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OECD‐                      OECD‐FAO            Agricultural Outlook  2011‐2020            Agricultural Outlook  2011‐     ...
Key macroeconomic assumptions• Global economic recovery  underway (fragile in OECD, but  more robust in BRICs)• 2.2% Infla...
Urbanisation – a key driver                                                               Rural Population   Urban Populat...
Main commodity projections• Commodity prices in real terms to remain above last  decade average levels   – Income, populat...
Production shifts to developing countriesShare of global agricultural and fish production gainsProduction gains between 20...
Large differences in milk production gains                                   OECD Trade & Agriculture                     ...
Ethanol production growing steadily  Feedstocks used for ethanol production over the projection period160140              ...
Biofuels production represents an important share of global                   feedstock utilisation  Share of feedstocks u...
…while feed and fuel push coarse grain demand up                       Food Use          Feed Use               Biofuel Us...
Outlook for dairy products consumption         Butter          Cheese                         SMP       WMP               ...
Global trade to grow by 10-30%Imports : Share of the import gains                                                         ...
While sugar imports are more diversified                     OECD                                                    Emerg...
Key Market Drivers                               Income changes impact mainly demand for meat and dairy products          ...
Key issues and uncertainties• Traditional uncertainties:    – Weather and economic stability    – Developments in trade an...
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Pavel Vavra

