Martin von Lampe Trade and Agriculture Directorate, OECD

Transcription

1 Organisation for Economic Cooperation and Development Uncertainties in the Macro-Economic Environment Implications for Medium-Term Perspectives for Agricultural Markets Martin von Lampe Trade and Agriculture Directorate, OECD Conference on Prices and Market Risks: Farmers Faced with Volatility Centre de conférences Pierre Mendès France Paris France, November 23-24, 2009 Trade & Agriculture Directorate 1

2 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 2

3 Key macroeconomic assumptions 2009 global economic recession 2010 global economic recovery 2% annual inflation in OECD; higher in BRICs stronger US dollar stable policy regime crude oil prices increasing from end-2008 low Trade & Agriculture Directorate 3

4 Real prices at or above historical levels % change 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 4

5 Steady growth of global production Production Growth from average to 2018 World Production Non-OECD Production 40 % Wheat Coarse grains Rice Oilseeds Veget. Oils Sugar Beef Pigmeat Poultry Butter Cheese WMP Trade & Agriculture Directorate 5

6 Biodiesel increasingly important demand driver for vegetable oil USA EU Demand shares - WORLD (2018) 20% Indonesia non-biofuel use biofuel use + 90 Mt 80% Million tonnes Trade & Agriculture Directorate 6

7 while feed and fuel push coarse grain demand up Demand Shares (2018) - OECD OECD Non- OECD % 11% 8% + 50 Mt 56% Food use Feed use Biofuels Other Million tonnes Demand Shares (2018) World World % 13% 19% 56% Trade & Agriculture Directorate 7

8 Underlying macroeconomic assumptions uncertain Economic projections have changed a lot Timing/speed of recovery critical Energy prices important but highly uncertain Role of exchange rates Credit markets in turmoil Trade & Agriculture Directorate 8

9 How sensitive are agricultural markets to changes in the macro environment? 1. The impact of alternative GDP projections 2. The impact of alternative crude oil prices 3. The impact of alternative exchange rates Trade & Agriculture Directorate 9

10 Annual change in real GDP 8% 7% 6% 5% 4% 3% 2% 1% 0% -1% -2% -3% -4% Growthprojections revisedregularlyregularly Revisions of GDP growth March 2009 vs. Dec OECD: Base OECD: Lower GDP slow recovery Non-OECD: Base Non-OECD: Lower GDP slow recovery Trade & Agriculture Directorate 10

11 Lower income growth impacts livestock prices more Trade & Agriculture Directorate 11

12 which is partly linked to income elasticities, but also to slower production adjustments Trade & Agriculture Directorate 12

13 so feed consumption has strong impact on crop use Trade & Agriculture Directorate 13

14 How sensitive are agricultural markets to changes in the macro environment? 1. The impact of alternative GDP projections 2. The impact of alternative crude oil prices 3. The impact of alternative exchange rates Trade & Agriculture Directorate 14

15 Oilpriceshighlyunpredictable US$ per barrel WTI Brent Trade & Agriculture Directorate 15

16 Oilpriceshighlyunpredictable US$ per barrel WTI Brent Trade & Agriculture Directorate 16

17 Oil price assumption relativelylow low 120 USD per barrel Outlook 2008 Outlook 2009 Trade & Agriculture Directorate 17

18 Impact of higher oil prices on commodity prices % Trade & Agriculture Directorate 18

19 Impact of higher oil prices on commodity prices -What is the relevance of biofuels? Medium-term impact of oil price at ~USD100 instead of USD70 14% Change in averag ge world prices, % 10% 8% 6% 4% 2% 0% Wheat Maize Veget. oils Agric. Production Costs Biofuel Price Impact Biofuel Demand Effect Note: Results not exactly comparable to those in previous slide as based on 2008 baseline Trade & Agriculture Directorate 19

20 How sensitive are agricultural markets to changes in the macro environment? 1. The impact of alternative GDP projections 2. The impact of alternative crude oil prices 3. The impact of alternative exchange rates Trade & Agriculture Directorate 20

21 What if the Euro was 10% weaker? What if the Dollar was 10% stronger? Trade & Agriculture Directorate 21

22 What if the Euro was 10% weaker? What if the Dollar was 10% stronger? Trade & Agriculture Directorate 22

23 Conclusions Agriculture relatively resilient to changes in economic prospects compared to other sectors Food as necessity Larger sensitivity for livestock markets than for crop markets Crude oil prices are increasingly important for agricultural markets Agricultural production costs Demand as energy carrier Exchange rates remain crucial Trade & Agriculture Directorate 23

24 Thank You Trade and Agriculture Directorate Visit our website: Contact: Trade & Agriculture Directorate 24