Agri Commodities

Jamaica: Agri-commodity Market Overview

Agri-commodity Market Overview

The Jamaican economy is heavily dependent on agri-commodities, which account for around 20% of GDP and 80% of exports. The country’s agricultural sector is expected to face challenges in the coming years due to a number of factors, including declining domestic demand and increasing competition from other Caribbean countries.

Jamaica has traditionally been an exporter of sugarcane and bananas, with coffee being the third largest export agri-commodity. However, the country’s sugar industry has seen some significant challenges in recent years as it struggled with declining yields, increased competition from Brazil, and higher sugar prices. Much of Jamaica’s sugar output has traditionally been exported to other countries (particularly the United States) at prices that are below their cost of production. In order to remedy this situation, the government implemented a new support mechanism known as the Sugar Diversification Policy (SDP) in 2016 to help improve local sugar production efficiency and reduce reliance on exports.

The government also introduced several other initiatives aimed at boosting productivity within its agri-commodity sector, such as reducing red tape burdens for farmers; improving access to credit; promoting agribusiness innovation; developing new markets; providing technical assistance; investing in irrigation infrastructure.

The Jamaican Agri-commodity & Food Market

The Jamaican Agri-commodity & Food Market is one of the largest markets in Jamaica with total revenue of $1 billion in 2019. The growth rate of this market is estimated at 4% from 2017 to 2022. The major driving factors for this market are increasing population, rising disposable income levels, changing lifestyles, and increasing health awareness among consumers.

Jamaica imports rice from India because it is cheaper than rice imported from other countries. According to the FAO, one metric ton of Indian rice averages US$400 while one metric ton of Venezuelan rice averages US$600. In addition, Indian rice is milled, which means that it can be used immediately after purchase without further processing.

The Jamaica Agricultural Commodities Regulatory Authority (JACRA) reported that in 2018/2019 there were 729 registered importers and exporters of rice in Jamaica. These importers imported 15 thousand metric tons of white long-grain milled rice from Guyana and 28 thousand metric tons of white medium grain milled rice from India. Overall, all of the importers imported 36 thousand metric tons of white medium grain milled.

Consumption of rice in Jamaica

Rice is one of the most important staple foods in Jamaica. It has been a major part of the Jamaican diet for many years and it is consumed daily by a large percentage of the population. The popularity of rice can be attributed to its versatility, nutritional value, easy preparation, and affordability. Rice is also used as a base ingredient in many dishes and can be combined with other foods such as fish, meat, vegetables, fruits, and spices to create a variety of tasty meals.

Rice consumption in Jamaica has increased over the years due to improved supply chains resulting from increased imports by government agencies such as the National Housing Trust (NHT). The majority of Jamaicans eat rice as part of their main meal, either alone (52%) or with other foods (48%).

Government initiatives to boost the Agri-commodity sector in Jamaica

The most recent Government initiative to boost the development of the Agri-commodity sector is the Jamaica Agricultural Commodities Regulatory Authority (JACRA), which was established in 2017. JACRA’s mandate is to:

  1. Facilitate the orderly development and regulation of Jamaica’s agricultural commodities sector
  2. Assist in the development and enhancement of agriculture commodity markets, trade, and logistics
  3. Provide a conducive environment for global agri-business, commerce, and investment in agricultural commodities
  4. Facilitate access to international markets for Jamaican agricultural commodities
  5. Support strategic initiatives to ensure food security for Jamaica

Jamaica Agri-commodity Trade Market

Jamaica is the largest Caribbean producer of sugar, having produced approximately 5 million tons of sugar in 2019. The industry employs approximately 22,000 people and contributes approximately $1 billion to Jamaica’s GDP. The country’s sugar production accounts for 6% of world output and 11% of the total sugar traded globally.

The country’s main export destinations are the EU, which accounts for almost 50% of total exports (including re-exports), followed by Asia (32%), North America (17%) and Latin America (7%).

The top three commodities exported from Jamaica are sugar, bananas and coffee followed by bauxite ore.

Conclusion

Jamaica has the potential for major growth in its agricultural sector, especially if it is able to attract more foreign investment and agricultural expertise and can modernize its agricultural industry. Moreover, developing this sector of the economy will help diversify Jamaica’s economy beyond tourism. Cultivating coffee, horticulture, and bananas could see significant advancements over the next decade as Jamaica makes a concerted effort to increase overall production while also increasing export opportunities.

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