Record agri-food exports in 2024, close to 70 billion

The food sector is the spearhead of the diversification of Made in Italy, the shield that compensates for the collapse of the German market and sectors such as cars

Despite the collapse of our sales in Germany, the first market for Made in Italy, Italian exports held up in 2024, closing the year with a loss limited to a modest -0.5%. An important fact because last year not only did our exports to the German market collapse (-5% compared to 2023), but also those to many "satellite" countries of Germany, an economy overwhelmed by a crisis that has now lasted more than five years. Among these countries, we highlight Austria (-11.8%), Czechia (-2.4%) and Slovakia (in the latter case -6.8% in the first eleven months of 2024, the December data is still missing). The German recession also affected France, our third largest market, so Italian exports also decreased beyond the Alps last year (-2%). Furthermore, exports to the United States, our second market, also lost ground (-3.6%).

But, then, how did Made in Italy manage to resist in 2024, given the decline in exports to its top three markets? The answer is very simple: thanks to its extraordinary diversification in terms of products and markets.

The exceptional product diversification of Italian exports: food and pharmaceuticals offset the declines in cars and fashion in 2024

Italy manages to diversify its risk on the world trade scene in a way that is unique in the world, first and foremost thanks to a notable differentiation of products, i.e. by now exporting practically almost everything, except PCs and mobile phones. It is no coincidence that our country can boast, on the contrary, the lowest concentration index of exported products worldwide, according to UNCTAD (see figure 1). Among the G-20 countries, the UNCTAD export concentration index grows as we move from very diversified economies such as Italy towards countries, such as Japan or Korea, characterized by a predominance of some large exporting sectors such as cars or electronics, or if we consider countries such as Brazil, Argentina, Russia, Australia or Saudi Arabia, which are mainly exporters of minerals, agricultural raw materials or energy. Made in Italy, on the contrary, is extremely diversified and is no longer what it was 30-40 years ago, mainly made up of fashion and home furnishings. Among our exporting sectors today there is much more agri-food than in the past, there is a very strong mechanical sector, there are means of transport other than cars, such as yachts and cruise ships, there is a pharmaceutical sector which is rapidly expanding, there are various specialist leaders in cosmetics, for example for the eyes, lips, hair. In short, over the years we have become hyper-diversified and also have a good balance between the different products in terms of relative importance.

Strong product differentiation is a notable shield against possible difficulties of some single product or sector. A shield that also protected us in 2024, when Italian exports of some important items went badly, especially motor vehicles (-16.7%) and textiles-clothing-leather-footwear (-4.5%). Don't worry. Agriculture (+5.1%), food, beverages and tobacco (+7.9%) and pharmaceuticals (+9.5%) more than offset those drops. With almost surgical compensation, precise down to the last euro. For example, the export of motor vehicles in 2024 lost 4.8 billion euros compared to the previous year, more than compensated by the agri-food chain (agriculture plus food industries), whose exports grew by 4.9 billion. In turn, the decline in exports of fashion and furniture was 3.2 billion overall, while that of machines and mechanical devices was 1.4 billion: together they make 4.6 billion fewer exports, more than offset by an increase of 4.7 billion in pharmaceutical exports (see figure 2).

The markets of the Arabian Peninsula, the ASEAN countries and Mercosur compensate for the decline in Italian exports to Germany in the last two years

In Germany, in the midst of the economic crisis, Made in Italy is selling less and less. In fact, in 2024 Italian exports to Berlin amounted to 71 billion euros, down 5% compared to the previous year, as we have already recalled; but they had already decreased by 3.5% also in 2023. Essentially, in two years our exports to the German market decreased by 6.5 billion, i.e. 8.4% less than in 2022.

Also in this case the strong differentiation of Italy's exports, this time in geographical terms, allowed us to cushion the German collapse. This was possible thanks above all to the growth of our exports to the Arabian Peninsula, the ASEAN and Mercosur countries.

First of all, we discover that in the period January-November 2024 (data for the entire year is still missing) Italy exported 7.2 billion euros of goods to the United Arab Emirates, at the center of the important Roman Business Forum in mid-February, i.e. 1.7 billion more (+31.9%) compared to the same period two years ago. Our exports to Saudi Arabia have also increased considerably in the last two years, reaching 5.5 billion euros in the first eleven months of 2024, i.e. 1.9 billion more (+52.8%) compared to the same period of 2022. In essence, Italian exports to these two countries of the Arabian Peninsula alone grew by 3.6 billion and compensated for more than 2/3 of what Made in Italy lost on the German market over the same period time measured over eleven months (-5.7 billion). It is one of many possible examples of the strength of our diversification in terms of products and markets. It is our trump card in the global South, given that in two years we have recovered approximately another two billion euros from the Asean and Mercosur countries compared to what we lost on the German market.

