Star Gazing: Markets With the Brightest Potential for U Exporters Every year.

Star Gazing: Markets With the Brightest Potential for U Exporters

Every year, analysts in the Foreign Agricultural Service (FAS) prove by experiment to pinpoint the best sales fields for U.S. agriculture. Using a protoplast that factors in a entertainer of trade and economic data, they rank 75 countries forward the basis of their market potential for a broad range of U farm and nourishment products over the next five years. in the way that far the model's track record has been elegant without grandeur good: Eight of the top 10 markets picked by the agency of the researchers last year went in succession to chalk up all-time highs in their purchases from the United States.

This month AgExporter talked with Mike Dwyer of FAS' Trade and Economic Information Division forward which countries are at the top of the 1991 list, and by what mode the list compares with last year's.

AgExporter: What countries display up as the best market foresights for U.S. agriculture over the nearest five years?

Dwyer: The top four markets upon our list - Taiwan, Japan, Korea and Hong Kong - were also at the top of our list last year, although more [i]or[/i] less have shifted positions slightly.

Spain, the solely member of the European Community (EC) among the top displays ranks as No. 5 this year. Saudi Arabia stands sixth - a major actuate up from last year. The Soviet Union is seventh; China, 8; Egypt 9; Singapore, 10; Pakistan, 11; Thailand, 12 - also a substantial put in motion up; Canada, 13; Algeria, 14; and Malaysia, 15

AgExporter: What happens to instigate a country up or down onward the list from year to year?

Dwyer: Projections of a country's income pullulation over the next five years is the in the greatest degree heavily weighted indicator in our pattern - and so it is a prime determinant of a country's place forward the list. There are a number of countries - as it was as Thailand and Malaysia - where we are projecting significantly higher rates of extension in this year's study than last with equal reason they have moved up in succession our list.

We also made more [i]or[/i] less refinements in our model that might have had an efficiency on various countries' rankings this year. For example, we are using an entirely different measure of a country's creditworthiness and ability to finance imports. Last year, our measure was a country's debt/service ratio - the idea being that the most numerous heavily indebted countries would not have enough hard publicity to fulfill their demand potential.

We recognized that this was a surpassingly narrow measure of a country's creditworthiness in such a manner we substituted a much broader measure - the "institutional investor" credit ratings of countries around the world. This measure, widely used in the international financial community, takes into account a broad range of financial statistics to measure creditworthiness.

We also replaced the agricultural self-sufficiency ratio used in our design last year with what we call "the agricultural import opennes index," which is a measure of market access. The self-sufficiency ratio was based onward caloric needs, but it ignored the fact that many of these wants go unmet because of trade impediments. In this look up to we think this new variable has been an improvement in the model

And finally, we have remov the value of fodder aid shipments from the trade data we are using in the prototype Consequently, our model only evaluates commercial sales calculations As a result, countries which are heavy recipients of subsistence aid, such as Pakistan and Egypt slipped a bit upon the list from last year.

AgExporter: Are there any generalities that you can make about the countries that rank as the best market prospects? Are they in any particular region of the world or in any particular stage of economic development?

Dwyer: The developing countries of Asia and Japan continue to dominate the list of best market foresights as they did last year, unless to an even greater compass And within this group, undivided subgroup stands out - the newly industrializing countries (NICs) of Asia.

This collection includes Hong Kong, Korea, Singapore and Taiwan. These are the developing countries that have had - and probably will continue to have - the greatest income increase over the next few years. They also have experienced one of the sharpest increases in agricultural imports throughout the past few years - reaching all-time highs in 1990 - including record imports from the United States. unless there is another group of developing Asian countries that made a big prompt up the list this year. I call them the "Neo-NICs." They are Indonesia, Malaysia and Thailand. While not all of these countries ranked at the self-same top of our list, they all made major influences up. Each is expected to experience remarkably rapid income growth. In fact, according to our sources, Thailand and Malaysia will be among the fastest growing economies in the world throughout the next five years - averaging 65 percent after discounting the tenors of inflation. Thailand ranks No. 12 and Malaysia No. 15 forward our list of best market prospects

However, while we are optimistic forward the future of these markets, we also acknowledge one significant trade policy constraints that ne to be subdue For example, U.S. high-value issues face numerous obstacles - including tariffs of up to 60 percent restrictive import licensing, phytosanitary restrictions and, in a certain number of cases, outright bans - all meant to save domestic growers and processors.