As demand slows and production increases, food prices may fall next year | Agriculture News

The United Nations and the Organization for Economic Co-operation and Development stated in a report that inflation-adjusted prices may ease somewhat and then remain basically the same by 2030.

According to data from the Organization for Economic Cooperation and Development and the United Nations, as demand growth slows and output increases, consumers may get some respite from soaring food prices in the next few years.

Due to China’s huge demand and weather problems, an indicator of global food costs has jumped to a nine-year high, compressing consumer budgets that have been damaged by the Covid-19 crisis. But in the next few years, the OECD and the United Nations stated in a report that as the growth in demand for grains and fish slows and the supply of agriculture increases, inflation-adjusted prices may fall, and then in 2030 It was basically the same before the year.

Maximo Torero, chief economist of the Food and Agriculture Organization of the United Nations, said in a webinar on Monday: “The fundamentals do not tell us that we are entering a super cycle of commodity prices.” “Demand growth. Will go down.”

The year-long increase in food prices has increased the cost of everything from pizza dough to meat and coffee. This may put more people into starvation and threaten the acceleration of inflation, which may prompt the central bank to tighten stimulus measures to stimulate economies that are still in recovery mode after the pandemic.

According to the OECD and the United Nations, demand for agricultural products is expected to grow by 1.2% annually in the next ten years, compared with 2.2% in the past ten years. Driven by investment in infrastructure and research and more efficient resource allocation in emerging economies and low-income countries, output may increase by 1.4%. However, due to environmental policy restrictions, production growth in North America, Western Europe and Central Asia will slow down.

These organizations said that in the short term, as countries lift blockades and relax travel restrictions, ease labor shortages and increase production, more farm workers will return.

Other highlights of the report:

• In the next ten years, global meat consumption per capita will increase by 0.3% annually. As consumers switch to more expensive meats, demand in high-income countries will stabilize.
• Due to health and environmental issues, more and more people will replace red meat with poultry and dairy products. It is estimated that by 2030, poultry will account for 41% of meat protein sources.
• In the next ten years, the livestock industry will promote a 4% increase in agricultural greenhouse gas emissions, and the agricultural sector needs to adopt new policy efforts to achieve the climate goals of the Paris Agreement.
• Due to the reduced demand for biofuels in the United States and the European Union, the growth of vegetable oil consumption may slow to one-third of the growth rate in the previous 10 years.