OECD-FAO Agricultural Outlook 2008-2017 - UV

Loading...

2008

OECD-FAO Agricultural Outlook 2008-2017

The full text of this book is available on line via these links: www.sourceoecd.org/agriculture/9789264045903 www.sourceoecd.org/industrytrade/9789264045903 Those with access to all OECD books on line should use this link: www.sourceoecd.org/9789264045903

OECD-FAO Agricultural Outlook 2008-2017

OECD-FAO Agricultural Outlook 2008-2017

This is the fourteenth edition of the Agricultural Outlook and the fourth time it has been prepared jointly by the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization of the United Nations (FAO). This edition covers the outlook for commodity markets during the 2008 to 2017 period, and brings together the commodity, policy and country expertise of both Organisations. The report analyses world market trends for the main agricultural products, as well as biofuels. It provides an assessment of agricultural market prospects for production, consumption, trade, stocks and prices of the included commodities. This Outlook was prepared in a period when agricultural and food prices have risen to record-high levels, at least in nominal terms. The report discusses the reasons for these price hikes and finds that some are of a temporary nature, notably adverse weather conditions in some key producing countries and regions, while others are likely to prove more durable. The Outlook concludes that prices are unlikely to be sustained at currently high levels and that farmers around the world will respond by boosting plantings and increasing supplies, with a return to more normal growing conditions in the main producing regions. However, it also points to growing feedstock demand from an increasing biofuel industry, sustained high oil prices, continued strong growth in food demand as incomes rise in emerging economies, and historically low global stocks as some of the factors that will keep prices higher on average than in the past decade, and possibly more volatile. The report provides a quantitative assessment of the main factors that will help sustain higher prices over the coming decade, and shows that growth in feedstock demand for biofuel production is one of the important ones. The projections and past trends are presented in the statistical annex, and can be viewed in more detail at the website www.agri-outlook.org. The market projections cover OECD countries, as well as other key agricultural players including India, China, Brazil, the Russian Federation and Argentina, and many other non-OECD countries and regions. In total, the projections encompass 39 countries and 19 regions. The projections are based on specific assumptions regarding global macroeconomic conditions; population growth; national agricultural, biofuel and trade policies; production technologies; and normal weather conditions. The Agricultural Outlook provides a picture of how agricultural markets could evolve in the coming decade given the underlying assumptions.

SourceOECD is the OECD online library of books, periodicals and statistical databases. For more information about this award-winning service and free trials ask your librarian, or write to us at [email protected]

2008

�����������������������

ISBN 978-92-64-04590-3 51 2008 10 1 P

-:HSTCQE=UYZ^UX:

2008

OECD-FAO Agricultural Outlook 2008-2017

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT The OECD is a unique forum where the governments of 30 democracies work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The Commission of the European Communities takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisation’s statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members.

THE FOOD AND AGRICULTURE ORGANIZATION (FAO) OF THE UNITED NATIONS The Food and Agriculture Organization of the United Nations leads international efforts to defeat hunger. FAO’s mandate is to raise levels of nutrition, improve agricultural productivity, better the lives of rural populations and contribute to the growth of the world economy. Serving both developed and developing countries, FAO acts as a neutral forum where all nations meet as equals to negotiate agreements and debate policy. FAO is also a source of knowledge providing access to information in print and electronic format. We help developing countries and countries in transition modernize and improve agriculture, forestry and fisheries practices and ensure good nutrition for all. Since our founding in 1945, we have focused special attention on developing rural areas, home to 70 per cent of the world’s poor and hungry people. FAO’s activities comprise four main areas: putting information within reach; sharing policy expertise; providing a meeting place for nations; bringing knowledge to the field.

This work is published under the responsibilities of the Secretary-General of the OECD and the Director General of FAO. The views expressed and conclusions reached in this report do not necessarily correspond to those of the governments of OECD member countries, or the governments of the FAO member countries. The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

Also available in French under the title: Perspectives agricoles de l’OCDE et de la FAO 2008-2017 Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda.

© OECD/FAO 2008 © Gettyimages/Martin Ruegner OECD freely authorises the use, including the photocopy, of this material for private, non-commercial purposes. Permission to photocopy portions of this material for any public use or commercial purpose may be obtained from the Copyright Clearance Center (CCC) at [email protected] or the Centre français d'exploitation du droit de copie (CFC) [email protected] All copies must retain the copyright and other proprietary notices in their original forms. All requests for other public or commercial uses of this material or for translation rights should be submitted to [email protected]

FOREWORD

Foreword

T

his is the fourth time that the Agricultural Outlook report has been prepared jointly by the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization (FAO) of the United Nations. The report draws on the commodity, policy and country expertise of both Organisations in providing a longer-term assessment of future prospects in the major world agricultural commodity markets. The report is published annually, as part of a continuing effort to promote informed discussion of emerging market and policy issues. This edition of the Agricultural Outlook offers an assessment of agricultural markets covering cereals, oilseeds, sugar, meats, milk and dairy products over the period 2008 to 2017. For the first time, it also includes an analysis of and projections for global biofuel markets for bioethanol and biodiesel, facilitating the discussion of interactions between these markets and those for the main agricultural feedstocks used in their production. The market assessments for all the commodities are based on a set of projections that are conditional on specific assumptions regarding macroeconomic factors, agricultural and trade policies and production technologies; they also assume average weather conditions and longer-term productivity trends. Using the underlying assumptions, the Agricultural Outlook presents a plausible scenario for the evolution of agricultural markets over the next decade and provides a benchmark for the analysis of agricultural market outcomes that would result from alternative economic or policy assumptions. This year’s Outlook is set against a backdrop of exceptional increases in prices for many agricultural commodities, and this has posed a considerable challenge in preparing the projections and assessing the “durability” of the various influences shaping these prices. That is, which of the factors that are driving up prices are temporary and which will prove to be more permanent influences? How will they individually and collectively affect price levels, price trends and price volatility in the future? How will markets react to currently high prices and a more uncertain price outlook? What are the appropriate policy responses? This report comes at a very timely moment and provides important information, with a view to enlightening the discussion on food-price increases, their causes and their likely consequences for agricultural markets as well as for the policyformulation process. The projections and assessments provided in this report are the result of close co-operation between the OECD and the FAO Secretariats and national experts in member and some non-member countries, and thus reflect the combined knowledge and expertise of this wide group of participants. A jointly developed modelling system, based on the OECD’s Aglink and FAO’s Cosimo models, facilitated the assurance of consistency in the projections. The fully documented Outlook database, including historical data and projections, is available through the OECD-FAO joint Internet site www.agri-outlook.org. Within the OECD, this publication is prepared by the Trade and Agriculture Directorate, while at FAO, the Trade and Markets Division was responsible for the report.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

3

FOREWORD

Acknowledgements. This Agricultural Outlook was prepared by the following staff members of the OECD and FAO Secretariats: At the OECD, the team of economic and market analysts of the OECD Trade and Agriculture Directorate that contributed to this report consisted of Loek BOONEKAMP (team leader), Marcel ADENAUER, Céline GINER, Alexis FOURNIER, Franziska JUNKER, Garry SMITH, Pavel VAVRA (outlook co-ordinator) and Martin VON LAMPE. Research and statistical assistance were provided by Armelle ELASRI, Alexis FOURNIER, Claude NENERT and Nicolas RUIZ. Secretarial services and co-ordination in report preparation was provided by Christine CAMERON, Nina DHUMAL, Anita LARI and Stéfanie MILOWSKI. Technical assistance in the preparation of the Outlook database was provided by Frano ILICIC. Many other colleagues in the OECD Secretariat and member country delegations furnished useful comments on earlier drafts of the report. The contribution of Joe DEWBRE in reviewing and editing Chapter 2 of this report and Linda FULPONI in drafting Box 2.1 in that chapter is particularly acknowledged. At FAO, the team of economists and commodity officers from the Commodities and Trade Division contributing to this edition consisted of Abdolreza ABBASSIAN, El Mamoun AMROUK Concepcion CALPE, Kaison CHANG, Merritt CLUFF (team leader), Piero CONFORTI, Cheng FANG, Holger MATTHEY (baseline co-ordinator), Adam PRAKASH, Grégoire TALLARD, Peter THOENES, Koji YANAGISHIMA, and Carola FABI from the Statistics Division. AliArslan GURKAN and Alexander SARRIS initiated support for FAO’s Cosimo modelling project. Research assistance and database preparation was provided by Claudio CERQUILINI, Berardina FORZINETTI, John HEINE, Marco MILO, and Barbara SENFTER. Secretarial services were provided by Rita ASHTON. Chapter 2 of this report was drafted by Wyatt THOMPSON (University of Missouri) elaborating on and analysing input from the OECD and FAO Secretariats, Pierre CHARLEBOIS (Agriculture and Agrifood Canada), Frank ROSE (Lewis University, formerly CBOT) and Pat Westhoff (University of Missouri). Finally, the assistance of the Executive Director of the International Sugar Organisation, Peter Baron and his staff in reviewing the sugar projections is gratefully acknowledged.

