The OECD-FAO Agricultural Outlook Global Trends in Commodity Markets by Pavel Vavra

Transcription

1 The OECD-FAO Agricultural Outlook Global Trends in Commodity Markets by Pavel Vavra Power Point Presentation for the International Agricultural Trade Research Consortium Analytic Symposium Confronting Food Price Inflation: Implications for Agricultural Trade and Policies June 22-23, 2009 Seattle, Washington

2 Organisation for Economic Cooperation & Development The OECD-FAO Agricultural Outlook Global Trends in Commodity Markets Pavel Vavra Trade and Agriculture Directorate Confronting Food Price Inflation: Implications for Agricultural Trade and Policies IATRC, June 22-23, 2009, Seattle, Washington Trade & Agriculture Directorate 1

3 OECD-FAO Outlook Highlights of medium-term agricultural outlook i. Price projections ii. Commodity markets developments Sensititivity to assumptions Issues and uncertainties Trade & Agriculture Directorate 2

4 OECD-FAO Outlook Agricultural Outlook - a set of conditional projections published in an OECD-FAO annual report The datasets are available at Trade & Agriculture Directorate 3

5 Main commodity projections Agriculture more resilient to global crisis than other sectors Commodity prices in real terms to remain at or above levels Crop prices have strongest gains; 10-20% on average Production increases in the range of 10 to 40% Developing countries driving the global demand and trade gains Expansion of biofuels largely driven by mandates Trade & Agriculture Directorate 4

6 Outlook for world prices Crops Trade & Agriculture Directorate 5

7 Outlook for world prices Crops Trade & Agriculture Directorate 6

8 Outlook for world prices Meat and Dairy Trade & Agriculture Directorate 7

9 Outlook for world prices Meat and Dairy Trade & Agriculture Directorate 8

10 Prices in real terms: Is there a trend decline? Trade & Agriculture Directorate 9

11 Most commodity prices at higher average levels Changes to average price levels (in real terms) % changes relative to average Wheat Coarse grains Rice Oilseed Veget. Oil Raw sugar Beef Pigmeat (pacific) (pacific) Butter SMP Crude oil Average Average Trade & Agriculture Directorate 10

12 Wheat Coarse grains Rice Oilseeds Oilmeals Veget. Oils Sugar Beef Pigmeat poultry Butter Cheese WMP SMP Steady growth of global production 50 Production Growth from average to 40 % Trade & Agriculture Directorate 11

13 Wheat Coarse grains Rice Oilseeds Oilmeals Veget. Oils Sugar Beef Pigmeat poultry Butter Cheese WMP SMP Steady growth of global production 50 Production Growth from average to 40 Growth realised until 2008 Growth from 2008 to % Trade & Agriculture Directorate 12

14 Higher trade gains in developing countries 60 Export growth from average to % Wheat Coarse grains Oilseeds Sugar Pigmeat Poultry SMP OECD Non-OECD World Trade & Agriculture Directorate 13

15 Higher Ethanol Prices in Longer Run Trade & Agriculture Directorate 14

16 Biodiesel Prices to rise, more slowly after 2012 Trade & Agriculture Directorate 15

17 World OECD Non- OECD Food remains the main use for wheat + 34 Mt Food use Feed use Biofuels Other Million tonnes Trade & Agriculture Directorate 16

18 World OECD Non- OECD Food remains the main use for wheat + 34 Mt Food use Feed use Biofuels Other Wheat Use Shares World () 2% Million tonnes 9% 18% 71% Trade & Agriculture Directorate 17

19 World OECD Non- OECD while feed and fuel push coarse grain demand up + 50 Mt Food use Feed use Biofuels Other Million tonnes + 90 Mt Trade & Agriculture Directorate 18

20 World OECD Non- OECD while feed and fuel push coarse grain demand up Demand Shares () - OECD 11% 8% 24% + 50 Mt 56% Food use Feed use Biofuels Other Demand 400 Shares 500 () 600 World 700 Million tonnes 12% 13% 19% 56% Trade & Agriculture Directorate 19

21 Biodiesel increasingly important demand driver for vegetable oil Indonesia USA EU non-biofuel use biofuel use + 90 Mt Million tonnes Trade & Agriculture Directorate 20

22 Biodiesel increasingly important demand driver for vegetable oil Indonesia USA EU non-biofuel use 20% Demand shares - WORLD () + 90 Mt biofuel use 80% Million tonnes Trade & Agriculture Directorate 21

23 thousand tonnes Driven by economic growth, meat consumption increases especially in developing countries Sheep Poultry Pork Beef OECD non-oecd WORLD Trade & Agriculture Directorate 22

24 Large differences in milk production gains European Union India USA China Russia Pakistan Brazil New Zealand Ukraine Australia Mexico Argentina million tonnes Trade & Agriculture Directorate 23

25 million tonnes Outlook for dairy products consumption 25 OECD non-oecd Butter Cheese SMP WMP Trade & Agriculture Directorate 24

26 Underlying macroeconomic assumptions uncertain Economic projections changing monthly Energy prices important but highly uncertain Credit markets in turmoil Timing/speed of recovery critical Trade & Agriculture Directorate 25

27 Lower income growth impacts livestock products more 0-2 Wheat Maize Rice Oilseeds Oilmeals Beef Pork Butter Cheese -4-6 % Feed Trade & Agriculture Directorate 26

28 USD per barrel World oil prices still relatively high and Outlook 2008 Outlook 2009 Trade & Agriculture Directorate 27

29 US$ per barrel increasingly more volatile WTI av. Brent av Trade & Agriculture Directorate 28

30 Impact of higher oil prices on commodity prices Trade & Agriculture Directorate 29

31 Key Issues and Uncertainties Traditional uncertainties: Weather and economic stability Developments in trade and domestic policies Increased price volatility? Biofuels policies and biofuel developments The key question is supply response Price transmission to local markets Technological progress Need to address climate change/water availability/sustainability Trade & Agriculture Directorate 30

32 Thank You Trade & Agriculture Directorate 31