The Growing Importance of Brazil, Russia, India, and China (BRIC) on Food Global Trade

By Pablo Martinez-Mejia and Jaime E. Malaga.

Published by The Global Studies Journal

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Article: Print $US10.00
Article: Electronic $US5.00

During the last decade, important changes have been occurring in the context of global food and fiber trade that may impact the future world’s food supply. Some critical factors affecting global markets include the expansion of new areas of production in South America, large productivity gains in India, China and Eastern Europe, the development of biofuel production in the USA and the EU, and the rapid raise in China’s income and agricultural import demand. Altogether these factors and the reduction on trade barriers are altering the competitiveness of top world suppliers of grains, oilseeds and fiber. In this paper we will assess the changes in competiveness of the BRIC countries, Brazil, Russia, India, and China, in world trade of corn, soybeans, soybean products, wheat, rice, and cotton for the years 2000, 2005, and 2010, as well as to explore the trends for the next decade: 2015 and 2020. We will employ a combination of market share (MS) and Reveal Comparative Advantage (RCA) index analysis and use official UNcomtrade, ERS-USDA, and FAPRI current and forecasted data. Our results suggest that the BRIC nations are and would continue to be competitive in the international trade of corn, soybeans, wheat, rice, soybean meal, soybean oil, cotton, beef, pork, and poultry. Brazil is and would continue to be competitive as a key world exporter of vegetable and animal protein. However, Brazil would marginally diminish its revealed competitiveness in all products but poultry. We can hypothesize that the loss in revealed trade competitiveness in soybeans and soybean products might be explained by the increasing domestic demand for soybeans by the poultry industry; higher domestic demand increases prices making soybeans and soybean products less competitive in the international market. The Russian Federation’s MS gain in the wheat market is a clear result of its high level of competitiveness. The results of this study also suggest that by 2020 the Russian Federation would be highly competitive in poultry production; reducing imports MS. India would maintain its level of competitiveness in rice exports but would reduce its competitiveness in cotton. Finally, China is expected to become slightly competitive in pork and poultry by 2020. Among the BRIC nations, China does not show relative trade advantage, relative export advantage, and revealed competitiveness in any of the products included in this study.

Keywords: BRIC Countries, Changes in Competitiveness, Climate Change, Global Trade of Food and Fiber, Market Shares, Revealed Comparative Advantage

Global Studies Journal, Volume 5, Issue 1, pp.35-46. Article: Print (Spiral Bound). Article: Electronic (PDF File; 4.176MB).

Dr. Pablo Martinez-Mejia

Post-doctoral Research Associate, Department of Agricultural and Applied Economics, College of Agriculture and Natural Resources, Texas Tech University, Lubbock, USA

Dr. Jaime E. Malaga

Associate Professor, Department of Agricultural and Applied Economics, College of Agriculture and Natural Resources, Texas Tech University, Lubbock, USA

My area of expertise in teaching and research is international agricultural trade and its implications on domestic economies in developed and developing countries. I have been doing research on globalization issues and free trade impacts for the last ten years. I am originally from Peru with graduate studies in France (Universite de Grenoble) and the USA (Texas A & M). I have made presentations in twenty two countries, most recently in Ukraine, Ethiopia, Ireland, France, Greece, Honduras, China, Brazil, and Mexico. My current interests are focusing on the effects of the BRIC (Brazil, India, Russia, and China) countries expansion on world food markets and the future global supply of food and fibers.

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