4

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

TABLE OF CONTENTS

Table Table of of Contents contents Acronyms and Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

The Outlook in Brief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

15

Chapter 1. Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The principal underlying assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main trends in commodity markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main developments in trade in agricultural commodities . . . . . . . . . . . . . . . . . . . . . The outlook for world prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Some major issues and uncertainties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The policy issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . What are appropriate policy responses? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

17 19 21 27 29 31 32 33

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

34

Chapter 2. Are High Prices here to Stay? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Recent food commodity price hikes in an historical context . . . . . . . . . . . . . . . . . . . Crop and vegetable oil price changes: What happened and what happens next? . . . Uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . How important are the Outlook assumptions in determining future prices? . . . . . The bottom line . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

35 36 42 43 52 53 57

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

58

Chapter 3. Macroeconomic and Policy Assumptions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The main underlying assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

59 60

Chapter 4. Biofuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World market trends and prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main market developments – ethanol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main market developments – biodiesel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Key issues and uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67 68 69 74 78

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

81

Chapter 5. Cereals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World market trends and prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main market developments: Wheat and coarse grains . . . . . . . . . . . . . . . . . . . . . . . . Main market developments: Rice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Key issues and uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

83 84 86 91 95

Chapter 6. Oilseeds and Oilseed Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 World market trends and prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Main market developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Key issues and uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

5

TABLE OF CONTENTS

Chapter 7. Sugar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World market trends and prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main market developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Key issues and uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

107 108 109 119

Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122 Chapter 8. Meat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World market trends and prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main market developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Key issues and uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

123 124 126 134

Chapter 9. Dairy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World market trends and prospects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main market developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Key issues and uncertainties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

137 138 139 146

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . The generation of the OECD-FAO Agricultural Outlook . . . . . . . . . . . . . . . . . . . . . . . . Sources and assumptions for the macroeconomic projections . . . . . . . . . . . . . . . . . The representation of production costs in Aglink-Cosimo . . . . . . . . . . . . . . . . . . . . . Methodology and limitations of partial stochastic analysis . . . . . . . . . . . . . . . . . . . .

149 150 151 152 154

Annex A. Statistical Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 Annex B. Glossary of Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 220

6

Boxes 2.1. 2.2. 2.3. 4.1. 7.1. 8.1.

Measuring the impact of rising commodity prices on food prices . . . . . . . . . . . 37 Prices in cash and derivative markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 How income growth affects commodity demand . . . . . . . . . . . . . . . . . . . . . . . . . 50 The US Energy Independence and Security Act . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 EU sugar production downsising arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . 113 Distillers Grains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

Tables 1.1. 2.1. 2.2. 2.3. 2.4. 2.5. 2.6. 3.1. A.1. A.2. A.3. A.4. A.5. A.6.

Some decline in population growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Food price contribution to consumer price inflation (selected countries) . . . . . Supply of wheat and coarse grains. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Demand for wheat and coarse grains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Supply of oilseed and vegetable oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Demand for vegetable oil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World coarse grain, wheat and vegetable oil market indicator ratios . . . . . . . . Slow down in population growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Economic assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World trade projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main policy assumptions for cereal markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World cereal projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wheat projections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

19 40 43 45 46 47 49 62 158 160 162 166 169 170

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

TABLE OF CONTENTS

A.7. A.8. A.9. A.10. A.11. A.12. A.13. A.14. A.15. A.16. A.17. A.18. A.19. A.20. A.21. A.22. A.23. A.24. A.25. A.26. A.27. A.28. A.29. A.30. A.31. A.32. A.33. A.34.

Coarse grain projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rice projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main policy assumptions for oilseed markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . World oilseed projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oilseed projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Oilseed meal projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Vegetable oil projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main policy assumptions for sugar markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World sugar projections (in raw sugar equivalent) . . . . . . . . . . . . . . . . . . . . . . . . World sugar projections (in raw sugar equivalent) . . . . . . . . . . . . . . . . . . . . . . . . Main policy assumptions for meat markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World meat projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Beef and veal projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pig meat projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Poultry meat projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sheep meat projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main policy assumptions for dairy markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World dairy projections (butter and cheese). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World dairy projections (powders and casein) . . . . . . . . . . . . . . . . . . . . . . . . . . . . Butter projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cheese projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Skim milk powder projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Whole milk powder projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Milk projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Whey powder and casein projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Main policy assumptions for biofuels markets . . . . . . . . . . . . . . . . . . . . . . . . . . . Biofuels projections: ethanol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Biofuels projections: biodiesel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

172 174 176 178 179 181 183 185 187 188 190 192 194 196 198 200 202 204 205 206 208 210 212 214 215 216 218 219

Figures 1.1. 1.2. 1.3. 1.4. 1.5. 2.1. 2.2. 2.3. 2.4.

World commodity prices at higher average levels . . . . . . . . . . . . . . . . . . . . . . . . . Overall strong growth in world trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Growth in world exports dominated by developing countries. . . . . . . . . . . . . . . Outlook for world crop prices to 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Outlook for world livestock product prices to 2017 . . . . . . . . . . . . . . . . . . . . . . . . Food commodity prices, 1971-2007 with projections to 2017 . . . . . . . . . . . . . . . . Food expenditure shares and per capita income . . . . . . . . . . . . . . . . . . . . . . . . . . Deviations from trend of wheat and coarse grain yields . . . . . . . . . . . . . . . . . . . Stocks-to-use ratios of maize and wheat . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

18 27 28 29 29 36 39 44 49

2.5. Sensitivity of projected world prices to changes in five key assumptions, percentage difference from baseline values, 2017 . . . . . . . . . . . . . . . . . . . . . . . . . 2.6. Stochastic crop prices in 2008 and 2017 in nominal terms. . . . . . . . . . . . . . . . . . 3.1. Lower GDP growth in selected countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2. Despite an increase in some countries, inflation expected to remain under control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3. US dollar strengthening against most other currencies . . . . . . . . . . . . . . . . . . . . 4.1. Production costs of major biofuel chains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2. World ethanol projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

54 56 61 63 64 68 69

7

TABLE OF CONTENTS

4.3. 4.4. 4.5. 4.6. 4.7. 4.8. 4.9. 4.10. 4.11. 4.12. 4.13. 4.14. 5.1. 5.2. 5.3. 5.4. 5.5. 5.6. 5.7. 5.8. 6.1. 6.2. 6.3. 6.4. 7.1. 7.2. 7.3. 7.4. 7.5. 7.6. 7.7. 7.8. 7.9. 7.10. 7.11. 7.12. 7.13. 8.1. 8.2. 8.3. 8.4.

8

EU ethanol market projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Canadian ethanol market projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US ethanol market projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brazil ethanol market projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World biodiesel projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . EU biodiesel market projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Canadian biodiesel market projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US biodiesel market projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brazil biodiesel market projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Indonesia biodiesel market projections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Malaysia biodiesel market projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Potential impact of the US EISA on world commodity prices, 2013-17 average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nominal wheat, coarse grain and rice prices to remain relatively strong, increase in real prices compared to the last decade . . . . . . . . . . . . . . . . . . . . . . . Growing cereal demand inside and outside the OECD . . . . . . . . . . . . . . . . . . . . . Variety share of coarse grains shifts towards maize . . . . . . . . . . . . . . . . . . . . . . . Stock levels stay low in historical perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . Wheat trade increases moderately. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sharp increase in coarse grain exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Per capita rice food consumption expected to decrease, total use increases . . World rice stocks to be partly rebuilt prices to fall after peak . . . . . . . . . . . . . . . Vegetable oil prices and oilseed prices to remain strong over the projection period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Demand for vegetable oil is growing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Growing world oilseed production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Evolution of vegetable oil trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World sugar prices to recover in near term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . World sugar prices to trend down in real terms . . . . . . . . . . . . . . . . . . . . . . . . . . Larger sugarcane production to account for most of the additional sugar output. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Changing regional patterns of sugar consumption to 2017 . . . . . . . . . . . . . . . . . The global stock-to-use ratio to decline in the near term. . . . . . . . . . . . . . . . . . . EU sugar reform leads to lower production and exports. . . . . . . . . . . . . . . . . . . . Sugar and ethanol production and exports to increase rapidly in Brazil . . . . . . Global sugar exports are increasingly dominated by Brazil . . . . . . . . . . . . . . . . . Net sugar imports of Russia continue to decline . . . . . . . . . . . . . . . . . . . . . . . . . . The EU and China emerge as the largest sugar importers . . . . . . . . . . . . . . . . . . Preferential imports to increase in the EU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Share of developing countries in world sugarcane area devoted to ethanol . . . US rising sugar imports, CCC stocks and HFCS exports . . . . . . . . . . . . . . . . . . . . World prices for meat to strengthen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Continued expansion in world meat production . . . . . . . . . . . . . . . . . . . . . . . . . . Regional distribution of meat production increases between 2005-07 and 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Contribution of different meats to production increases between 2005-07 and 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

70 71 71 72 74 75 75 76 77 77 78 80 86 87 88 89 90 91 93 94 98 99 102 104 109 110 110 111 112 114 115 116 116 117 120 121 122 126 127 128 128

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

TABLE OF CONTENTS

8.5. 8.6. 8.7. 8.8. 8.9. 8.10. 9.1. 9.2. 9.3. 9.4. 9.5. 9.6. 9.7. 9.8.

Composition of per capita meat consumption in 2017 compared to 2005-07 . . Shares of different meat types in growth of consumption . . . . . . . . . . . . . . . . . . Egg consumption in selected regions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Development of world meat exports (excluding live animals). . . . . . . . . . . . . . . Major meat net importing countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LDCs lose ground in trade for meat products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prices to remain firm over the projection period . . . . . . . . . . . . . . . . . . . . . . . . . . Prices in real terms 20% to 40% above historical averages . . . . . . . . . . . . . . . . . . Milk production growth from 2005-07 to 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . United States overtake New Zealand in SMP exports . . . . . . . . . . . . . . . . . . . . . . Major dairy product exporters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Major dairy product importers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Outlook for global dairy product consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sustained growth for butter and cheese consumption over 2008-2017 . . . . . . .

