Development & Aid, Economy & Trade, Headlines, Latin America & the Caribbean

LATIN AMERICA: Market for Organic Products Growing Fast

Mario Osava

RIO DE JANEIRO, Nov 18 2005 (IPS) - Health is a universal concern, which is why the market for organic products should enjoy steady growth, even if it faces limitations like unfamiliarity with organic goods or the low incomes of most of the population in the region, said Marli Rezende after visiting the third annual edition of the BioFach Latin America fair.

The international organic trade show and conference that ran Wednesday through Friday in Rio de Janeiro offered many novelties, “with more attractive products, better hygiene, and packaging in line with health regulations,” said Rezende, who told IPS she visited the fair “as a consumer” although she runs a branch of the Horti-Fruti chain of stores that sell fresh produce.

The information, statistics and lectures offered at the fair pointed not only to the growth in the share of the market represented by organic products in the countries of Latin America, but to the diversification in this sector as well.

One area that enjoyed particularly strong growth was cosmetic products. In the 26.5 billion dollar global market for organic products, which are produced without chemicals, cosmetics are in second place, after food products.

A study found that in Germany, organic cosmetic products represented 19 percent of the organic market, reported Harald Dittmar, director of BDIH, which certifies natural cosmetics. And Germans tend to spend less on such products than people in other countries, he noted.

The first BioFach world trade fair was held in 1999 in Nuremberg, Germany. The annual fair held in that city draws an average of 30,000 visitors from 100 countries every February. The initiative later spread throughout the world, in the form of national or regional fairs.

The first BioFach in Brazil was held in 2003. It was a national event, but its success led to the expansion of the fair in 2004 into a regional event – the biggest organic fair in Latin America.

Rio de Janeiro was an obvious choice for hosting the regional fair. In Brazil, organic products have an estimated market of around 300 million reals (135 million dollars) a year, with the state of Rio de Janeiro accounting for one-third of the total.

That is a small proportion – less than one percent – of the global market, but it is growing fast, at a rate of 50 percent a year, says Planeta Orgánico, one of the companies that organises BioFach Latin America.

Worldwide, the organic market is growing at around 18 percent. But in some rich countries, like Japan and several European nations, growth surpasses 20 percent a year. “Mad cow” disease and other illnesses have helped fuel consumption of all-natural products.

In Brazil there has been sustained growth, and there is also a core of “faithful consumers,” although little has been done to develop the market, commented Sandra de Lima, manager of the Horti-Fruti produce store in the middle class Rio de Janeiro neighbourhood of Flamengo.

The organic produce bins in her shop are always well stocked and the supply “never drops, it’s constantly growing,” she said.

But one of her customers, Cecilia Maceda, complained about the limited variety of products and the “unbearably high prices” charged for them, which are normally double the cost of regular produce and in some cases, like that of lettuce, a full four times greater.

“I don’t buy organic anymore, because of the outrageous prices,” Maceda told IPS.

“I hope the organic market expands quickly, because that way we could have a wider diversity of products and better prices, because of the larger scale of production,” she added.

For her part, Angela Drummond, a communications professor in Belo Horizonte, capital of the southeastern state of Minas Gerais, remarked, “I always buy organic, in spite of the higher prices, because I know about the dangers of pesticides.”

Over 20 years ago, when she was a practicing journalist, Drummond won an award for an article revealing that a mysterious disease that had killed a number of people in a village near Belo Horizonte was no mystery at all. It had been caused by the chemical pesticide Aldrin, which was sprayed on the area from planes. An entire family, including two children, died from the resulting poisoning.

In addition to stands displaying the products of some 300 Brazilian and foreign producers, this year’s Latin American BioFach fair featured discussions on such themes as identifying labels for organic goods, the harmonisation of standards throughout Latin America, and the different markets for food, cosmetics and natural fabrics.

Brazilian Agriculture Minister Roberto Rodrigues announced that his government will begin certifying organic and natural foods, cosmetics, fabrics and cleaning products as of next year.

The organic market in Brazil is still small, but the country has significant exporting potential given its enormous size and biodiversity. There is a company called Tribal Brasil, for example, that produces organic teas exclusively for export, since Brazilians are not heavy tea drinkers.

Brazilian honey has conquered numerous foreign markets over recent years thanks to being chemical-free, and has taken over much of the market share formerly controlled by Chinese honey, which has lost favour because of its pesticide content.