NEW YORK — China’s continued influence on agricultural commodity demand and global economic growth, along with increasing weather extremes, stand out as key issues for North American food, beverage and agribusiness in 2013, a recent poll of Rabobank clients shows.
The poll of over 350 executives from leading companies in the North American food, beverage and agribusiness industry was conducted at Rabobank’s recent Markets Forum in New York City. Rabobank is a leading bank to the global food and agribusiness industry.
Asked to name the country or region which they believe will have the greatest impact on global agricultural commodity demand over the next 10 years, 61 percent of respondents chose China. That view of China’s continued dominance far exceeded views of India (14 percent), Africa (10 percent), Latin America (9 percent), and Southeast Asia (6 percent).
Despite recent signs of slowing economic growth in China, the large majority of executives polled see China continuing to be the most important driver of long-term global economic growth. Forty one percent of respondents said China would drive the global economy for between five and 10 more years, while 40 percent said China will remain the primary driver of global economic growth for the next 50 years.
“These results are not surprising and reflect the significant impact that China has had on the food and agribusiness industry over the past 10 years, globally as well as in North America,” said Bill Cordingley, head of food and agribusiness research for Rabobank in the Americas. “China today has the second largest middle class in the world at 157 million, which will surpass the U.S.’s middle class in the next 10 years, so China’s demand for agricultural commodities is going to continue to grow.”
In addition to their views on China, attendees provided opinions on a range of topics they believe will be significant issues for the global and North American agriculture in the coming years.
Notably, 68 percent named weather extremes/volatility as the single biggest factor affecting North American food and agribusiness in 2013. That concern far outweighed the next two closest factors — consumer demand (13 percent) and policy/regulation (10 percent).
Geopolitical events, trade/tariffs/exchange rates, and policy/regulation all received votes in the single digits.
“Given that the North American industry, particularly the U.S., is in the middle of the worst drought in over 50 years,” Cordingley said, “these views are quite understandable and represent a significant issue that is top of mind for most food industry players as we enter 2013.”