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

129 130 131 132 133 133 140 140 142 143 143 144 145 146

9

ACRONYMS AND ABBREVIATIONS

Acronyms and Abbreviations ACP AMAD AUSFTA AI BNGY BNLY BSE Bt BTL CAFTA CAP CCC CET CIS CPI CRP CMO Cts/lb cwe DBES DDA DDG dw EBA ECOWAP ECOWAS EISA Act EPAs ERS est E85 EU EU-15 EU-10 EU-27 FAO

African, Caribbean and Pacific countries Agricultural Market Access Database Australia and United States Free Trade Agreement Avian Influenza Billion gallons per year Billion litres per year Bovine Spongiform Encephalopathy Billion tonnes Biomass to liquid Central American Free Trade Agreement Common Agricultural Policy (EU) Commodity Credit Corporation Common External Tariff Commonwealth of Independent States Consumer Price Index Conservation Reserve Program of the United States Common Market Organisation for sugar (EU) Cents per pound Carcass weight equivalent Date-based Export Scheme Doha Development Agenda Dried Distiller’s Grains Dressed weight Everything-But-Arms Initiative (EU) West Africa Regional Agricultural Policy Economic Community of West African States Energy Independence and Security Act of 2007 (US) Economic Partnership Agreements (between EU and ACP countries) Economic Research Service of the US Department for Agriculture Estimate Blends of biofuel in transport fuel that represent 85 percent of the fuel volume European Union Fifteen member states of the European Union Ten new member states of the European Union from May 2004 Twenty seven member states of the European Union (including Bulgaria and Romania from 2007) Food and Agriculture Organization of the United Nations

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

11

ACRONYMS AND ABBREVIATIONS

FMD FOB FR FSRI ACT FTA GDP G-10 G-20 GDPD GHG GMO HFCS HS IEA kt LAC La Niña LDC’s LICONSA lw MERCOSUR MFN Mha MPS Mt MTBE NAFTA OECD OIE PCE PIK PROCAMPO PPP PRRS PSE pw R&D rse rtc RFS rwt SEAC SFP SMP SPS STRV

12

Foot and Mouth Disease Free on board (export price) Federal Reserve (US central bank) Farm Security and Rural Investment Act (US) of 2002 Free Trade Agreement Gross Domestic Product Group of 10 countries (see Glossary) Group of 20 developing countries (see Glossary) Gross Domestic Product Deflator Green House Gases Genetically modified organism High Fructose Corn Syrup Harmonised Commodity Description and Coding System International Energy Agency Thousand tonnes Latin America and the Caribbean Climatic condition associated with temperature of major sea currents Least Developed Countries Leche Industralizada Live weight Common Market of the South Most Favoured Nation Million hectares Market Price Support Million tonnes Methyl Tertiary Butyl Ether North American Free Trade Agreement Organisation for Economic Co-operation and Development World Organisation for Animal Health Private Consumption Expenditure Payment in kind programme (US) Mexican Farmers Direct Support Programme Purchasing Power Parity Porcine Reproductive and Respiratory Syndrome Producer Support Estimate Product weight Research and Development Raw sugar equivalent Ready to cook Renewable Fuels Standard in the US, which is part of the Energy Policy Act of 2005 Retail weight Spongiform Encephalopathy Advisory Committee Single Farm Payment scheme (EU) Skim milk powder Sanitary and Phytosanitary measures Short Tons Raw Value

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ACRONYMS AND ABBREVIATIONS

t t/ha TRQ UK UN URAA UNCTAD US USDA VAT v-CJD WAEMU WMP WTO

Tonnes Tonnes/hectare Tariff rate quota United Kingdom The United Nations Uruguay Round Agreement on Agriculture United Nations Conference on Trade and Development United States of America United States Department of Agriculture Value added tax New Creutzfeld-Jakob-Disease West African Economic and Monetary Union Whole milk powder World Trade Organisation

Symbols AUD ARS Bn BRL CAD CNY EUR gal Ha hl INR

Dollars (Australia) Pesos (Argentina) Billion Real (Brazil) Dollars (Canada) Yuan (China) Euro (Europe) Gallons Hectare Hectolitre Indian rupees

KRW lb Mn MXN NZD p.a RUR THB USD ZAR

Korean won Pound Million Mexican pesos Dollars (New Zealand) Per annum Ruble (Russia) Thai baht Dollars (United States) South African rand

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

13

THE OUTLOOK IN BRIEF

THE OUTLOOK IN BRIEF ●

World reference prices in nominal terms for almost all agricultural commodities covered in this report are at or above previous record levels (see Fig. 2.1). This will not last and prices will gradually come down because of the transitory nature of some of the factors that are behind the recent hikes. But there is strong reason to believe that there are now also permanent factors underpinning prices that will work to keep them both at higher average levels than in the past and reduce the long-term decline in real terms. Whether transitory or permanent, appropriate policy action for agricultural development and for addressing the needs of the hungry and the poor needs to take account of both these characteristics.



The dramatic increase in prices since 2005/06 is partly the result of adverse weather conditions in major grain-producing regions in the world, with spill-over effects on crops and livestock that compete for the same land. In a context of low global stocks, these developments alone would have triggered strong price reactions. These conditions are not new; they have happened in the past and prices have come down once more normal conditions prevail and supply responds over time. The Outlook sees no reason to believe that this will not recur over the next few years.



Once they have fallen from their current peaks, however, prices will remain at higher average levels over the medium term than in the past decade. But the underlying forces that drive agricultural product supply (by and large productivity gains) will eventually outweigh the forces that determine stronger demand, both for food and feed as well as for industrial demand, most notably for biofuel production. Consequently, prices will resume their decline in real terms, though possibly not by quite as much as in the past (see Figures 1.1, 1.4 and 1.5 in the Overview section).



On the supply side, the Outlook expects continued yield growth for crops to be more important than new areas brought into cultivation in determining crop supply. Slowly increasing dairy and livestock yields also support the increase in milk and meat production. A key assumption in the Outlook is some strengthening of the US dollar against most currencies. In the countries affected by this change, this will reinforce domestic price incentives to increase production. These factors combine to sustain the growth of global agricultural production, although some of that impetus is abated by the supply-reducing effect of high oil prices that raise production costs.



On the demand side, changing diets, urbanisation, economic growth and expanding populations are driving food and feed demand in developing countries. Globally, and in absolute terms, food and feed remain the largest sources of demand growth in agriculture. But stacked on top of this is now the fastgrowing demand for feedstock to fuel a growing bioenergy sector. While smaller than the increase in food and feed use, biofuel demand is the largest source of new demand in decades and a strong factor underpinning the upward shift in agricultural commodity prices.



As a result of these dynamics in supply and demand, the Outlook suggests that commodity prices – in nominal terms – over the medium term will average substantially above the levels that prevailed in the past 10 years. When the average for 2008 to 2017 is compared with that over 1998 to 2007, beef and pork prices may be some 20% higher; raw and white sugar around 30%; wheat, maize and skim milk powder 40 to 60%; butter and oilseeds more than 60% and vegetable oils over 80%. Over the Outlook period, prices will resume their decline in real terms, albeit at a slower rate. However, the impact of various supply and demand factors on prices will differ across commodities.



In addition, prices may also be more volatile than in the past: stock levels are not expected to be replenished substantially over the Outlook; demand is becoming less sensitive to price changes at the farm level as the commodity share in the final food bill falls and as industrial demand grows; weather conditions and agricultural product supply may become more variable with climate change; and speculative non-commercial investment funds enter or leave agricultural futures markets as profit opportunities dictate.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

15

THE OUTLOOK IN BRIEF



Within this overall context, the epicentre of global agriculture will further shift from the OECD towards developing countries. Both consumption and production are growing faster in developing countries for all products except wheat. By 2017, these countries are expected to dominate production and consumption of most commodities, with the exception of coarse grains, cheese, and skim-milk powder.



Corresponding shifts are also occurring in global trade patterns. Imports are growing most in developing countries, and an increasing share of this growth is captured by larger exports from other emerging and developing countries. Export growth in developing countries is greater, and sometimes very much so for almost all products. However, while the share of OECD countries in world exports falls, these countries continue to dominate export trade for wheat, coarse grains, pork and all dairy products.



High prices are good for some and bad for others. They are beneficial for many commercial producers in both developed and developing countries. However, many farmers in developing countries are not linked to markets and will draw little or no benefit from currently higher prices. But the poor, and in particular the urban poor in net food importing developing countries, will suffer more. In many low-income countries, food expenditures average over 50% of income and the higher prices contained in this Outlook will push more people into undernourishment.



For the Least Developed Countries, especially the food-deficit group, the projections thus show greatly increased vulnerability and uncertain food supplies during an era of high commodity prices and high price volatility. This underscores the importance of developing their domestic supply capacity by improving the overall environment in which agriculture operates through enhancing governance and administrative systems and investing in education, training and extension services, research and development and physical infrastructure. While these are longer-term remedies, it is important in the short term that commodity trade functions efficiently to facilitate the allocation of available commodity supplies.



This Outlook assumes unchanged agricultural and trade policies. The actual evolution of agricultural commodity and food prices, however, hinges importantly on future policy developments. In this context, increased humanitarian aid is needed to reduce the negative impact of high prices on the very poor, and this could be done without any major impact on markets.



