medium term prospects of agricultural commodity markets
TRANSCRIPT
Medium term prospects of agricultural commodity markets – Uncertainties and challenges –
Marcel Adenäuer (OECD)
COCERAL/FEDIOL Symposium, Rome
27 May 2016
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• UN projections: 8.5 Bn people by 2030 (+ 1.2 Bn from 2015)
• But food demand grows even faster:
Major driver for food demand: Population growth
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Global calorie demand Global population
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• Experts see:
• Moderate economic growth in the OECD area
• Slight slowdown in major emerging economies
for the coming decade
Also important: Income growth
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Energy prices, a major source of uncertainty:
Source: IEA WORLD ENERGY OUTLOOK 2015
Crude Oil prices for different future scenarios
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• Exchange rates • Further US Dollar appreciation against most currencies?
• Inflation • Moderate in most countries ?
• The policy environment • Agricultural/Food-, Trade-, Energy- and Environmental
policies
Other drivers
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• Real food prices expected to decline slightly, but remain above levels before 2007-08 food price crisis.
• Changing relative prices: › Consumption of staples reaching saturation in many countries › Meat and dairy prices increase relative to crops – higher incomes
and animal-protein demand › Coarse grain and oilseed prices increase relative to food staples – feed demand
• Calmer markets but a risk of resurgent volatility
• Spread of imports across a large number of countries; concentration of exports among a few key suppliers
Highlights of the OECD-FAO Outlook 2015-2024
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Prices to remain higher than in the years preceding the 2007-08 price spike
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Index (2012-14=100)
Cereals Dairy Meat Oilseeds
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Projected real prices continue a trend of long-term decline
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USD/t
Real Maize Price Long Term Trend
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But there is a substantial risk of a further price shock
10th
90th
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USD/t Nominal maize price
Probability of price outside the 10-90th percentile = 1 – 0.8**10 or
approximately 90%
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• Cereals are still at the core of human nutrition, but growing incomes, urbanisation and a certain globalisation of eating habits contribute to the ongoing transition of diets that are higher in protein, fats and sugar.
• Annual increase in global consumption is projected for cereals at 1.1%, meat 1.3% and dairy 1.6%.
• Demand is growing at slower rates compared to the past decade, due to: population, saturation, recuperation.
Demand trends
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Global consumption growth by groups
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2002-04 2012-14 2024 2002-04 2012-14 2024 2002-04 2012-14 2024
Least Developed Countries Other developing countries Developed countries
kcal/day/person
Fish Dairy Sugar Meat Vegetable oils Cereals Other
+47
+13
+25 +7 +27
+18
+4
+73
+15
+34
+20
+9
+13
+4
+4
+14
+13
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• Growth in livestock production is expected to outpace crop production in the next decade.
• The structure of global agricultural production is expected to respond to the increased need for coarse grains and oilseeds compared to wheat or rice.
• The limited availability of additional arable land will impact the expansion and concentration of additional crop production.
Supply Trends
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Trade is expected to keep pace with production growth
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2013-15 20252012-2014 2024
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Global Trade trends for selected products
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World exports to remain highly concentrated Shares of top five countries in global exports in 2024
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5th exporter 4th exporter 3rd exporter 2nd exporter 1st exporter 2013-15 top 5
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Imports in 2024 more dispersed…but China matters!
Shares of top five importers in world imports
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China 5th importer 4th importer 3rd importer 2nd importer 1st importer
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World price impacts of China growth at 5% (versus 6% under the baseline)
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• Sustainable productivity growth
• The role of Foreign Direct Investments
• Pressure on Resources used by agriculture and the food sector
• Climate change constraints and opportunities
• The role of the ongoing urbanization process on the service content of food
• Impacts of consumer- and nutrition policies as well as consumer preferences on food demand
Challenges for the Agricultural sector