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Demand for agricultural commodities slows: OECD and FAO

The OECD and FAO forecast that global demand for agricultural commodities (including for non-food uses) will grow at 1.2% per year over the next decade; well below the growth experienced during the last decade (2.2% annually).

More than anything, this is due to an expected slowdown in demand growth in China (0.8% per year compared to 2.7% per year over the last decade) and other emerging economies, and lower global demand for biofuels.

For cereals and fish, world demand will grow at half the rate of the last decade, while for vegetable oils less than a third of the growth of the last decade is expected.

Vegetable oils were the fastest growing commodity in the last 10 years, driven in part by biofuel policies.

Global use of major commodities

Over the next decade, growth in demand for vegetable oils will be limited by the stagnation and decline of biodiesel consumption in the two main markets, the United States and the European Union.

Food demand for vegetable oils is also expected to slow as high-income countries and some emerging economies, including China, approach saturation levels.

Given the limited growth in per capita demand for most commodities, population growth will be the main determinant of overall demand growth over the next decade.

Basic products

Therefore, most of the additional demand will originate in regions with high population growth, such as Sub-Saharan Africa, South Asia, the Near East and North Africa.

The only exception is dairy products, whose growth in demand will be driven mainly by the increase in per capita consumption of fresh dairy products in India.

The demand for agricultural products includes both food and non-food uses.

Perspective

For most agricultural commodities, global demand for food use is the main component of overall demand.

However, non-food uses, mainly feed and fuel, are important for several commodities and have grown faster than food use over the last decade.

Over the next ten years, the proportion of different uses per product is not expected to change significantly, as no major change in consumption is expected.

On the one hand, food will continue to be the main use for rice, wheat, legumes, roots and tubers, and sugar, as well as for all animal products.

For its part, feed will continue to be the predominant use of coarse grains and oilseeds.

 

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