Such effects would result, however, from trade-restricting policies such as export taxes and embargos. These may in the short term provide some relief to domestic consumers but in fact impose a burden on domestic producers and limit their supply response, as well as contribute to global commodity market uncertainty. Similarly, measures to protect domestic producers of agricultural commodities through border measures imposes a burden on domestic consumers; it would also restrict growth opportunities for producers abroad.



Policy support, as well as oil-price developments, will strongly influence the evolution of future demand from biofuel for agricultural commodity feedstocks. In this context, neither the US Energy Independence and Security Act (EISA) nor proposals for a new EU bioenergy directive are taken into account. Changes in either, or new technological developments would also have a strong impact on projected world prices for agricultural commodities and for the availability for food and feed use. In this report, second generation biofuels are not expected to be produced on a commercial basis over the Outlook period.



Finally, over the longer term, agricultural supply is facing increased uncertainties and limitations to the amount of new land that can be taken into cultivation. Public and private investments in innovation and increasing agricultural productivity, particularly in developing countries, would greatly improve supply prospects by helping to broaden the production base and lessen the chance of recurring commodity price spikes.



This year’s Outlook has been prepared in an environment characterised by increased instability in financial markets, higher food price inflation, signs of weakening global economic growth and foodsecurity concerns. Although projections for agricultural commodity markets have always been subject to a number of uncertainties, these have taken on more importance in this year’s edition.

16

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ISBN 978-92-64-04590-3 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 © OECD/FAO 2008

Chapter 1

Overview

17

1. OVERVIEW

T

his version of the OECD-FAO Agricultural Outlook is set against a background where world reference prices for most agricultural commodities covered in this report are at or above previous record levels, at least in nominal terms. While some of the reasons for these high prices are transitory, there is strong reason to believe that there are now also permanent factors underpinning prices that will work to keep them at higher average levels than in the past (Figure 1.1).

Figure 1.1. World commodity prices at higher average levels Nominal

Real

Per cent growth between : average 2008-2017 and average 1998-2007 100 80 60 40 20 0 -20 Wheat

Coarse grains

Rice

Butter

Cheese

SMP

Oilseeds

Veget. oils

Beef (Pacific)

Pigmeat (Pacific)

Raw sugar

1 2 http://dx.doi.org/10.1787/383556825413 Source: OECD and FAO Secretariats

The Outlook paints a picture of a further gradual shift in the epicentre of agricultural production, consumption and trade from OECD to developing countries. This happens against a backdrop of record high prices of almost all agricultural products at the beginning of the Outlook. The Outlook indicates that current price levels can be explained by both transitory and permanent factors. There is strong reason to suspect that the more permanent factors will result in a structural upward shift in real agricultural commodity prices. But from these sometimes substantially higher average levels, when compared to the past decade, real prices will again begin to decline, though at a more gradual rate than in the past. The Outlook is set in a context of assumed sustained economic growth around the globe, high crude oil prices, contained inflation, constant real exchange rates and unchanged policies. Markets are assumed not to be influenced by “abnormal” weather conditions, and any possible impacts of climate change and water shortages are not considered. Deviations from these assumed conditions would lead to potentially much different market outcomes.

18

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

1.

OVERVIEW

The principal underlying assumptions Lower but sustained economic and population growth underpins demand Economic activity at the beginning of the Outlook is slowing most notably in the US, the world’s leading economy. The slowdown in the US and some other OECD economies is occurring despite continuing robust economic conditions in many other parts of the world. Within this context, growth prospects for OECD countries in the short and longer term are just above 2% (annual average). Robust activity levels in the main emerging economies are projected to remain a major driver of global economic expansion in the near term. In the medium and longer term a modest deceleration is projected. China and India will remain growth leaders among developing countries, with substantial market expansion and GDP growth anticipated for both countries as they become further integrated into the global economy and world trade. Population dynamics are important determinants of the future global economic environment, directly affecting demand for agricultural commodities. Population growth over the next decade will decline relative to the last 10 years to an average of 1.1% annually to reach approximately 7.4 billion in 2017. The fastest population growth is expected in Africa (annual average above 2%), whereas in Europe, population is expected to essentially stabilise over the coming decade (Table 1.1).

Table 1.1. Some decline in population growth Average annual growth over 10 year period, percentage Population growth

World

1998-2007

2008-2017

1.23

1.12

Africa

2.37

2.21

Latin America and Caribbean

1.28

1.14

North America

1.01

0.88

Europe

0.30

0.10

Asia and Pacific

1.27

1.11

Oceania developed

1.18

0.92

1 2 http://dx.doi.org/10.1787/385000556483 Note: Average annual growth is the least-squares growth rate. Source: UN World Population Prospects (2006 Revision).

No major hike in inflation despite continued high oil prices Despite recent hikes in food prices, sustained global growth and world trade expansion, general price levels in many countries have remained remarkably stable. This situation has reinforced expectations that inflation in OECD countries will remain low over the longer term. Measured by the Private Consumer Expenditure (PCDE) deflator, inflation will remain low in the coming decade. For OECD countries as a whole, inflation is assumed to be just above 2% per year. High consumer price inflation continues to plague some emerging and developing countries such as the Russian Federation and India with levels above 5% per annum. Inflation in Russia is, nevertheless, expected to fall to less than half the prevailing rate during 2005-07. A significant decline is also assumed for Argentina, with inflation at below 5% per year. The world oil price assumption underlying this year’s Agricultural Outlook is based on that published in the OECD Economic Outlook n° 82 (December 2007). It assumes prices to slowly increase over the outlook period from USD 90 per barrel in 2008 to USD 104 per barrel by 2017. This does not exclude the possibility of substantial variations around these OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

19

1. OVERVIEW

levels througout the period or within any given year. However, future oil prices are a major uncertainty in the Outlook. Some analysts emphasise that high oil prices will slow demand, ultimately reducing the price of oil. Others argue that consumption, production and processing capacities are relatively inelastic in the short term, sustaining continued high, or even further increasing, prices. This year’s Agricultural Outlook is based on the high-price scenario. Pressure on oil prices has been maintained thus far as geopolitical tensions combine with processing capacity constraints to keep global supply from the major oil producers below effective demand.

Conditions remain favourable for further growth in biofuel production For the first time, this Outlook specifically includes projections for supply, demand, trade and prices of ethanol and biodiesel derived from agricultural feedstock. The main forces driving further growth in biofuel production are high crude oil prices and continued public support, in particular in OECD countries. However, the latest bioenergy policy changes in the EU and the US are not taken into consideration. Neither do the projections and the assessed impacts on commodity markets take account of the possibility of changes in production technologies. Such changes would modify the economics of biofuel production and affect the market and trade outcomes.

The US dollar is expected to strengthen against most currencies Under an assumption of constant real exchange rates, inflation differentials vis-à-vis the United States are the primary determinant of projections for exchange rates over the Outlook period. This implies a strengthening of the US dollar against most currencies, even if currently there are signs of a further weakening of the dollar in the short term. Over the course of the Outlook period, the euro exchange rate is projected to remain stable. However, very low levels of inflation in Japan relative to the United States mean that the Yen is expected to appreciate further. The currencies of high growth/high inflation countries such as Brazil, India, Turkey and South Africa will depreciate most over the medium term.

The Outlook reflects policies in place in early 2008 Agricultural and trade policies play an important role in both domestic and international markets for agricultural commodities and food products. While agricultural policies are becoming increasingly decoupled from production decisions, non-agricultural policies, such as those for instance with respect to energy, or the environment, are having a growing impact on the agri-food sector. Policies influence the composition and levels of both production and consumption, thereby creating (or sometimes correcting) market distortions and influencing prices. There is a tendency towards increased price responsiveness on the supply side with ongoing policy reform in some OECD countries. Also, relatively elastic supply and demand in a growing number of developing countries, coupled with an increasing share of these countries in world trade, is improving adjustments in agricultural markets. As in the past, this Outlook assumes constant policies over the period to 2017. This implies, notably, that any changes in the new US farm legislation to replace the current FSRI Act, or in the EU’s Common Agricultural Policy as a result of the scheduled “health check” or changes in trade policies reflecting a conclusion of the negotiation under the Doha Round, are not considered in this report. In addition, neither the US Energy Independence and Security Act (EISA) nor proposals for a new EU bioenergy directive have been taken into account. However, recently increased export taxes in Argentina are taken into consideration.

20

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

1.

OVERVIEW

Main trends in commodity markets Grain markets set to remain tight Despite record wheat and coarse grain crops in 2007/08 and a sustained moderate rise in production thereafter, grain markets are expected to remain tight in the period to 2017. The prolific demand for maize arising from the rapidly expanding ethanol sector in the United States has profoundly affected the coarse-grain market. By 2017, approximately 40% of the country’s maize crop could be destined for energy production. Growth in grainbased ethanol industries, in particular in North America and Europe, as well as rising feed requirements for flourishing livestock sectors, look set to further pressure the already critically low global grain stocks-to-use ratio over the course of the Outlook. Owing to currently low stocks and high prices there will be an incentive to plant more land for grain production. In addition to a foreseen sustained recovery in production in droughtstricken Australia, the area under cereals is projected to rise for a number of reasons. There will in particular be some reallocation of land from other crops in the main OECD producers such as Canada, the US or the EU. In addition, land is taken out of set-aside in the EU for 2008. Finally, new land will be taken into cultivation, particularly in South and Latin America, SubSaharan Africa and the Commonwealth of Independent States (CIS). However, overall there will be constraints in expanding new arable areas in many countries and competition for land and resources among grain and oilseed crops is set to intensify with those crops offering the highest returns gaining the most ground. As a result, beyond the initial years of the Outlook, much of the growth in world grain output is expected to stem from productivity gains, but yield growth is not expected to match the rate attained in the previous decade.

