EMERGING markets, particularly in the Asia-Pacific region, are showing promising growth trajectories in consumption of sustainable-certified agricultural commodities, driven by increased environmental awareness, rising incomes and urbanization, according to an expert in
sustainability standards.
A chapter of a global report, “The State of Sustainable Markets 2025,” written by Erika Luna, a policy analyst at the International Institute for Sustainable Development (IISD), said emerging markets in Asia-Pacific and Latin America present considerable growth potential in commodities such as coffee, palm oil, cotton and sugar cane.
This, while traditional markets in Europe and North America, which have historically dominated demand for voluntary sustainability standard (VSS)-certified products, may be stagnating or declining in some commodity sectors due to economic pressures and shifting consumer priorities, she said.
“However, VSS-compliant producers still depend heavily on Western markets while domestic consumption in producing countries remains limited despite large production volumes,” she added.
Market research
Citing a market research report of Mordor Intelligence, Luna said Asia-Pacific countries are consuming more sustainable-certified coffee products amid increased accessibility through popularized digital markets and growing awareness about health and ethics.
Similarly, the cocoa market in the Asia-Pacific region is experiencing the fastest regional growth globally, expanding at a 9.62 percent compound annual growth rate through 2030, she said.
For palm oil, Luna said emerging markets are showing meaningful gains from very low baselines. Indonesia is the world’s top producer of palm oil, while Singapore and Malaysia were leading among Asian markets.
“Cotton-producing countries in Asia are consuming more sustainable cotton,” she said.
Luna said China, India and Türkiye consume most of their tea production domestically, with China absorbing 88 percent and India more than 80 percent of their respective outputs.
“This consumption pattern indicates substantial untapped potential to increase VSS-certified tea consumption, as even modest percentage increases would translate to substantial absolute volumes given the scale of domestic markets,” she added.
Barriers
Luna said that despite these promising developments, some commodity sectors face major barriers to expanding certified consumption in emerging markets.
Citing reports, Luna said price sensitivity remains a primary constraint, as certified products typically carry premiums of 10 percent to 30 percent that many middle-income consumers are unwilling or unable to pay.
The absence of regulatory incentives or mandatory sustainability requirements in most emerging economies means that market growth depends entirely on voluntary corporate commitments and consumer willingness or purchasing power to pay, she said.
The State of Sustainable Markets 2025, published by the International Trade Centre in collaboration with Research Institute of Organic Agriculture and IISD, underscored the importance of sustainability standards in international trade due to their role in promoting ethical business conduct, preparing businesses for upcoming mandatory regulations, fostering harmonization in global trade and driving innovation.
“Sustainability standards… provide a framework for companies to ensure that their operations are environmentally friendly and socially responsible. These standards serve as a signal to consumers, demonstrating a company’s commitment to ethical practices and thereby enhancing its reputation and marketability,” it said.
The comprehensive annual update on the state of sustainable markets provides data on 13 major sustainability standards for bananas, cocoa, coffee, cotton, oil palm, soybeans, sugarcane, tea and forestry products.
This year’s report adds data from 2023 and finds that growth continued after an unusual dip in 2020. / PHILEXPORT NEWS AND FEATURES