Organic and sugar sectors seen as likely winners in 2010

Posted by Daniel Palmer on 6th January 2010

Australia’s organic and sugar industries can look forward with anticipation to a successful 2010, according to a leading market forecaster.

A list of the top sectors for the year ahead from information analysts IBISWorld Australia also includes online shopping, as the major retailers – including supermarket chains Coles and Woolworths – begin to embrace the online channel.

IBISWorld’s Ian MacGowan said rising commodity prices were the reason behind many of the industries on their list, with food commodities – led by sugar – showing strength in recent months.

“Our research has indicated that the driving factor behind the top couple of industries is essentially prices of commodities rebounding from a low in 2009,” he said, according to the ABC. “Especially in the case of sugar, we’re expecting prices to rebound by about 17 per cent, which will be really good for the manufacturers, processors and the sugar cane farmers.”

Revenue is forecast to rise by 15.9% in calendar year 2010 for sugar manufacturers, up to $3.11 billion from $2.68 billion.

The organic sector, too, is likely to have a good year as growth picks up once again after a more modest growth rate last year.

Demand for organic products in Australia and around the world has risen in recent years as consumers increasingly consider the health benefits and environmental impact of their food choices,” Robert Bryant, general manager of IBISWorld Australia, noted. “The industry is projected to total $425 million in 2010, representing growth of 14.8% from 2009, while employment is expected to grow by 2.6%.”

Higher disposable incomes, improved range and availability of organic food, and growing consumer awareness were the factors that would lead consumers to overcome the price discrepancy, according to the researchers.

Growth in online shopping is forecast at 4.7% as usability, efficiency, reliability and security of online retailers improves. There is still considerable room to grow, IBISWorld added, given online sales represent only 5.5% of all retail sales – comfortably below levels seen in markets like the US and UK.