Grain trade to reach new heights Wheat exports have remained subdued in recent years, reflecting adverse weather in several important countries, especially in Australia and successively poor harvests in the EU. But global wheat trade is projected to expand at an average annual rate of less than 1% over the Outlook period. Australia is foreseen to resume the mantle of being the secondlargest wheat exporter after the United States. As for coarse grains, the recuperation of traditional export sources will be supplemented by an export expansion in Ukraine. Developing countries, such as those situated in South and East Asia, as well as Nigeria and Egypt, will continue to fuel global wheat demand. Saudi Arabia is also projected to become a major importer in view of the recent change in its policy to gradually phase out production subsidies. Although the Outlook projects expanding exports from OECD countries, most of the growth in import demand will be satisfied through larger shipments from emerging and developing countries, particularly Ukraine and Argentina. Rising per capita incomes and developing food markets are behind increased global demand that has outpaced domestic production capacity. But more generally, growth in per capita food consumption of wheat is expected to remain modest or even to decline, notably in China, as diets slowly shift towards more value-added processed foods given the strong rise in incomes. The growth in international demand for coarse grains will be predominantly driven by increased feed demand from thriving livestock industries in developing economies. Imports by these countries as a group are projected to grow to 94 million tonnes, representing nearly 75% of the world total, which compares to less than 70% over the base period.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

21

1. OVERVIEW

Productivity gains underpin rice supply Global rice production could expand on the order of 10% by the end of the Outlook, fuelled by larger crops in South and South-East Asian countries. The overall trend of rising output masks an expected fall in area, which gathers momentum from 2011-12 onwards, reflecting lower plantings in Asian countries due to rivalry with other crops and nonagricultural sectors for land, which leads to an intensification of competition for water and labour resources. Developed countries are also foreseen to plant less by 2017-18, as a reflection mainly of ongoing policies in Japan and the EU. Owing to the dissemination of improved varieties and better production practices, yield growth over the next decade will assume greater prominence in supporting the sector, and this is expected to surpass the growth witnessed over the previous 10-year period. Rice remains a basic food commodity, and its importance has extended beyond Asia. However, rapid income growth and diversification of diets is expected to depress per capita rice consumption, especially in Asia. In contrast, rice is expected to gain importance in African diets, where per capita consumption rises from 22 kg to more than 24 kg over the 10-year period. As a share of world production, rice trade is expected to fall slightly, indicating a lessening reliance on the global market that is consistent with a return to more stringent rice self-sufficiency policies in several countries. Much of the expansion in world imports is fuelled by demand in Africa and in Asia, with Thailand forecast to account for around one-third of all rice exports. The tendency for declining global rice stocks could be reversed over the course of the Outlook, as recent concerns over supply availability and price volatility foster a rebuilding of reserves.

Strong demand drives the oilseed complex Increasing world livestock production will continue to be the driving force behind the consumption of oilseed-derived protein meal, with most of the growth taking place in nonOECD countries. Comparing 2017 with the 2005-07 base period, oilseed meal consumption in the developing region will rise by almost 50%, with China accounting for roughly half the growth alone, to satisfy its burgeoning livestock sector. While the EU should continue to hold its position as the largest importer of oilseed meals, its import dependency is likely to fall as a growing proportion of the region’s protein meal consumption comes from domestically produced and crushed oilseeds, in particular rapeseed meal. Notwithstanding the foregoing world oilseeds crush is projected to be mainly driven by vegetable oil demand. Largely sustained by income growth, vegetable oils, both from oilseed crops and from palm, will remain the fastest growing commodity in terms of consumption covered in this Outlook. Most of the demand growth is for food use, but bioenergy mandates will play an increasing role. Over the Outlook period, again comparing 2017 with the 200507 base period, the derived demand for vegetable oil in biodiesel production could increase by 14.3 million tonnes, about one third of the total increase in global vegetable oil consumption. The use of vegetable oils for bioenergy purposes is expected to grow strongly, and may alter trade patterns and the consumption mix in diets in some countries depending on policies in place. This may be particularly the case in the EU, where bioenergy use of vegetable oils has been mostly oriented to the use of rapeseed oil and could reach over 8% of worldwide and 41% of domestic vegetable oil consumption by 2017. In addition, biodiesel industries are expected to develop in several other countries, notably in Canada and Australia. Emerging biodiesel production will increase the consumption of domestically produced palm oil in Indonesia and Malaysia and soyabean oil in Brazil at the expense of exports of vegetable oil or oilseeds originating from those countries.

22

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

1.

OVERVIEW

In addition to continued fast growth in feed use, biofuels look set to become a more significant long-term driver of the global oilseed complex, both directly through demand for vegetable oils in the bio-diesel production process and indirectly as increased cereal demand for ethanol production affects the relative prices of oilseeds and thereby the competition for arable land between these crops, especially in the United States. Furthermore, given the relative scarcity of maize, the share of oilmeals in total feed use may well be increasing over the Outlook period, even as a source for energy. Buoyed by higher relative prices, land reallocation from competing crops, diverted pasture lands and new arable land could pave the way for global oilseed output to expand by 28% by 2017 when compared to the base period. Much of the foreseen expansion will be concentrated in Brazil, the EU and Argentina. Bolstered by a differential export-tax system, Argentina looks set to consolidate its position as a regional hub for oilseed crushing, despite a slowdown in the expansion of domestic crushing capacity. The country is expected to reaffirm its status as the world’s major centre for shipments of soybean meal and oil, in a context of growing global import demand. China continues to import seeds and crush them domestically to capture the value added from processing oilseeds into protein meals and vegetable oil. Reflecting diminishing consumption growth, China’s crushing industry is expected to develop at an average rate of 3.5% per annum compared to 8.5% in the previous decade. By 2017, China will have become the world’s second-largest importer of oilseed meals and vegetable oils, after the EU, and it will have further reinforced its position as the leading importer of oilseeds. Brazil’s share of global oilseed exports is expected to grow from 30% in 2008 to almost 40% in 2017, when the country easily surpasses the United States as the world’s foremost oilseeds exporter.

Steadfast consumption growth and policy reform could lead to some tightening in sugar markets Brazil is and will remain the world’s leading sugar and ethanol producer and exporter, and the major centre of international price discovery for sugar. With the composition of Brazil’s private-vehicle fleet increasingly being dominated by flex-fuel vehicles over the Outlook period, the derived demand for sugar cane from ethanol is expected to surge over the projection period, especially in the context of high projected crude oil prices. As a result, the projected share of the sugarcane crop going to ethanol increases from 51% on average in 2005-07 to 66% in 2017-18. Nevertheless, this development is not expected to unduly constrain the amount of cane available for sugar production and sugar exports, since sugarcane production in Brazil is foreseen to rise by over 75% from the base period to 2017. However, in the wake of steadfast domestic and international demand, there will be a propensity for sugar prices to strengthen over the projection period. On the ethanol front, a number of other sugar producing countries are currently embarking on, or reinvigorating existing, renewable energy programmes, such as the EU, Japan, Malaysia, Indonesia, India, South Africa, Colombia, and the Philippines, particularly for use in the transport-fuel sector. Most of these fledgling fuel ethanol programmes, however, are expected to use molasses or starch sources rather than raw sugarcane juice as the preferred feedstock. As molasses is produced as a by-product of the sugar refining process, molasses-based bio-ethanol production should not greatly impair sugar production in these countries and may even stimulate further growth in cane and sugar output. Furthermore, in some regions, such as the EU, specific sugar crops (industrial beets) are being separately designated and developed for non-food uses such as bio-ethanol production.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

23

1. OVERVIEW

Following reform of its sugar regime, the EU is expected to reduce production in the context of rising imports and World Trade Organisation (WTO) bound controls on subsidized exports and may eventually emerge as the world’s leading sugar importer. Total sugar imports by the EU are expected to increase sharply by 2017-18, driven mainly by preferential exports from least-developed countries (LDCs) under the Everything But Arms (EBA) initiative and from the Africa-Caribbean-Pacific (ACP) group. However, the level of EU preferential imports from the latter group remains an important uncertainty. Mexican sugar exports to the higher priced United States market should increase with duties and restrictions eliminated under NAFTA on 1 January 2008. When considering shipments from third countries in addition to those from Mexico, United States purchases may exceed the import volume trigger for suspending the marketing allotments program of the 2002 FSRI Act, in all years of the projection period. As a result, public stock purchases (CCC) are expected to be required in each year out to 2017-18 to defend the US sugar loan rate price support system with domestic prices driven down to minimum loan-rate levels. Developing countries account for virtually all the increase in world sugar production and consumption over the Outlook, due to faster population growth and rising incomes. India and China account for the lion’s share in the increase in global consumption. Demand for sugar in China has been growing rapidly in the current decade from relatively low per capita consumption levels. With tightening government controls on artificial sweeteners, sugar consumption in China is projected to increase by 1.5% per year, implying rising imports that exceed the tariff quota of 1.95 Mt over the outlook period.

