corn soybean wheat
 
PARIS, FRANCE — Deceleration of demand growth in major emerging economies, stagnating per capita consumption of staple foods, and a continued gradual decline in global population growth rates are among the factors expected to contribute to a weakening growth in global demand for agricultural commodities and food, according to a new report from the Organization for Economic Cooperation and Development and the United Nations’ Food and Agriculture Organization.

The report, “OECD-FAO Agricultural Outlook 2018-2027” was presented in Paris on July 3 by Angel Gurria, secretary-general of the OECD, and Jose Graziano da Silva, director-general of the FAO.

One of the main focuses of the report is on agricultural trade, and the vital role that trade plays in promoting food security. The report underscores the need for an enabling trade policy environment.

According to the report, the weakening of demand growth is expected to persist over the next decade, with population being the main driver of consumption growth for most commodities. Per capita consumption of many commodities is expected to be flat at a global level, the report said.

In the case of cereals and oilseeds, the OECD and FAO indicated that the main source of demand growth will be feed, closely followed by food.

“A large share of additional feed demand will continue to come from China,” the groups noted in the report’s executive summary. “Feed demand growth is nevertheless projected to slow globally, despite livestock production intensification. Much of the additional food demand will originate in regions with high population growth such as Sub-Saharan Africa, India, and the Middle East and North Africa.

“The demand for cereals, vegetable oil and sugar cane as inputs into the production of biofuels is expected to grow much more modestly than in the last decade. Whereas in the past decade the expansion of biofuels led to more than 120 million tonnes of additional cereals demand, predominately maize, this growth is expected to be essentially zero over the Outlook period. In developed countries, existing policies are not likely to support much further expansion. Future demand growth will therefore come predominantly from developing countries, several of which have introduced policies favoring biofuels use.”

The report said that for most agricultural products exports are projected to remain concentrated among stable groups of key supplying countries. However, a notable change is the emerging presence of the Russian Federation and Ukraine on world cereal markets, the report said.

Angel Gurria secretary general of OECD
Angel Gurria, secretary-general of the OECD

“While overall exports from countries and regions abundant in land are set to increase, notably in the Americas, many poorer countries with rising populations and limited land resources will be increasingly dependent on food imports to feed their people,” Gurria said. “It will be essential that exporters and importers alike have access to an open and predictable trade policy environment.”

Graziano da Silva added that what is needed now is a “sustainability revolution.”

“This includes tackling high-input and resource-intensive farming systems that impose a high cost to the environment,” he said. “Soil, forests, water, air quality and biodiversity continue to degrade. We need to adopt sustainable and productive food systems that offer healthy and nutritious food, while also preserving the environment and biodiversity.”