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United Nations Conference on Trade and Development...Consumption trends of select commodity groups 5...
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United Nations Conference on Trade and Development
11th MULTI-YEAR EXPERT MEETING ON COMMODITIES AND DEVELOPMENT
15-16 April 2019, Geneva
The outlook for global food and agricultural markets
By
Katia Covarrubias
Economist, Medium-term Outlook and Market Analysis
Trade and Markets Division (EST)
FAO
The views expressed are those of the author and do not necessarily reflect the views of UNCTAD.
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The outlook for global food and agricultural markets
UNCTAD 2019 Multi-Year Expert Meeting on Commodities and Development
Katia Covarrubias, Economist Medium-term Outlook and Market Analysis
Trade and Markets Division (EST) FAO
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OECD-FAO Agricultural Outlook
• 10yearhorizon• Globalcoverage• Majortemperateclimate
commodities• Modelbasedprojections
validatedthroughglobalexpertconsensus
• Scenarioanalyses
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Global context and key assumptions
• Populationwillreachnearly8.4billionby2027(+1%p.a.)
Ø Globally,populationgrowthslowing–fewerpeoplebeingaddedeachyearØ Growthconcentratedinemergingmarkets:SSA,India,MENA
• Incomegrowthprojectedatca.3.5%p.a.
Ø Importantregionaldifferencesintotalandpercapitaterms
• Crudeoilreferencepriceat$67by2027(nominal)
• Realcurrencydepreciationexpectedinmajorexportersofagriculturalcommodities
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Projections of commodity prices
• Supplyanddemandfundamentalskeeprealinternationalreferencepricetrendsslightlydeclining
• Mostcommoditygrouppricesfollowsimilartrendsduetosubstitutabilityandcomplementarities
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1999 2002 2005 2008 2011 2014 2017 2020 2023 2026
2002-04=100
ProjectedFAOFoodPriceIndex
Nominal Real
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Consumption trends of select commodity groups
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• Globalconsumptiongrowthpatternsshapedbychangingsetofdrivers
• BiofuellandscapeshiftingtowardsemergingmarketsØ U.S.andE.U.vs.Brazil,China,
Indonesia• Feeddemand–developmentsinAsia
0%
5%
10%
15%
20%
25%
Cereals Roots&Tubers
Sugar Vegoils Meat Dairy Fish
Grow
th2016-18to
2027
Totalconsumption
Food Feed Fuel Other
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Consumption trends of select commodity groups
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• Populationgrowthwillshapeoutlookforstaplesconsumptionàsaturation
• Preferencesmarkwideninggapinconsumptionofanimalbasedproteins
Ø Staplesmainsourceofproteininlowerincomeeconomies
Ø Meat,fishanddairyinemergingmarketsandhighincomecountries
• Fatandsugarconsumption
Ø Growingwithincomesandurbanization
Ø Healthconcerns:higherinc.countries
0%
5%
10%
15%
20%
25%
Cereals Roots&Tubers
Sugar Vegoils Meat Dairy Fish
Grow
th2016-18to
2027
Foodconsumption
Fooddemandgrowth Pop.growth
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Total agricultural production by region
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Sub-SaharanAfrica
SouthandEastAsia
MiddleEastandNorthAfrica
EasternEuropeandCentralAsia
Oceania Americas WesternEurope
Billion
con
stantd
ollars
2016-18 2027 Growthinagriculturalandfisheriesproduction2016-18to2027(rightaxis)
• Globalvalueofagriculturalproductiontogrowca.15%by2027
Ø Crop14.5%Ø Livestock14.7%Ø Fish12.4%
• Regionalvariationinproductiongrowthoutlook
• Mostoutputgrowthwillcomefromimprovementsinproductionintensity
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Crop production
• YieldimprovementswilldrivemostcropproductiongrowthØ 72%yieldand28%area
harvested
• Maize,oilseeds:Ø Netareaharvested
growthinS.America,Africa,India
• Cotton,sugarcane:Ø AreaexpansioninIndia,
Brazil
• Wheat,riceØ Minimalareaexpansion
0
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-0.20%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
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1.40%
1.60%
1.80%
Wheat Maize Rice Other coarsegrains
Soybean Other oilseeds Cotton Sugarcane Palm oil
Mn ha
Annual growth in yield Annual growth in area Global crop area in 2028 (Million ha, right axis)Globalcropareain2027(Millionha,rightaxis)
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Crop production: Wheat outlook
• YieldexpansionsdominategivenproducercontextØ E.U.–areaconstraints,sustainedhighyieldsØ India–investmentinirrigation
Ø BlackSea–adoptionofimprovedseeds,fertilizers
• Limitationstofurthergrowth
Ø Maizewillremainmorecompetitiveaslivestockfeed
Ø E.U.– biofuelpoliciesmovingawayfromfirstgenerationfeedstocks
Ø Stocksrisingasproductiongrowthexceedsdemandà40%stockstouseby2027
051015202530354045
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100150200250300350400450500
2008 2013 2018 2023 2027
Maize
%Mt
051015202530354045
050100150200250300350400450500
2008 2013 2018 2023 2027
Wheat
%Mt
Stocks Stocktouse(rightaxis)
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Agricultural net exports by regions
• Tradegrowthprojectedtoslowtoabouthalfthepreviousdecade’srate
• Blacksearegionconsolidatesroleinglobalwheatmarkets
• Maintradepatternspersist:
• NetexportsrisingfromtheAmericas
• NetimportstomeetgrowingfooddemandinAfrica
• Ongoingmarketconcentration
-150
-100
-50
0
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100
2004 2007 2010 2013 2016 2019 2022 2025
Billion
con
stan
tdollars
Asia E.EuropeLatinAm.&Caribbean N.Africa&MiddleEastN.America OceaniaSubSaharanAfrica W.Europe
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Key messages and policy challenges
Consumption Production• Consumptiongrowthinmilk,sugarandoils• ExpandingpublichealthconcernsPoliciestocombatmalnutrition
• Outputgainsmostlyfromyieldincreases• ImportantsustainabilitychallengesInvestinsustainableproductivitygrowth
Trade Prices
• Tradegrowthtoslow• Increasingimportdependencies• ExporttradetoremainconcentratedNeedforopenandreliablemarkets
• Realpricesformostcommoditiesexpectedtofall
• UpsidepriceriskshigherthandownsideMarketinformationandriskmanagement
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ThankYou
AfterreleaseinJuly,downloadthelatestpublicationfrom:http://www.fao.org/publications/oecd-fao-agricultural-outlook/2019-2028/en/
Accessthefulldatabaseat:http://www.agri-outlook.org/data/
Contactusforfurtherinformationat:[email protected]