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OECD-FAO AGRICULTURAL OUTLOOK: EMERGING ECONOMIES WILL CONTINUE DRIVING
AGRICULTURAL MARKETS

Emerging economies have increasingly driven global agricultural market
developments over the last 20 years and are projected to continue to do so over
the next decade, but with regional shifts linked to changing demographics and
new economic affluence, according to a report released today by the Food and
Agriculture Organization of the United Nations (FAO)and the Organisation for
Economic Co-operation and Development (OECD).

The OECD-FAO Agricultural Outlook 2024-2033 is the key global reference for
medium-term prospects for agricultural commodity markets, and this year's
edition marks the 20th edition of the joint publication. For two decades, the
report has analysed trends in the demographic and economic drivers of
agricultural commodity supply and demand, projected the shifts in production and
consumption locations, and assessed the resulting changes in international
agricultural trade patterns.

A notable shift expected over the coming decade is the increasing role of India,
Southeast Asia and Sub-Saharan Africa and the declining role played by China.
While China accounted for 28 percent of growth in global consumption of
agriculture and fisheries in the previous decade, its share of additional demand
over the coming decade is projected to fall to 11 percent, attributed not only
to a declining population and slower income growth but also to a stabilisation
of nutrition patterns.

India and Southeast Asian countries are projected to account for 31 percent of
global consumption growth by 2033, driven by their growing urban population and
increasing affluence. Among predominantly low-income regions, Sub-Saharan Africa
is projected to contribute a sizeable share of additional global consumption (18
percent), primarily due to population growth-driven demand for food.

Total agricultural and fisheries consumption (as food, feed, fuel and other
industrial raw materials) is projected to grow by 1.1 percent annually over the
next decade, with nearly all of the additional consumption projected to occur in
low- and middle-income countries. Food calorie intake is expected to increase by
7 percent in middle-income countries, largely due to greater consumption of
staples, livestock products and fats. Calorie intake in low-income countries
will grow at 4 percent, too slowly to achieve the Sustainable Development Goal
target of zero hunger by 2030.

"The Outlook confirms the need to implement strategies that bridge productivity
gaps in low- and middle-income countries to increase domestic production and
boost farmers' incomes," said FAO Director-General QU Dongyu.

"This Outlook has served as a valuable reference for policy planning, providing
a sound evidence base and data for medium-term prospects for agricultural
commodity markets. Over the coming decade, the volumes of agricultural
commodities traded globally is expected to increase between net exporting
regions and net importing regions, but with regional shifts reflecting increased
global consumption in India and Southeast Asian countries," OECD
Secretary-General Mathias Cormann said. "Well-functioning agricultural markets,
reducing food loss and waste, and more productive and less polluting forms of
production will remain critically important for global food security and to
ensure rural livelihoods can and do benefit from global agrifood value chains."

Focus on productivity and reducing food loss and waste
Growth in crop production is projected to be driven primarily by productivity
increases on existing land rather than an expansion of the cultivated area,
leading to a decline in agriculture's global greenhouse gas (GHG) emissions
intensity. Similarly, a significant proportion of the growth in livestock and
fish production is also expected to result from productivity improvements,
although herd expansions will also contribute to production growth. Direct
emissions from agriculture are therefore projected to increase by 5 percent over
the projection period.

Despite these expected productivity improvements, particularly in least
productive countries in Africa and Asia, significant productivity gaps are
projected to persist, challenging farm incomes and food security and increasing
countries' requirements for food imports. Technological gaps, limited input use
and natural climatic conditions remain some of the key factors underpinning
disparities in agricultural productivity.

Well-functioning international agricultural commodity markets will remain
important for global food security, as 20 percent of calories are traded and
rural livelihoods can benefit from participation in markets and global agrifood
value chains.

The underlying causes behind the peaks in international agricultural prices
experienced in 2022 are subsiding and real international reference prices for
main agricultural commodities are projected to resume their slight declining
trend over the next 10 years; however, this report notes that this may not be
reflected in local retail food prices.

This year's Outlook features a scenario that simulates the impact of halving
food losses along supply chains and food waste at the retail and consumer levels
by 2030. The scenario projects a potential 4 percent reduction in global
agricultural GHG emissions by 2030, distributed relatively evenly across
countries regardless of income levels. It also projects food prices to fall,
resulting in increased food intake in low- and lower middle-income countries by
10 percent and 6 percent respectively, potentially reducing the number of
undernourished people by 153 million (-26 percent) by 2030. While the scenario
highlights potential benefits for consumers and the environment, it also points
to challenges for producers, as lower producer prices and decreased production
would notably impact their livelihoods.

As with previous editions, the Outlook offers decadal projections for cereals,
oilseeds, vegetable oils, sugar, meat, fish, dairy products, as well as cotton,
roots and tubers, pulses, bananas and tropical fruits and biofuels. The market
projections are the bases for indicators on nutrition and greenhouse gas
emissions from agriculture. Commodity highlights based on the dedicated chapters
include:

Cereal demand is projected to continue to be led by food use, closely followed
by feed use. In 2033, 41 percent of all cereals will be directly consumed by
humans, 36 percent will be used as animal feed, while the remainder will be
processed into biofuel and other industrial products.

Yield challenges are projected to persist for oilseeds, with major producers
experiencing slow growth or declines in yield, notably in Indonesia and Malaysia
for palm oil, and the European Union and Canada for rapeseeds.

Poultry meat will dominate the growth of the meat sector, primarily due to its
relative affordability and perceived nutritional advantages. It is projected to
account for 43 percent of total meat proteins consumed by 2033.

World milk production is projected to grow at 1.6 percent per year over the next
decade, faster than most other important agricultural commodities. Most of the
growth will occur in India and Pakistan.

Over 85 percent of the additional projected fish production will stem from
aquaculture, elevating its share in global fish production to 55 percent by
2033.

Source: fao.org

Publication date: Thu 4 Jul 2024


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