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SLOWING POPULATION GROWTH TO LEAD TO DECELERATING DEMAND FOR FOOD

08 August 20182 min reading

A decade after the food price spikes of 2007-8, conditions on world agricultural markets are very different. According to OECD-FAO Agricultural Outlook 2018-2027, production has grown strongly across commodities, and in 2017 reached record levels for most cereals, while cereal stock levels climbed to all-time highs. At the same time, demand growth has started to weaken. As a result, prices of agricultural commodities are expected to remain low. Sub-Saharan Africa and India will account for a large share of the additional food demand for cereals in the coming decade.

FAO

Global agricultural production is growing steadily across most commodities, reaching record levels in 2017 for most cereals, meat types, dairy products and fish, while cereal stock levels have climbed to all-time highs, according to an annual report from the Organisation for Economic Cooperation and Development and the UN’s Food and Agriculture Organization. The report stresses that agricultural trade plays an important role in promoting food security, underscoring the need for an enabling trade policy environment.

The fourteenth joint edition of the OECD-FAO Agricultural Outlook provides market projections for major agricultural commodities, biofuels and fish, as well as a special feature on the prospects and challenges of agriculture and fisheries in the Middle East and North Africa. World agricultural markets have changed markedly since the food price spikes of 2007-8, as production has grown strongly while demand growth has started to weaken. In the coming decade, real agricultural prices are expected to remain low as a result of reduced growth in global food and feed demand. Net exports will tend to increase from land abundant countries and regions, notably in the Americas. Countries with limited natural resources, slow production expansion and high population growth will see rising net imports. Increasing import dependence is projected in particular for the Middle East and North Africa, where a scarcity of arable land and water constrains agricultural production.

OECD-FAO Agricultural Outlook 2018-2027 sees weakening growth in global demand for agricultural commodities and food, while anticipating continuing productivity improvements in the sector. As a result prices of main agricultural commodities are expected to remain low for the coming decade.

The report, presented in Paris by OECD Secretary-General Angel Gurría and FAO Director General José Graziano da Silva, attributes the demand slowdown to a deceleration of demand growth in major emerging economies, stagnating per capita consumption of staple foods, and a further gradual decline in global population growth rates.

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