Published by organic watchdog Organic Monitor, the report reveals that the three major trading blacks - North America, Europe and Asia - are becoming more and more segregated as they increase in size.
And as markets and demand expands, manufacturers of organic foods and beverages find themselves unable to sell their products as organic in countries with different organic standards, resulting in production difficulties and excess bureaucracy.
The three major sets of organic standards are the US government's NOP (National Organic Program), the EU standards, and Japan's JAS (Japanese Agricultural Standard).
"These standards are non-equivalent and quite separate. The main problem is that they don't recognize each other. There's a global shortage of organic products and US producers should be able to sell their products in Europe and European products should be available in the US," said director of Organic Monitor Amarjit Sahota.
"Although the US Department of Agriculture and the EU have been in talks for some years in the hope of finding a solution, no agreement has yet been made as neither party wants to make any major concessions. So the stalemate will continue," he told FoodNavigator-USA.com.
And as a growing number of countries start to introduce national organic standards based on EU, NOP or JAS standards, this division between the three major trading blocks is increasing.
But although there is currently no end in sight to the trade challenges, food firms are starting to find ways around the barriers.
One consequence is that American organic producers are increasingly targeting the Asian market, where few countries currently have national standards, making it an easier and more accessible export market, according to Sahota.
Another way round for US manufacturers is the growing importance of private organic standards, which meet NOP requirements as well as those of other certifying bodies.
For example, CCOF (California Certified Organic Farmers) abide by NOP requirements but are also equivalent to the UK's Soil Association standards, which means that products carrying this certification can be sold in both the European and US markets.
In addition, the IFOAM (International Federation of Organic Agriculture Movements), a Germany-based international body, has been in operation for over three decades, and aims to co-ordinate the network of organic movements around the globe by providing an international framework for organic agriculture. This allows private certifiers to adopt its international standards, thereby spreading the network of organic uniformity.
Creating worldwide demand for organic products is another major challenge the industry faces, according to the new report.
With Europe and North America generating over 90 percent of sales, production in other regions is mainly export-geared.
"Over-concentration of demand could put the global organic food industry in a fragile condition," said Sahota, adding that sluggish growth rates or trade restrictions in these regions could close up markets for many producers.
Indeed, the report finds that a disparity is occurring between organic food production and consumption.
Most sales of organic foods are from affluent countries because of the price premium. Consumers in Switzerland, the US and Singapore are the highest spenders on organic foods in their respective regions. However, the largest increases in organic food production are in developing countries. Latin America, Asia and Africa have reported triple-digit growth in organic farmland since 2000, whereas double-digit growth has been observed in other regions.
Global sales of organic food and drink are expected to approach $40bn this year, but demand continues to outpace supply, with a number of regions reporting supply shortages.
"Undersupply is most evident in the North American region where empty retailer shelves have become the norm for some product categories. Several European countries are also experiencing supply shortages this year as consumer demand for organic foods has escalated," said the report.
The organic meat and dairy sectors are the most adversely affected with imports coming into both regions from Latin America and Australasia.
Universally, fruit and vegetables are the most popular organic products. According to Organic Monitor, the category comprises a third of global revenues. Fresh produce like apples, oranges, carrots and potatoes are typical entry points for consumers buying organic products, it said. Their fresh nature appeals to consumers seeking healthy & nutritious foods. Dairy products and beverages are the next most important organic product categories.
The North American market for organic food and drink was valued at $14.9bn in 2005, accounting for almost half of global organic sales.
Published in recent weeks, The Global Market for Organic Food & Drink is priced at $1,499.