Population growth rate to decline and income expansion to slow
The OECD and FAO prediction that the global population growth rate is to decline and income expansion is to slow, among other issues, will have some broad reaching impacts on Saskatchewan’s economy given we export food (crops and fertilizer/potash) and fuel (oil/uranium).
Full report, 4-page flyer, and executive summary to the report can be found here.
- 5 Jul 2016
- The StarPhoenix
- MANISHA JHA AND ISIS ALMEIDA Bloomberg
Global food prices to stagnate as population rates decline
LONDON Food prices will stagnate over the next decade as the population growth rate declines and income expansion slows in emerging economies.
Food costs will stabilize at a level slightly higher than in the years before the 2007-08 price spike, the Organization for Economic Cooperation and Development and the United Nations’ Food & Agriculture Organization said in a joint report.
Population growth, the main driver of food prices, will slow to one per cent annually through 2025, the organizations said.
Global food costs have more than doubled since 2000 as population expanded and rising incomes meant more demand for meat, FAO data showed. Costs reached a record in 2011, prompting Cargill Inc., one of the world’s largest crop traders, to call it the end of an era of falling agricultural commodity prices.
But, with global food supplies set to match demand in the 10 years to 2025, prices will stagnate once inflation is excluded, according to the report.
Global cereal production is projected to grow 12 per cent by 2025, while usage is projected to expand 14 per cent.
In nominal terms, agricultural commodity prices will rise as oil is forecast to increase to US$83.20 a barrel in 2025, the organizations said.
Demand growth for meat, fish and dairy products will grow “relatively strongly,” boosting the need for coarse grains such as corn and protein meals including soybean meal, this year’s best-performing commodity, the organizations said.
Lower energy prices and more “conservative” policies in many countries will mean crop demand for biofuels production will remain little changed.
Global food demand will be met mainly by an advance in productivity, with yield improvements expected to account for 80 per cent of crop output increases, according to the report