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Pavel Vavra

  1. 1. OECD‐ OECD‐FAO Agricultural Outlook  2011‐2020 Agricultural Outlook  2011‐ Pavel Vavra OECD Trade and AgricultureThe Outlook for EU Agriculture, COPA-COGECA, Brussels, 29 June, 2011 OECD-FAO Agricultural Outlook • Agricultural Outlook ‐ a set of  conditional projections  published in an OECD‐FAO  bli h d i OECD FAO annual report  • Comprehensive, dynamic partial  equilibrium model • The datasets are available at  www.agri‐outlook.org  i tl k OECD Trade & Agriculture 2 1
  2. 2. Key macroeconomic assumptions• Global economic recovery underway (fragile in OECD, but more robust in BRICs)• 2.2% Inflation in OECD area but higher elsewhere• Weak US dollar and higher oil prices• Stable policy regimes OECD Trade & Agriculture 3 Slowdown in population growth Annual percentage change OECD Trade & Agriculture 4 2
  3. 3. Urbanisation – a key driver Rural Population Urban Population 9000 8000 7000• Rural population numbers are 6000 expected to stagnate. ons 5000 Millio 4000• All additional population is to 3000 live in urban areas 2000 1000 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 4500 4000 3500 • Move to urban areas to take 3000 Millions 2500 place mainly in developing 2000 countries 1500 1000 500 0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 Developed urban Developing Urban OECD Trade & Agriculture 5 World oil prices to remain relatively high USD/Barrel 120 100 80 60 40 20 0 1985 1990 1995 2000 2005 2010 2015 2020 OECD Trade & Agriculture 6 3
  4. 4. Main commodity projections• Commodity prices in real terms to remain above last decade average levels – Income, population and biofuels growth – Higher cost structure• Latin America and Eastern Europe are the fastest growing production regions• Developing countries driving the global demand and trade gains• G Growing food deficits expected in Sub-Saharan countries i f d d fi it t di S bS h ti• Meat, dairy products, vegetable oils and sugar should experience the highest increases in demand OECD Trade & Agriculture 7 Most commodity prices at higher average levels Percentage change in world prices in real terms relative to 2001-2010 base 60 50 40 30 20 10 0 -10 OECD Trade & Agriculture 8 4
  5. 5. Production shifts to developing countriesShare of global agricultural and fish production gainsProduction gains between 2008/10 - 2020 valued at world reference prices (2004/06) N.America 10% Oceania 2% L.America 21% Asia&Pacific 45% W.Europe 3% E.Europe&C.Asia 7% N.Africa&M.East S.S.Africa 3% 9% 0-15% over the decade 15-30% over the decade +30% over the decade OECD Trade & Agriculture 9 Production shifts to developing countriesShare of global agricultural and fish production gains Sugar, vegetable oil and poultry productionProduction gains between 2008/10 - 2020 valued at world reference prices (2004/06) are expected to record the highest growths SMP WMP N.America 10% Cheese Butter Oceania 2% Poultry Pigmeat L.America Beef 21% Asia&Pacific 45% Fish Sugar W.Europe 3% Veget. Oils E.Europe&C.Asia EE &C A i Protein meals 7% Oilseeds N.Africa&M.East S.S.Africa 3% 9% Rice Coarse grains 0-15% over the decade 15-30% over the decade +30% over the decade Wheat 0 10 20 30 40 Per cent change: 2020 compared to 2008-2010 average OECD Trade & Agriculture 10 5
  6. 6. Large differences in milk production gains OECD Trade & Agriculture 11Fish production growth driven by aquaculture Capture AquacultureMillion tonnes18016014012010080604020 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 OECD Trade & Agriculture 12 6
  7. 7. Ethanol production growing steadily Feedstocks used for ethanol production over the projection period160140 Other 120 Sugar beet100 Non agricultural feedstock 80 Molasse 60 Wheat 40 Biomass-based Sugar Cane 20 Coarse grains -Bnl 2008- 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2010 OECD Trade & Agriculture 13 Strong growth of global biodiesel production Feedstocks used for biodiesel production over the projection period Bnl 40 Jatropha 35 30 Non 25 agricultural feedstock 20 Biomass- based 15 10 Vegetable oil 5 - 2008-2010011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2 OECD Trade & Agriculture 14 7
  8. 8. Biofuels production represents an important share of global feedstock utilisation Share of feedstocks used for biofuel production from global production 2020 2008‐2010 Percent 35% 30% 25% 20% 15% + 90 Mt 10% 5% 0% Sugar cane Vegetable oil Coarse Grains Sugar beet Wheat OECD Trade & Agriculture 15 Food remains the main driver for wheat Food Use Feed Use Biofuel Use Other useDeveloping 2008/10 + 34 Mt Developing 2020 Developed 2008/10 Developed 2020 0 100 200 300 400 500 Million tonnes World 2008/10 World 2020 0 200 400 600 800 OECD Trade & Agriculture 16 8
  9. 9. …while feed and fuel push coarse grain demand up Food Use Feed Use Biofuel Use Other useDeveloping 2008/10 Developing 2020 + 50 Mt + 50 MtDeveloped 2008/10 Developed 2020 0 100 200 300 400 500 600 700 800 Million tonnes + 90 Mt World 2008/10 World 2020 0 200 400 600 800 1 000 1 200 1 400 OECD Trade & Agriculture 17 Driven by economic growth, meat consumption increases especially in developing countries Consumption of meat from 2008-10 average to 2020, per cent World Developing/Developed Developing Beef Developed D l d PorkPoultry Sheep 0 10 20 30 40 0 10 20 30 40 OECD Trade & Agriculture 18 9
  10. 10. Outlook for dairy products consumption Butter Cheese SMP WMP OECD Trade & Agriculture 19Per capita consumption evolution differs by product Per capita consumption of WMP Per capita consumption of cheese OECD Trade & Agriculture 20 10
  11. 11. Global trade to grow by 10-30%Imports : Share of the import gains Vegetable oils, rice and SMP trade growing the fastest N.America 10% Oceania L.America SMP 1% Asia&Pacif 9% WMP ic Cheese 37% Butter W.Europe 15% poultry E.Europe& C.Asia Pigmeat S.S.Africa N.Africa& 4% Beef 9% M.East 15% FishExports: Share of the export gains Sugar N.America 13% Veget. Oils Oceania 4% Protein meals Oilseeds Asia&Paci fic 38% L.America Rice 27% Coarse grains S.S.Africa Wheat ‐1% E.Europe W.Europe 0 10 20 30 40 N.Africa& &C.Asia 6% M.East Per cent change 2020 compared to 2008-2010 average 11% 0% OECD Trade & Agriculture 21 Sugar exports remain highly concentrated and lead by Brazil 2008‐10 2020 Million tonnes r.s.e . 70 60 50 40 30 20 10 0 World Brazil Thailand Australia Mexico India South  Africa OECD Trade & Agriculture 22 11
  12. 12. While sugar imports are more diversified OECD Emerging economies Million tonnes r.s.e. Million tonnes r.s.e. 6 6 5 5 4 4 3 3 2 2 1 1 0 0 European  United  Korea Japan China Indonesia Russia India Union States 2008‐10 2020 OECD Trade & Agriculture 23 Stochastic analysis of projected agricultural production Impact on world coarse grain prices• Monte Carlo simulations on yields, oil and fertiliser prices, macroeconomic variables.• 500 model runs show more upside potential for world coarse grains prices 10% percentile baseline median 90th percentile USD/t 350 300 250 200 150 100 50 0 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 OECD Trade & Agriculture 24 12
  13. 13. Key Market Drivers Income changes impact mainly demand for meat and dairy products 1 % additional income growth p.a. 1% less income growth p.a. beef and veal sheep meat cheese butter sugar poultry meatwhole milk powderwhole milk powder pork coarse grains wheat vegetable oil rice ‐2,5% ‐2,0% ‐1,5% ‐1,0% ‐0,5% 0,0% 0,5% 1,0% 1,5% 2,0% 2,5% Impact of a 1% increase/decrease of annual GDP growth on global commodity consumption (average over projection period) Yield growth and changes have important impact on global commodity prices yields increase by 5% yields decrease by 5% wheat i rice coarse grains protein meals poultry meat oilseeds ‐30% ‐20% ‐10% 0% 10% 20% 30% Impact of 5% increase/decrease in yields of cereals on world commodity prices (average over projection period) OECD Trade & Agriculture 25 Key Market Drivers • Demand growth – above all in developing countries • C Convergence i consumption in ti patterns • Developing countries raise meat consumption • Increased health and nutrition concerns • Supply adjusting to higher production costs • International investment OECD Trade & Agriculture 26 13
  14. 14. Key issues and uncertainties• Traditional uncertainties: – Weather and economic stability – Developments in trade and domestic policies• Biofuels policies and biofuel developments• Food security and climate change• Increased price volatility OECD Trade & Agriculture 27 OECD Trade and Agriculture www.oecd.org/agriculture Contact tad.contact@oecd.org OECD Trade & Agriculture 28 14

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