The recent period of high agricultural commodity prices is most likely over, say the OECD and FAO in their latest 10-year Outlook. But the two organisations warn of the need to be vigilant as the probability of a major price swing remains high.
The OECD-FAO Agricultural Outlook 2016-2025, published today, projects inflation-adjusted agricultural commodity prices will remain relatively flat overall in the coming decade. However, livestock prices are expected to rise relative to those for crops.
As incomes improve, especially in emerging economies, demand for meat, fish and poultry will demonstrate strong growth. This creates additional demand for feed, particularly from coarse grains and protein meals, causing their prices to rise prices relative to food staples such as wheat and rice.
- Other findings from the report include:Global agricultural trade is expected to grow by 1.8% per annum in volume during the next ten years, compared to 4.3 percent per year over the past decade.
- Food consumer prices are expected to be less volatile than agricultural producer prices over the coming decade.
- In developing countries, human sugar consumption is expected to rise by 15 percent per capita and that of dairy products by 20 percent over the projection period.
- After stronger gains in recent years, crop production is projected to increase at around 1.5 percent a year globally.
- In South and East Asia, agricultural output is expected to expand by 20 percent over the next decade.
- In Latin America, soybean cultivation is projected to drive most of the estimated 24 percent increase in crop area over the next 10 years.
Monday July 4, 2016/ FAO.