Despite increasing feed costs, world meat production continues to grow Against a backdrop of high feed costs, low profit margins and competition for land resources, the global outlook for meat is characterised by substantial increases in production and consumption in developing countries and a more stable path of development in the mature OECD markets; though overall growth is expected to take place at slower pace than witnessed in the past decade. Over the Outlook period, world meat production is expected to grow on average by 2% per year, but this trend disguises marked differences in growth rates of the different economic regions. Meat production among OECD members is expected to rise annually by around half a per cent, while growth in non-OECD countries could reach around 2.5% annually. Continuing investment, capacity building, better infrastructure and the dissemination of improved production technologies, are the main factors spurring such growth in meat and meat products, particularly in the more dynamic developing economies such as China, Brazil and – for pork and poultry predominantly – also in Argentina. As a result, some of them have been able to increase substantially their presence in supplying international meat markets. Brazil is a prime example of this feat. Given abundant land resources, capital and technology in combination with policy reforms, Brazil is expected to assume a 30% share of total world meat exports by the end of the projections. However, there are lingering concerns about the sustainability of this expansion. With trade recovering from the effects of animal-disease outbreaks, a small number of major exporters including the United States, Canada, Argentina and Australia alongside Brazil will remain dominant in world markets. However, in contrast, the export share of the EU is expected to further deteriorate over the Outlook. Fuelled by greater purchasing power and urbanisation, diets in developing countries are increasingly shifting away from staple foods of vegetal origin towards proteins of animal

24

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

1.

OVERVIEW

origin. Meat consumption in developing countries is expected to account for more than 80% of global growth. Much of this expansion will take place in Asia and the Pacific region, and will reflect in particular the rise in consumption of cheaper sources of animal protein, mainly poultry and pork. Consumption of pork in particular is expected to rise in China where pork is traditionally the most important meat and where 2007 consumption was reduced due to an outbreak of Porcine Reproductive and Respiratory Syndrome (PRRS). Import dependency in meat products is likewise expected to grow in many dynamic developing countries as burgeoning demand surpasses the domestic capacity for meat production throughout the duration of the Outlook. Among the developed countries, the Russian Federation is set to remain the world’s largest net meat importer by 2017, followed closely by Japan.

Tightness in dairy market to ease A pressing issue for the projections concerns how the global dairy industry will react to the unprecedented price spikes across dairy products that were observed in 2007. There is broad consensus that the industry has undergone structural change, where international markets have shifted from a supply-driven paradigm supported by distorting policies which used these markets as a dumping ground for excess supplies, to a more demanddriven paradigm, responsive to market signals and consumer wants. The growing relative importance of demand factors is further explained by urbanisation and higher incomes which have shifted diets in some developing economies towards a more diversified basket of dairy products, encouraged by growth in dairy marketing and retailing channels. The Outlook foresees that high international prices of dairy products will transmit strong signals for supply response from both traditional and emerging exporters. More importantly, where trade linkages allow higher prices to be transmitted to producers in developing countries, they may create incentives for investment, expansion and restructuring. This will help to reshape their industries, which will be increasingly geared towards higher value-added processing of dairy products. Rising supply potential will enable future production growth and improved domestic marketing linkages, placing these countries in a stronger competitive position in regional and global markets. Milk production gains over the Outlook period will be overwhelmingly driven by output growth in non-OECD countries. Dairy expansion in India, the largest producing country in the world, will be especially marked, where surging demand growth will stimulate a strong increase in milk and butter production. Driven by substantial yield gains, strong growth in milk production is also expected in China. This contrasts with moderate growth in the OECD area, where milk production increases mainly due to gains from Oceania and the United States and is chiefly constrained by domestic production controls in many other countries. These supply developments constitute one of the more prominent trends in the Outlook for dairy markets. Supply response, however, could be checked by higher production costs induced by both higher feed and energy prices. These affect production, processing and distribution of milk products, and will encourage the competitiveness of pasture-based systems. They also will affect trade, as higher transportation costs put local production at greater advantage. The evolution of world dairy markets will also be influenced by extensive policy interventions and by internal food-security concerns, but also increasingly by environmental constraints linked to high livestock populations, water availability and competition for pasture land. Increasingly, a higher production response in many countries will come from higher yields as opposed to increased cattle numbers. A key for the dairy OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

25

1. OVERVIEW

outlook is the potential for dairy markets to adjust in the presence of increased price volatility and low global stock levels of dairy products.

OECD countries continue to dominate world dairy exports World exports of dairy products are expected to grow for all products, with only a few developing countries able to affect the shares of traditional OECD exporters of Australia, New Zealand and the EU. In the latter, export shares could decline substantially, in light of a tight domestic market. Among the new exporters, Argentina is emerging as a dominant player in markets for whole-milk powder (WMP) and cheese, supported by its rising milk production capacity. Similarly, Ukraine is expected to increase its presence on the export markets mainly for cheese. Import markets will remain rather fragmented compared to those for exports. The six largest importers of dairy products are expected to cover less than 50% of the world market. In China, despite a strong increase in milk-production, demand will continue to outpace supply and imports are expected to grow over the Outlook, in particular for milk powders, where China will become one of the leading importers. Russia is foreseen to remain as the world’s most prominent importer of butter and cheese, with imports rising by more than 60% over the Outlook period compared with the 2005-07 base. Driven by milkreconstitution needs, global imports of milk powders will grow by over 3% annually over the medium term, mostly in Asia and the Middle East.

Biofuel production and use on an upswing Production and use of both ethanol and biodiesel have increased significantly in recent years. Production of fuel ethanol tripled between 2000 and 2007, with the US and Brazil accounting for the majority of this growth. However, a large number of other countries either commenced renewable energy programmes or increased fuel ethanol production in this period as well. Biodiesel output witnessed an even more pronounced expansion over the same period, having grown from less than one billion litres to almost 11 billion litres. Initially the EU accounted for more than 90% of global biodiesel production, but with increased biodiesel output in many other countries, in particular the US, its share has declined to less than 60% in 2007. Near-record prices for maize, wheat and vegetable oils at the start of the Outlook have reduced the economic viability of biofuel production in many countries, despite strong public support and increasing fossil fuel prices. Public support in the form of tax concessions and tax credits, blending obligations and regulations, and import tariffs are widely applied to help offset higher production costs of biofuels compared to fossil fuels. The one exception is bioethanol production from sugarcane in Brazil. In this case, lower world sugar prices associated with a large global surplus have improved the economic viability and profitability of ethanol production in Brazil, which remains competitive with gasoline at a crude oil price of around USD 55 per barrel. Most commodity prices are expected to fall from current highs over the Outlook period with larger crop production. Coupled with expected high crude oil and biofuel prices over the next few years, the economic situation of biofuel producers should improve compared to the situation in 2007 but remain less favourable than in 2005 and 2006.

Ethanol production to grow as prices stabilise at higher levels Global ethanol production is projected to increase rapidly and to reach some 125 billion litres in 2017, twice the quantity produced in 2007. World ethanol prices are

26

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

1.

OVERVIEW

expected to exceed USD 55 per hectolitre in 2009 as crude oil prices rise, but should fall back to levels around USD 52-53 per hectolitre over the remainder of the projection period as production capacity expands in a number of countries. Following increased mandates international trade in ethanol is expected to grow rapidly to reach 6 billion litres in 2010 and almost 10 billion litres by 2017, despite continuing trade protection. Most of this trade will originate in Brazil, and will be destined for markets in the EU and the US.

Global biodiesel production and use to be driven mainly by public policy Global biodiesel production is set to grow at slightly higher rates then for bioethanol – which maintains the largest share – to reach some 24 billion litres by 2017. This growth in output occurs despite the fact that world biodiesel prices are expected to remain well above production costs of fossil diesel, and to stay within the range of USD 104-106 per hectolitre, for most of the projection period. As in the case of ethanol, increased blending mandates should stimulate demand and boost international trade in the initial years of the Outlook. World trade is, however, projected to remain largely unchanged in following years due to technical constraints in the use of palm-oil based biodiesel in the colder climates and as production in the main consuming countries increases. Most of the trade should originate in Malaysia and Indonesia with the EU as the main destination.1

Main developments in trade in agricultural commodities Rapid expansion of world trade overall, dominated by developing countries When measured by imports, world trade is expected to grow for all commodities covered by the Outlook. The weakest growth is projected for wheat, with total world imports by 2017 exceeding the average for 2005/07 by nearly 15%. The highest growth rates of between 40 and 50% over this period are projected predominantly for vegetable oils and for certain livestock products (Figure 1.2).

Figure 1.2. Overall strong growth in world trade Imports in 2017 compared to the 2005-2007 average % 60 50 40 30 20 10

Ve

ai gr

P

Co

ar

se

SM

ns

at he W

ds ee ls

lm Oi

Oi

ea

ls

ce Ri

se ee Ch

tr y ul Po

gm

ea

t

r Pi

t te Bu

P M W

ge

ta

bl

eo

Be

ils

ef

0

1 2 http://dx.doi.org/10.1787/383568281505 Source: OECD and FAO Secretariats.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

27

1. OVERVIEW

When the focus is on crop imports, the projections show that for all crop products in the Outlook, except vegetable oils, developing countries dominate the picture of trade expansion. For wheat, sugar, oilseeds and oilmeals, most of the growth takes place in Asian developing countries. For oilseeds, import growth in Asia exceeds even total trade expansion and is offset to some extend by a decline in imports by OECD countries. For rice and coarse grains, most of the growth in imports takes place in African developing countries, and much of that in the LDCs. Turning to imports of livestock products, the picture is much different. For the relatively expensive products such as beef, pork and cheese, import growth is dominated by OECD countries. For poultry and milk powders, most of the growth in global imports is explained by larger imports in Asian developing countries. While these countries also represent over 40% of import growth for butter, the largest contribution to the trade expansion for this product is due to larger imports in the CIS countries.

