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Global organic sales soar but supply is strained

By staff reporter , 16-Nov-2006

Soaring global organic food and drink sales are driving demand, but undersupply of organic ingredients is undermining the long-term stability of the sector, says a new report from Organic Monitor.

A new report of The Global Market for Organic Food & Drink by British consultancy Organic Monitor projects that revenues will approach US$40 bn (€31bn) this year as consumers increasingly seek the healthy and nutritious option.

Countries where consumers have high disposable incomes are said to be driving the demand, with Switzerland, the US and Singapore leading the way. Indeed, according to Organic Monitor, the G7 countries account for over 80 per cent of total sales, despite only having 12 per cent of international organic farmland.

 

And the rising demand is outstripping supply, despite reported triple-digit growth in organic farmland in Latin America, Asia and Africa since 2000.

 

Over-concentration of demand could put the global organic food industry in a fragile condition, said Amarjit Sahota, director of Organic Monitor.

 

The shortages are most evident in North America, and, according to Organic Monitor, many US-based companies are currently scouring the globe for organic ingredients.

 

According to the consultancy, organic ingredients like nuts, beans, and seeds are increasingly being imported from Turkey, China, and Brazil, herbs and spices are coming from Paraguay, India, and Ethiopia, and organic fresh fruit and vegetables are increasingly coming in from African and Asian countries.

 

Several European countries are also experiencing supply shortages, said Organic Monitor, as consumer demand for organic foods escalates.

 

Even sectors previously at fault from overproduction are now suffering from undersupply.

 

The report also points out that divisions and differences amongst the three major trading blocks Europe, North America and Asia are impeding the global organic food and drink industry.

 

The Organic Monitor report, priced €1,199 (£799, $1,534), also assesses the future outlook, business opportunities and industry trends.

 

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