Food costs set to stay higher
Source: Bloomberg News |
June 18, 2011, Saturday
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Print Edition
Print Edition
FOOD prices will remain higher in the next decade than in the past 10 years as agricultural production slows and demand increases, putting the poor at a rising risk of malnutrition and hunger, the OECD and the United Nations said in a joint report yesterday.
Global farm output is forecast to grow an average 1.7 percent a year through 2020, compared with 2.6 percent in the previous decade, the Paris-based Organization for Economic Cooperation and Development and the UN's Food and Agriculture Organization said in their annual Agricultural Outlook report.
"Slower growth is expected for most crops, especially oilseeds and coarse grains," they said. "The global slowdown in projected yield improvements of important crops will continue to exert pressure on international prices."
Food costs rose to a record in February, according to an index of 55 agricultural commodities tracked by the Rome-based FAO. Corn futures have risen 73 percent in Chicago in the past 12 months, wheat gained 48 percent and rice 27 percent.
"Harvests this year are critical, but restoring market balances may take some time," the organizations said. "Until stocks can be rebuilt, risks of further upside price volatility remain high."
World corn inventories are forecast to slide for a third year in 2011-12 to the lowest in five years, while demand will be at a record, United States Department of Agriculture data show. Global soybean stocks may fall a second year to the lowest in 18 years.
The world population is forecast to climb to 9.2 billion in 2050 from an estimated 6.9 billion in 2010, requiring a 70 percent jump in agricultural output, the FAO said. Corn prices in Chicago rose to a record this month as demand for the grain as food, feed and a raw material for ethanol has outstripped production growth, depleting stocks.
Per capita food consumption is expected to grow fastest this decade in east Europe, Asia and Latin America as incomes rise, with the biggest gains for vegetable oils, sugar, meat and dairy products, they said. Growing populations and income in China and India will sustain "strong" commodity demand. Food deficits in sub-Saharan countries are expected to rise as population growth outpaces domestic food output.
Global farm output is forecast to grow an average 1.7 percent a year through 2020, compared with 2.6 percent in the previous decade, the Paris-based Organization for Economic Cooperation and Development and the UN's Food and Agriculture Organization said in their annual Agricultural Outlook report.
"Slower growth is expected for most crops, especially oilseeds and coarse grains," they said. "The global slowdown in projected yield improvements of important crops will continue to exert pressure on international prices."
Food costs rose to a record in February, according to an index of 55 agricultural commodities tracked by the Rome-based FAO. Corn futures have risen 73 percent in Chicago in the past 12 months, wheat gained 48 percent and rice 27 percent.
"Harvests this year are critical, but restoring market balances may take some time," the organizations said. "Until stocks can be rebuilt, risks of further upside price volatility remain high."
World corn inventories are forecast to slide for a third year in 2011-12 to the lowest in five years, while demand will be at a record, United States Department of Agriculture data show. Global soybean stocks may fall a second year to the lowest in 18 years.
The world population is forecast to climb to 9.2 billion in 2050 from an estimated 6.9 billion in 2010, requiring a 70 percent jump in agricultural output, the FAO said. Corn prices in Chicago rose to a record this month as demand for the grain as food, feed and a raw material for ethanol has outstripped production growth, depleting stocks.
Per capita food consumption is expected to grow fastest this decade in east Europe, Asia and Latin America as incomes rise, with the biggest gains for vegetable oils, sugar, meat and dairy products, they said. Growing populations and income in China and India will sustain "strong" commodity demand. Food deficits in sub-Saharan countries are expected to rise as population growth outpaces domestic food output.
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