Food commodity prices to ease in coming years – report
Prices of major food commodities are expected to ease in the coming decade after a surge in the past year, helped by higher farm productivity and slowing demand from China, the U.N. food agency and the OECD said on Monday.
A gauge of global food costs has jumped to a nine-year high on the back of huge Chinese demand and weather concerns, squeezing consumer budgets hurt by the Covid-19 crisis. But in the next couple of years, inflation-adjusted prices may ease before staying largely flat through 2030 as demand growth for grains and fish slows and farming supplies rise, the OECD and UN said in a report.
The year-long rally in food prices has raised the cost of everything from pizza dough to meat and coffee. That could push more people into hunger while threatening faster inflation that may prompt central banks to tighten stimulus measures for economies still in recovery mode after the pandemic.
In the coming decade, agricultural commodities demand is expected to grow 1.2% a year, compared with 2.2% over the last decade, the OECD and UN said.
Chinese demand would remain a driver of global agricultural markets, particularly for consumption of meat and fish, but rising at a slower pace than the past decade, the report said.
Global greenhouse gas emissions from agriculture are projected to increase by 4 percent over the next ten years, mostly due to expanding livestock production, the UN said. This is despite the fact that emissions per unit of output – carbon intensity of production – are expected to decrease significantly over the period.
Globally, aggregate food availability is projected to grow by 4 percent over the next decade to reach just over 3000 calories per person per day. Per capita consumption of fats is projected to grow the fastest among major food groups, due to higher consumption of processed and convenience food and an increasing tendency to eat outside the home, both associated with ongoing urbanisation and rising women’s participation in the workforce. Income shortages and food price inflation in the wake of the COVID-19 pandemic are reinforcing this trend.
In high-income countries, per capita, food availability is not foreseen to expand significantly from its already high levels. However, income growth and changing consumer preferences will support the shift away from staples and sweeteners to higher-value foods, including fruits and vegetables and, to a lesser extent, animal products.
In low-income countries, food availability is projected to increase by 3.7 percent, equal to 89 calories per person per day, mainly consisting of staples and sweeteners. Economic constraints will limit increasing consumption of animal products, fruits, and vegetables. Due to income constraints, the per-capita consumption of animal protein is projected to decline slightly in Sub-Saharan Africa, a region whose self-sufficiency for major food commodities is, on current trends, expected to decrease by 2030.