Emerging exporters challenge the dominance of OECD countries Developing countries not only dominate import growth for most of the commodities in the Outlook, they also show with few exceptions the strongest growth rates for exports. For all products in the Outlook but rice, sugar and vegetable oils the growth in exports from developing country origin exceeds those from OECD countries. The leading growth position for the OECD for these products has to be seen in the context of trade growing from a small base, and in 2017, the OECD share in world exports is only 6% for vegetable oils and 14 and 10% for sugar and rice, respectively. Export growth in developing countries is greater – and sometimes much greater – for all other products, leading to declining shares of OECD countries in world exports for these products. Nevertheless, these countries continue to dominate the world export picture with shares of world trade ranging from 58 to 70% for wheat, coarse grains, pork and all dairy products. It is only for beef and poultry where the export share from developing countries of about 60% exceeds those of the OECD (Figure 1.3).

Figure 1.3. Growth in world exports dominated by developing countries Exports in 2017 compared to the 2005-2007 average OECD

%

Developing countries

140 120 100 80 60 40 20 0 -20 -40 Wheat

Coarse grains

Rice

Oilseeds Oilmeals Veget. Oils

Beef

Pigmeat Poultry

Butter

Cheese

WMP

SMP

1 2 http://dx.doi.org/10.1787/383607761103 Source: OECD and FAO Secretariats.

28

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

1.

OVERVIEW

The outlook for world prices World prices to retreat from current highs but firmness expected to prevail over the medium term In the context of generally lower global stocks in recent years, biofuels impose an additional dimension to global demand for grains, oilseed products and sugar. Coupled with sustained global income growth which is particularly underpinning demand for food and feed in certain developing and emerging countries, with limitations to land and productivity based increases in supply and with higher oil prices which raises production costs, this situation is expected to underpin international quotations. All three of these factors are expected to lift price levels for arable crops that are, on average, substantially higher than in past projections. Higher average crop prices and associated feed costs, in turn, lead to higher livestock product prices over the Outlook period as well. When compared to the average for 1998 to 2007, prices projected for the period 2008 to 2017 will – in nominal terms – on average be around 20% higher for beef and pork, some 30% for raw and white sugar, 40 to 60% for wheat, maize and skim milk powder, more than 60% higher for butter and oilseeds and over 80% higher for vegetable oils (Figures 1.4 and 1.5).

Figure 1.4. Outlook for world crop prices to 2017 Index of nominal prices, 1996 = 1 2.3

2.3

2.1

2.1

Vegetable oils

1.9

1.9

1.7 1.5

Coarse grains

1.7

Oilseeds

1.5

Refined sugar

1.3 1.1

1.3 Wheat

Oilseed meals

1.1

Rice

0.9

0.9

0.7

0.7 Raw sugar

0.5 1996 2000 2004 2008 2012

0.5 2017 1996 2000 2004 2008 2012 2017 1 2 http://dx.doi.org/10.1787/383616275237

2017 1996 2000 2004 2008 2012

Source: OECD and FAO secretariats.

Figure 1.5. Outlook for world livestock product prices to 2017 Index of nominal prices, 1996 = 1 2.3

2.3

2.1

2.1

1.9

1.9

Cheese

1.7

1.7

1.5

Beef

Butter

1.3 1.1 0.9

1.5 Whole milk powder

Poultry

1.3 1.1 0.9

Pigmeat

0.7

0.7 Skim milk powder

0.5 1996 2000 2004 2008 2012

2017 1996 2000 2004 2008 2012

2017 1996 2000 2004 2008 2012

0.5 2017

1 2 http://dx.doi.org/10.1787/383616275237 Source: OECD and FAO Secretariats.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

29

1. OVERVIEW

When expressed in real terms, the decade-over-decade increase is obviously smaller, but remains very substantial for crops and dairy products. Despite this rise in their average level, prices of most agricultural commodities fall and are expected to remain below current or recent peak levels by the end of the Outlook. In addition, there would not appear to be any structural changes in the functioning of markets that would suggest reduced price variability. On the contrary, a number of factors are at play that may well render market prices more variable than in the past. Such factors include continued low stock to use ratios, a possibility of more variable weather conditions, less responsive consumer demand to farm level price changes as the commodity share in the food bill falls, increased industrial demand for agricultural commodities, which also tends to be less price-sensitive than food and feed demand, and massive amounts of noncommercial investment funds that may enter or leave agricultural futures markets with either net long or net short positions as profit opportunities dictate.

Low stock-to-use ratios support cereal prices and prices in the oilseed complex In spite of the expectation of a strong recovery in grain production in 2008, prevailing low stock levels suggest continued market tightness, especially when demand prospects for food, feed and fuels show no sign of abating. Cereal markets are expected to remain closely balanced over the Outlook as stock to use ratios are expected to remain low in the years to come and despite growth in cereal production. This implies high grain prices throughout most of the Outlook. However, continued productivity increases in line with their long-term trend and some increase in areas planted are expected to see prices below their 2007 peak levels. For wheat this is the case throughout the Outlook period, while for coarse grains prices are likely to remain high for some years to come before falling below present record levels. Despite this decline, grain prices will average above their mean levels of the previous decade, even in real terms. From that higher level, however, real prices continue their long-term downward trend. International rice prices are anticipated to remain firm in the short term, as countries replenish rice inventories. While weaker prices are projected from 2010, they are unlikely to fall much in consideration of higher production costs. With lower buffer stock levels projected on thin world markets, world prices are likely to manifest much higher volatility than in the past, as the market becomes more vulnerable to supply and demand shocks. Rising demand for vegetable oils, for both food and the growing biodiesel sector, is expected to weigh heavily over the medium term, leaving stock to use ratios in the oilseed complex under pressure. The combination of strong demand and low inventories will be extremely supportive to prices in the next few years, but from then on prices will gradually fall back as supply and demand adjust. As is the case for cereals, prices for oilseed and oilseed products, once corrected for inflation, are expected to decrease in real terms but to stay considerably above their long-term trend.

Sugar prices strengthen with increasing premium for white sugar As the world market is brought into closer balance and excess sugar stocks drawn down, world indicator prices for raw and white sugar are projected to rise strongly in nominal terms, but will still trend downwards in real terms over the projection period. The margin between raw and white sugar prices should widen over the Outlook given expectations of increasing supply of raw sugar and rising costs of refining. With reforms having reined in the use of exports subsidies in the EU, reducing its role as a major white-

30

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

1.

OVERVIEW

sugar exporter, the white-sugar premium in future years should reflect more the cost of further sugar refining.

Meat prices projected to stay above current averages, but dairy prices expected to gradually retreat from 2007 record levels Given rising feed costs and strong meat demand in the major emerging economies, meat prices are expected to rise above historic levels in the medium term. Non-ruminant production is notably affected by high cereal and oilseeds prices as low-priced distiller’s dry grains (DDGs) cannot easily be integrated into their feed rations. These higher input costs are expected to result in increased meat prices over the next decade. World dairy prices are expected to weaken somewhat over the next two years as supply responds sufficiently to strong price incentives. While prices are anticipated to decline from currently high levels, the expectation is that they will remain firm over the entire outlook and stay higher compared to the previous decade. As with the majority of other agricultural commodity prices, when expressed in real terms the well-established longer term falling trend was reversed radically in recent years. However, dairy products are expected to resume a modest declining trend in future years, albeit from a much higher level than in the past.

Some major issues and uncertainties This year’s Outlook has been prepared in an environment characterised by increased instability in financial markets, higher food price inflation, signs of weakening global economic growth and food-security concerns. The commodity markets have shown dramatic rises in prices across a range of commodities on a weekly basis, attracting the attention of the daily press and stimulating discussion on the food-feed-fuel debate. Although projections for agricultural commodity markets have always been subject to a number of uncertainties, these have taken on more importance in this year’s edition. As in the past, weather conditions, animal-disease outbreaks, the macroeconomic environment and domestic policies are all factors that will continue to affect agricultural market outcomes. The question for the forthcoming period is how these key factors and uncertainties will change over time and to what extent they will change the market outlook. Some of these uncertainties are discussed in detail in a separate section in this report. On the supply side, weather-related production shocks have always been the single most important factor for agricultural production and recent bad weather spells in several important producing regions have been responsible for much of the supply shortages on commodity crop markets. Is the recent spell of bad weather merely an episodic event, or does it foreshadow more systematic changes linked to global warming and more variable weather patterns around the world? In the presence of high prices and the related increased food security concerns, what is the scope for further productivity gains, technological advances and breakthroughs in production and harvesting or for bringing new areas into cultivation? In developing countries, what is the potential for the expected plateau of higher average prices to be transmitted to domestic markets, reinvigorating agricultural industries and improving their competitive position in local and international markets? What will be the timing of the availability of second generation biofuel production technologies? Coupled with unforeseen changes in crude oil prices, how will this affect the production of biofuels and agricultural commodity markets?

