, as organic certification is criticalSource compiled by ITC-2002
Market potential- (INDIA)
With the change in dietary need and enhanced income coupled with awareness for health there is a growingappreciation for organic products. Many of the hotels consume green food grown under the contracts.Organically labeled fruits and vegetables are also appearing on some of markets. Since India has muchlarger area, which have used minimal pesticides and chemical where potential for conversion exist, organicmovement has taken a root in many of the states and there is growing demand especially in cities andmarket is expected to grow more than 20 per cent annually. It is envisaged that 20 per cent of productionshall be organic in 5 years.
Existing Regulatory provision for domestic market
• Presently there is no regulatory mechanism for production & sale in domestic market.• Some private agencies/organizers are doing on their own in sporadic pockets.• Since country has enormous potential for organic agriculture, the Government of India has identified theorganic farming as major thrust area during X Plan.• The existing legal framework deals with export of organic products and not for sale in the domestic market.• The Government is proposed to be restricted to formulating standards and designating accreditationagencies.• The private sector, NGOs etc. will continue to have a major role in promotion of organic farming and also incertification process.Existing Regulatory provision for domestic market.
Most common organic products exported from India