China and India play greater role in EU trade

By Laura Crowley

- Last updated on GMT

Related tags: Cent, International trade, European union, India

European food and drink trade with China and India has shot up
since 2000, against a backdrop of an overall growth in trade with
these countries that has seen China become Europe's second trading
partner after the USA.

China was ranked Europe's fourth biggest trading partner for food and beverages in 2000. Meanwhile India jumped from 17th in 2000 to ninth in 2006. Overall trade between Europe and China has increased by 150 per cent, while trade with India has grown 80 per cent, with Germany emerging as the major EU player. The statistics, which have been released by the statistical office of the European Communities ahead of trade summits that will be held with the two countries this week, underscore the growing importance of emerging economies in world food trade. Increasing competition ​ Products produced in these countries often come at a lower cost, piling pressure on European companies to cut their prices, even though they are sometimes of an unknown quality or provenance. At the same time, China and India have adopted increasingly Westernised diet trends, therefore fuelling the need for trade and adding to competition. For example, figures released by Euromonitor showed that the value of the ready meals market in China has grown from $291.8m in 2002 to $508.6m this year. In India, the value has leaped from $3.7m to $22.2m. A market report released last week by analysts Plimsoll showed, for example, that sales in the UK food ingredients industry are falling on average as a result of increased competition, both domestically and internationally. Almost half of the companies analysed recorded a fall in sales, with an average fall of 15 per cent. Trade withChina ​Food and drink exports to China have increased from €439m in 2000 to €885m in 2006. Meanwhile, imports have mounted from €3,498 to €5,979m. This has resulted in a deficit of -€1,924m, up from -€1,086m in 2000. Germany, accounted for more than 40 per cent of overall EU27 exports to China, which equaled €27bn. It was followed by France, which exported €8bn, 13 per cent of all exports, and then Italy with 9 per cent. Germany was also the largest importer, making up 22 per cent of the total with €43bn. Second to Germany was the Netherlands, with 16 per cent, and then the UK, making up 15 per cent. In 2006, the EU27 exported €12.3bn of services to China, while imports amounted to €10.6bn, meaning that Europe had a surplus of €1.7bn in trade in services. Trade withIndia​ Europe exported €57m worth of food and drink products to India in 2000. This increased five-fold to €263m in 2006. Imports from India have grown at a lesser pace, from €1,207m to €1,471 over the six-year period. This led to a small increase in trade deficit, from -€1,150 to -€1,208. Germany was again the largest exporter, making up 26 per cent of the total exports to India, with a value of €6.3bn. It was followed by Belgium, with 19 per cent, and the UK, with 16 per cent. The UK was the largest importer, with a value of €4.5bn, accounting for 20 per cent of total EU imports. The second largest importer was Germany, making up 17 per cent, followed by Belgium and Italy, making up 13 per cent each. In 2006, the EU27 exported €6.6bn of services to India, while imports of services amounted to €5.1bn. This meant that Europe had a surplus of €1.5bn in trade in services with India.

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