Market Trends of asia-pacific agricultural biologicals Industry
Growing Government support for organic cultivation in countries like China, India, Indonesia, and Australia, increased land for organic farming
- The area under organic agricultural land in the Asia-Pacific region was over 3.7 million hectares in 2021, representing 26.4% of the global organic area, as per FiBL statistics. Moreover, the organic area under cultivation witnessed a growth of 19.3% during the historical period (2017-2022). As of 2020, the region recorded around 1.83 million organic producers, with India topping the list with 1.3 million organic producers.
- China, India, Indonesia, and Australia are the major countries with large organic cultivation areas in the region. Government authorities in countries such as China and India constantly promote organic agriculture to reduce reliance on chemical inputs for crop cultivation. For instance, India has implemented schemes such as Paramparagat Krishi Vikas Yojana and the All India Network Programme on Organic Farming (AI-NPOF).
- In 2021, China accounted for the maximum share of 66.1% with 2.5 million hectares, followed by India, Indonesia, and Australia with 19.3%, 1.5%, and 1.4% shares, respectively. The crops grown in the total organic land can be divided into three types, namely row crops, horticultural crops, and cash crops. Row crops occupy a major share of organic agricultural land in the region, which accounted for a 67.5% share with 2.5 million hectares in 2021. The major row crops grown in the region include paddy, wheat, pulses, soybeans, and millets.
- Cash crops held the second largest share, with 0.7 million hectares in 2021, accounting for an 18.5% share of organic cropland. The demand for organic cash crops, such as sugar and organic tea, is increasing globally. Globally, China and India are the largest organic green and black tea producers, respectively. The growing international demand is expected to increase the organic acreages in the region.
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Per capita spending on organic product predominant in Australia and China’s organic food market growing significantly
- Organic products in India represent far less than 1.0% of the global value demand, with a per capita expenditure of just USD 0.08 in 2021. However, with people becoming more aware of the benefits of consuming organic food and the growth in demand for organic products in categories such as tea and organic juice, India represents a potential market over the coming years. It is expected to reach a value of USD 153.3 million by 2025. Currently, the market for organic goods in the region is very fragmented, with just a few supermarkets and specialty stores selling them, as only people from higher-income families are possible customers.
- China continues to show organic growth above the regional and global averages, posting a 13.3% expansion in 2021. A positive growth pattern is expected to continue, with China averaging a CAGR of 7.1% during the forecast period (2023 - 2029).
- Organic products are anticipated to experience strong growth in China, registering a value CAGR of 7.1% during the forecast period (2023 - 2029) and reaching a total of USD 6.4 billion by 2025. This growth can be attributed to an increasing emphasis on the importance of organic products among the younger generation, a rise in demand for organic baby food due to the growing number of mothers in the workforce, and the increasing adoption of the health and wellness trend.
- Growing consumer knowledge and buying motivations are expected to lead to a better understanding of the sustainable qualities of organic food in the region. Increased per capita income, along with increased consumer awareness of the importance of organic food intake, has the potential to raise per capita expenditure on organic food items in the Asia-Pacific region.
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