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OECD and FAO see end of high agricultural prices

Staff Writer |
The recent period of high agricultural commodity prices is most likely over, say the OECD and FAO in their latest 10-year Outlook.

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But the two organisations warn of the need to be vigilant as the probability of a major price swing remains high.

The OECD-FAO Agricultural Outlook 2016-2025 projects inflation-adjusted agricultural commodity prices will remain relatively flat overall in the coming decade. However, livestock prices are expected to rise relative to those for crops.

As incomes improve, especially in emerging economies, demand for meat, fish and poultry will demonstrate strong growth. This creates additional demand for feed, particularly from coarse grains and protein meals, causing their prices to rise prices relative to food staples such as wheat and rice.

Globally, the increased demand for food and feed for a growing and more affluent population is projected to be mostly met through productivity gains. Yield improvements are expected to account for about 80 percent of the increase in crop output.

According to baseline analysis made in the Outlook, under a "business as usual" scenario - in which agricultural productivity grows at the current trend rate and no major action is taken to reduce hunger - projected growth in food availability would result in a reduction in the number of undernourished people in the world from around 800 million now to under 650 million in 2025.

The analysis indicates that in sub-Saharan Africa the rate of undernourishment would decline an estimated 23 to 19 percent - but because of rapid population growth the region would still account for a rising share of the world's population suffering from hunger.


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