Dubai, Abu Dhabi, Jeddah, Riyadh and Doha the new frontiers of Made in Italy exports

It is worth focusing on the growing importance of the Arabian Peninsula as a new pillar of our exports: a sort of new "Arabia Felix", however moved further north than the true one of Roman times (corresponding to current Yemen and Oman), today instead located on the Jeddah-Dubai axis. It is certainly a truly "felix" geographical area for Made in Italy. In fact, considering overall Italian exports to the United Arab Emirates, Saudi Arabia, Qatar, Kuwait and Bahrain, they amounted to 16.2 billion euros in the period January-November 2024. With also Oman and Yemen (the latter, however, insignificant) we reach 16.6 billion, i.e. 2.6 billion more than what Italy exported to China in the same period, equal to 14 billion. United Arab Emirates, Saudi Arabia and Qatar are the three main destination countries for our exports in the Arabian Peninsula. Alone, these three countries represent 14.8 billion of Italian exports, again in January-November 2024, and are now worth more than China.

Undoubtedly China is a very important market for us and presents good potential yet to be seized for our companies. But it makes you smile when you think back to when at the beginning of the new century themainstreamraging in Italian politics, among commentators, economists and even among a certain elite of our entrepreneurs, it obstinately pointed to China as the new "Eldorado" for Made in Italy. A market so expanding, it was said, that in the future it would be able to more than compensate for the huge losses in world shares that asymmetric competition and dumping from China were then causing to the districts and small and medium-sized Italian exporting companies. In an article of mine from twenty years ago (Chinese challenge, the calculations don't add up for Italy, “Il Sole 24 Ore”, 25 January 2005) I warned about the exaggerated glorifications of the potential of the Chinese market. And I wrote that, even in the best case scenario, our exports to China would hardly ever be able to come even remotely close to those to a single Mediterranean nation like Spain or to Eastern Europe. Predictions which, twenty years later, have punctually come true. In 2024, in fact, Italian exports to Spain amounted to 34.5 billion euros, still more than double those to China (15.3 billion in the entire last year). While there is no need to bother the whole of Eastern Europe, our exports to Poland, equal to 19.8 billion in 2024, are enough to find a single market in the countries of the former Soviet empire which is now more important for us than China, and not by a little.

The Arabian Peninsula is our true new "Eldorado" outside of Europe, with the United Arab Emirates, Saudi Arabia and Qatar in the lead. We therefore welcome new collaboration agreements and mutual investments between Italy and these countries, which show that they are able to increasingly appreciate our products and technologies. The export of Made in Italy products to Dubai, Abu Dhabi, Riyadh, Jeddah and Doha is growing at a remarkable pace. Let's take the case of the United Arab Emirates. In two years, our fashion exports increased by 77.7% (exceeding 1.1 billion euros in the first eleven months of 2024). The export of machinery and mechanical devices (1.3 billion euros) grew by 50%, that of electrical devices (526 million) by 67.2%. But food, drinks and tobacco are also doing well (365 million), up by 33.1%.

Before Covid, in 2019, China was more important than the Arabian Peninsula as a destination market for our exports. Today, after just five years, it is the opposite. Also in 2019, China was the ninth market for our exports and the United Arab Emirates was the twenty-second. China has now fallen to 11th place, while the UAE has gained six steps, moved up to 16th place and is about to catch up with Japan (see Figure 3).

The agri-food boom alone compensates for the fall in exports to Germany, France and the United States

At the level of sectors and products there is no doubt that the agri-food chain has been one of the great protagonists of the growth of our exports in recent years. Overall exports from agriculture, forestry and fishing and those from the food, beverage and tobacco industries reached 69.1 billion euros in 2024, a new historic high, just below the 70 billion threshold. Compared to 2019, the year before the pandemic, Italian agri-food saw its sales abroad jump by as much as 23.8 billion in just five years (see figure 4).

In the two-year period 2023-2024, in particular, exports from the Italian agri-food chain increased by 8.4 billion euros, alone neutralizing the decline in national exports to Germany (-6.5 billion), the United States (-0.3 billion) and France (-0.9 billion), i.e. our three largest markets.

Over the two-year period considered, taking the January-November period as a reference (detailed data for December 2024 not yet available), it is possible to see how various agri-food items were among the products protagonists of the greatest increases in Made in Italy exports, together with jewellery, medicines, yachts, cosmetic products and packaging machinery. These are the agri-food products whose exports have increased the most: olive oil (+1 billion and 94 million euros compared to January-November 2022); cheeses and milk derivatives (+893 million); processed fruit and vegetables (+729 million); chocolate and confectionery (+646 million); condiments (+587 million); fresh pastries (+437 million); bakery products (+434 million); ready meals and dishes (+404 million); hams and cured meats (+381 million); mineral waters and soft drinks (+342 million); coffee (+335 million); vegetables (+274 million); sparkling wines (+268 million); pasta (+208 million).

Also in the period January-November 2024, compared to the same period in 2022, the greatest increases in Italian exports of the food, beverage and tobacco industries alone (excluding agriculture) were recorded towards: United States (+1,047 million euros), Germany (+960 million), France (+773 million), United Kingdom (+555 million), Spain (+374 million), Austria (+260 million).