Global Food Demand And Prices To Decrease Over Next Decade

The “Agricultural outlook 2017-2026” report, compiled by the Organisation for Economic Co-operation and Development, as well as the United Nations Food and Agriculture Organization, forecasts that over the next decade, demand for agricultural products will slow considerably, causing real prices of most agricultural and fish commodities to follow a slightly declining trend, thereby keeping them below previous peaks.

The context for this year’s “Agricultural outlook 2017-2026” is record production and the abundant stocks of most commodities in 2016, which have kept prices well below the peaks experienced over the last decade.

Average prices of cereals, meats and dairy products continued to decline, while prices of oilseeds, vegetable oils, and sugar experienced a slight rebound in 2016.

Over the outlook period, demand for agricultural and fish commodities is projected to slow considerably.

The primary sources of growth in the last decade were: the People’s Republic of China, where rising meat and fish demand caused the consumption of animal feed to grow almost 6% every year; and the global biofuel sector, where the use of feedstock inputs grew almost 8% every year. The replenishment of cereal stocks by 230 million tons over the last decade also augmented demand.

These recent drivers are not anticipated to support markets in the same way over the medium term, and no other sources to replace them are foreseen.

SLOWDOWN IN GLOBAL FOOD DEMAND

Growth in food demand for virtually all commodities in the outlook is anticipated to be less than in the previous decade. Globally, per capita food demand for cereals is anticipated to be largely flat, with growth only expected in the world’s least developed countries. Meat consumption prospects are seen as limited on the basis of recent trends in many countries, where dietary preferences, low incomes and supply-side constraints curb consumption growth.