Paris/Rome: Emerging economies have increasingly influenced global agricultural market developments over the past 20 years and are expected to continue doing so over the next decade. However, regional shifts due to changing demographics and new economic affluence are anticipated, according to the Agricultural Outlook 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 serves as the key global reference for medium-term prospects for agricultural commodity markets. This year 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 shifts in production and consumption locations, and assessed changes in international agricultural trade patterns.
According to the report, a notable shift expected over the coming decade is the increasing role of India, Southeast Asia, and Sub-Saharan Africa, and the declining role of China. While China accounted for 28 per cent of the growth in global consumption of agriculture and fisheries in the previous decade, its share of additional demand is projected to fall to 11 per cent in the coming decade. This is attributed to a declining population, slower income growth, and a stabilisation of nutrition patterns.
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India and Southeast Asian countries are projected to account for 31 per cent of global consumption growth by 2033, driven by their growing urban populations and increasing affluence. Sub-Saharan Africa, primarily due to population growth-driven demand for food, is projected to contribute 18 per cent of additional global consumption, the OECD-FAO Agricultural Outlook projects.
Total agricultural and fisheries consumption (as food, feed, fuel, and other industrial raw materials) is projected to grow by 1.1 per cent annually over the next decade, with nearly all of the additional consumption occurring in low- and middle-income countries. Food calorie intake is expected to increase by 7 per cent in middle-income countries, largely due to greater consumption of staples, livestock products, and fats. Calorie intake in low-income countries will grow by 4 per cent, too slowly to achieve the Sustainable Development Goal (SDG) target of Zero Hunger by 2030, the report says.
“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.
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“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 are expected to increase between net exporting regions and net importing regions, 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 cultivated area, leading to a decline in agriculture’s global greenhouse gas (GHG) emissions intensity. Similarly, a significant proportion of growth in livestock and fish production is expected to result from productivity improvements, although herd expansions will also contribute. Direct emissions from agriculture are projected to increase by 5 per cent over the projection period.
Despite these expected productivity improvements, particularly in the least productive countries in Africa and Asia, significant productivity gaps are projected to persist, challenging farm incomes and food security and increasing the need for food imports. Technological gaps, limited input use, and natural climatic conditions remain key factors underpinning disparities in agricultural productivity.
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Well-functioning international agricultural commodity markets will remain important for global food security, as 20 per cent 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 OECD-FAO Agricultural Outlook features a scenario simulating 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 per cent 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 per cent and 6 per cent, respectively, potentially reducing the number of undernourished people by 153 million (-26 per cent) 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.
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As with previous editions, the OECD-FAO Agricultural Outlook offers decadal projections for cereals, oilseeds, vegetable oils, sugar, meat, fish, and dairy products, as well as cotton, roots and tubers, pulses, bananas and tropical fruits, and biofuels. The market projections are the basis for indicators of nutrition and greenhouse gas emissions from agriculture.
Commodity highlights based on the dedicated chapters
- Cereals: Demand is projected to continue to be led by food use, closely followed by feed use. By 2033, 41 per cent of all cereals will be directly consumed by humans, 36 per cent will be used as animal feed, and the remainder will be processed into biofuel and other industrial products.
- Oilseeds: Yield challenges are projected to persist, 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.
- Meat: 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 per cent of total meat proteins consumed by 2033.
- Dairy: World milk production is projected to grow at 1.6 per cent per year over the next decade, faster than most other important agricultural commodities. Most of the growth will occur in India and Pakistan.
- Fish: Over 85 per cent of the additional projected fish production will stem from aquaculture, elevating its share in global fish production to 55 per cent by 2033.
