Organics are marching

In Argentina, the business grows at a rate of 10%. The keys: a diversified offer and a strong global demand.

Gentless iEco Clarín, September 18th of 2011.
By Liliana Cobelo

The global market for organic products is growing rapidly and this is good for Argentina. Including food, textiles and cosmetics, it moves about 60 billion dollars, and is expected to increase between 7 and 10% by the end of this year, despite several crises. The two major consumer markets are the United States and the European Union. Asia and Oceania are also taking off in consumption and production, in the same way that Latin America is emerging as one of the leading producers and exporters.

The fact that the sector in the world is in full ascent is very good for Argentina because 98% of local production is exported, the rest is sold in the domestic market (which also is climbing). The main export destination is the EU, following along U.S., with a high growth in recent years, with the addition of the sum of value and industrialization. In third place is situated Switzerland.

The potential is huge, taking into account that for 2020 it is predicted a consumer with more demands, and more interested in their health, will be a friend of the labels that guarantee origin and quality and will be more committed to fair trade, the environment and wanting to know what carbon footprint is leaving each company in our only planet.

The trend is strong. "The crisis of 2008 hit hard to the organics and to the markets of Europe and the U.S., but consumption of organic products grew again. In the U.S., from the total food consumed annually, 4% represents organic products. There is also a recovery in prices and export volumes to these markets", said Mr. Predro Landa, president of the Argentine Movement for Organic Production (MAPO) and of the certification OIA (Organización Internacional Agropecuaria). "Despite tariff systems and distorting measures that hurt the industry and impacts in Argentina to have fewer companies and less back, is selling everything", he said. According to FAO, the local industry's current growth is about 10% annually.

The historical export organic products that do not lower their flags are cereals and oilseeds (wheat bread and soy), fruit, vegetables, and industrial products (honey, sugar and wine), but there is great potential for development (also for the market) for industrial products, canned organic fruits and vegetables, flour products, refined oils for human consumption, cereal flour and oilseeds, dairy and other animal products. To these, it has to be added organic wines, wool, cotton, flowers with culinary purposes, teas of all types, baby food, rice, up to including a line of cosmetics hundred percent organic.

Regarding to the sum of production value, there is not a definite trend. "There are sectors in which it is easier to address the issue of value added, not for others. In exports, the issue of tariff escalation is a big problem because it becomes more expensive with the added value", said Sebastian Sala, director of Eco Holding SRL, a firm that processes and exports organic fruit pulp and vegetables (4,000 tons) for baby food to Europe and U.S. With own farms and processing plant in Ugarteche, Mendoza, also purchases to thirds and sells to a local client, Nutribaby, 2% of its production to make porridge for baby.

In relation to prices, a spread is achieved, depending on the time of year, ranging from 10 to 40%. "With organic, you can bring an added value compared to conventional, but always depends on the time of year because it sometimes happens that we are at the same price", said Marcelo Nuss, who along with Pablo Martinez, own The Organic, an organic food distributor that supplies to the orchard The Annunciation, stocks products from around the country and has the form of home delivery of custom boxes. In the same line are Tallo Verde, Organic Corner and Organic Garden.

In Argentina, the sector has about 2,000 small and medium companies, among producers, industrialists, traders and certifiers. The local business moves around US$ 200 million, and is still rising.

Also, slowly, organic are looming on the shelves of the local market, not only at landmarks like La Esquina de las Flores or Hausbrot, but also in the large supermarket chains, through which is no longer impossible to get the organic polenta Del Campo, the oil Biolive, or the honey Bioway, for example. Not to mention the wide range of organic offer of the traditional China House, from our local Chinatown, that even surprises with miso (fermented soybean paste) certified organic.

"The domestic market is resurging strongly", said Landa. Remains steadfast in horticultural products, there is a growth of industrial products such as organic sugar, and is appropriate to capture the range of small organic farmers across the country and also for the development of products with high added value.

Source: www.ieco.clarin.com