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

31

1. OVERVIEW

The uncertainties on the demand side seem to be lesser as steady year-on-year income driven consumption growth remains a basic feature of many commodity markets. Nevertheless, macroeconomic conditions are playing a crucial role for future market developments and a slowdown in economic growth as compared to that assumed in the Outlook would moderate demand, international trade and agricultural commodity prices. In addition, exchange rate developments could have an important influence on the markets as a change in domestic currencies vis-à-vis the US dollar would affect comparative advantages and domestic market responses given price changes on international markets. A particular uncertainty on the demand side of agricultural markets is the growing presence and investments of non-commercial interests, such as financial funds, in futures trading on commodity markets. To what extent is the growing demand for financial derivatives affecting demand, risk management strategies and spot market prices for crops? And how will this further evolve in the future. Policy interventions can also create uncertainty in commodity markets. Changes in biofuel policies, either to raise or to lower domestic targets or to review current policy incentives downwards, could be of major importance for agricultural markets given that biofuel production is one of the important factors lending strength to these markets over the medium term. In more general terms, there will be changes to domestic policies in key producing and trading countries such as new farm legislation in the United States, any changes that may results from the “health check” of the EU CAP or an eventual outcome to the current round of the Doha multilateral trade negotiations. Such and other changes have not been anticipated in this Outlook and would affect market outcomes. Finally, high international commodity prices have recently lead governments in several countries to introduce measures to restrict exports. While such policies may in the short term provide some relief to domestic consumers, at the expense of some further belt tightening by their neighbours, they impose a burden on domestic producers, dampen the supply response in these countries, and aggravate the global commodity market situation.

The policy issues The key feature of this year’s Outlook is the record-high level of many agricultural commodity prices. These are partly due to short-term factors such as drought in major cereal-producing areas and speculative activity. Once the influence of these transitory factors is removed or changes, prices will fall from current highs. However, there are factors at play that will keep prices well above average levels over the past decade. These include the steady growth in demand linked to population and income growth as well as changing diets in emerging economies, in particular China and India. But there are also factors that are uncertain into the future: energy prices, the diversion of land and crops for bioenergy, and climate change. High prices are always good for some and bad for others. They are good for producers of farm produce, including in many cases for the people they employ, even though high prices of cereals, for example, mean higher costs for producers of cereal-based animal products. High prices are not only beneficial for some farmers in OECD countries, but may also be good news for commercial producers in developing countries. Insofar as those higher prices more than offset higher energy and other input costs in these countries, higher farm incomes can have important multiplier effects and lead to higher income levels in rural areas. For farm households producing mainly for their own consumption or for local markets that are insulated from price fluctuations on national and international

32

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

1.

OVERVIEW

markets, the impacts will be mitigated. But for the poorer segments of the population, and in particular for those in the net food importing developing countries, the impacts will be strongly negative as an even higher share of their limited income will be required for food consumption.

What are appropriate policy responses? According to an old adage, the best remedy for high prices is high prices. High prices stimulate supply and dampen demand on agricultural markets, the balance will change and prices will come down. But the Outlook also shows that prices are likely to continue to average around substantially higher levels than in the past, possibly with larger variations around that higher average. The Outlook for lower prices in the foreseeable future with the possibility of a turnaround being more rapid than is currently foreseen calls for caution in taking any precipitous policy action. However, the fact that certain groups in the population and certain countries suffer from current high prices and may continue to be worse off in a context of sustained higher price levels in the future provides a policy challenge. In the short term, humanitarian aid for the populations in countries most severely affected is urgently required. Before recent price increases, although there had been improvements, hundreds of millions of people were going hungry because they could not afford food. With higher prices, the numbers of people suffering from extreme hunger has increased even further and the first UN Millennium Development Goal has become an even greater challenge. As suggested recently by the World Bank, aid in the form of cash or vouchers is more appropriate in many cases than commodity shipments, provided supplies can be procured. Such aid may also be more effective than short term measures, such as export taxes or embargoes, that restrain exports in order to ensure domestic market supplies. In the medium term, there is a real need to foster growth and development in poor countries and to assist in developing their agricultural supply base. In some of the poorest countries, investment in agriculture, including in agricultural research, extension and education, which has been lagging in recent years, is often the best way to cut poverty and stimulate economic activity. Expected high farm prices may provide an incentive for this. In other situations, investment in agriculture may be helpful, but there is also a need to diversify the structure of the economy. In general, investments in improving the overall environment in which agriculture operates may be most appropriate. These include improving governance and administrative systems, macroeconomic policy, infrastructure, technology, education, health, and defining and enforcing property rights. Agricultural trade policies require further reform. Trade restricting policies – whether they restrict exports or imports – have undesirable and often unintended impacts, especially in the medium and long term. On the import side, “protecting” domestic producers of agricultural commodities by providing high price support and border protection – including the increasing resort to non-tariff barriers – restricts growth opportunities for producers abroad and imposes a burden on domestic consumers. Export taxes and embargoes may in the short term provide some relief to domestic consumers – including to the wealthier ones who may not need these measures – but they impose an even larger burden on domestic producers and limit their supply response, as well as contribute to global commodity market uncertainty.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

33

1. OVERVIEW

It is also necessary to examine more closely the causes and impacts of the recent price increases. On the supply side, the link between production and yield shortfalls, climate change and water availability warrants further analysis, both in terms of trends, variability and risk. Investments in R&D, technology transfer and extension services, particularly in less developed economies, could do much to increase productivity and output and there may be a role for governments to foster this, especially where there are wider public benefits. In addition, the future development of genetically modified organisms (GMOs) also offers potential that could be further exploited, both to improve productivity and to enhance the attributes of crops destined for either food or non-food uses. The largely policy driven nature of the rapid increase in the supply and demand for biofuels is one of the reasons for current and future higher prices. OECD/IEA analysis to date2 suggests that the energy security, environmental, and economic benefits of biofuels production based on agricultural commodity feed stocks are at best modest, and sometimes even negative, and are unlikely to be delivered by current policies alone. Alternative approaches may be considered that offer potentially greater benefits with less of the unintended market impact, such as policies that encourage reduced energy demand and greenhouse-gas (GHG) emissions, provide for freer trade in biofuels, and accelerate introduction of “second-generation” production technologies that do not rely upon current commodity feed stocks.

Notes 1. For a detailed analysis of the market impacts of biofuel policies, see OECD/IEA Economic Assessment of Biofuel Support Policies (forthcoming). 2. For further details, see OECD/IEA Economic Assessment of Biofuel Support Policies (forthcoming).

34

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ISBN 978-92-64-04590-3 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 © OECD/FAO 2008

Chapter 2

Are High Prices here to Stay?

35

2. ARE HIGH PRICES HERE TO STAY?

Introduction World prices of maize, wheat and oilseed crops all nearly doubled in nominal terms between the 2005 and 2007 marketing years (Figure 2.1). Those prices continued rising into early 2008, competing with oil-price hikes in capturing media and policy attention. These developments have led to a fuller awareness and a justifiably heightened concern about food security and hunger, especially for developing countries where food availability at affordable prices is precarious. The analysis in this chapter does not attempt a comprehensive explanation of all of the factors responsible for the recent run up in prices. Rather the focus of the discussion is predominantly on the contribution – qualitative or quantitative – of various factors in determining price developments over the medium term.

Figure 2.1. Food commodity prices, 1971-2007 with projections to 2017 Nominal USD/t

Real

Wheat

USD/t

Coarse grains

700

500 450

600

400 500

350 300

April 2008

400

April 2008

300

250 200 150

200

100 100

50

0 10

20 1 20 5 17

05

00

20

20

5

20

0

5

0

Rice

19 9

19 9

19 8

19 8

71

75 19

19

10

20 1 20 5 17

20

05 20

5

00 20

0

5

0

USD/t

19 9

19 9

19 8

75

19 8

19

19

71

0

USD/t

Oilseed

1 600

1 200

1 400

1 000

1 200 800

1 000 April 2008

800

April 2008

600

600 400

400 200

200

10

20 1 20 5 17

05

5

0

5

00

20

20

20

19 9

19 9

19 8

0 19 8

75 19

71 19

20 1 20 5 17

10 20

05 20

5

0

5

0

00 20

19 9

19 9

19 8

19 8

75

0 19

19

71

0

1 2 http://dx.doi.org/10.1787/383632210563 Note: Real prices deflated by USA GDP deflator; 2007 = 1 (April 2008: montlhy price quotation). Source: OECD and FAO Secretariats.

36

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

2.

ARE HIGH PRICES HERE TO STAY?

Meat and poultry prices have also seen increases during this period but only very modest ones. There have been substantial increases in prices of dairy products in 2007 although the pressure on the international dairy market has already abated somewhat. As the international debate has focused recently on the implications of increases in crop markets, the primary focus of this chapter is on prices for cereals and oilseeds. Agricultural commodity price increases have been a significant, but not the only, factor driving up the cost of food. High oil prices and the resulting higher costs of food processing, transportation and distribution have driven food costs higher still. Food price inflation is generally running well ahead of general price inflation but especially so in many developing countries (Box 2.1). Higher food costs are of course more painful for

Box 2.1. Measuring the impact of rising commodity prices on food prices Agricultural commodity price increases are making headlines and there is much debate and concern about what these extraordinary price increases mean for food prices, particularly in developing countries. Policy makers have become extremely concerned by recent price developments because of the implications for consumers’ ability to meet their most basic of needs, food. This is a critical issue for developing countries where large portions of the population have income levels that are low or at subsistence levels. But increasing prices reduces the purchasing power of incomes also in relatively high-income countries, where it will be the low-income groups that are particularly affected. In general, households with low incomes are more heavily penalized when the price of necessities rise because these absorb a larger share of their income. The increase in food prices from a government perspective is however not generally measured by the change in one or two commodities or in one or two cities, but by a fixed basket of foods consumed in urban areas of the entire country; this measure is known as the food price index. Changes in the food price index are important because of their contribution to overall inflation rates, that is, the change in the Consumer Price Index (CPI).a The impact of food prices on this indicator varies across countries according to the share of income which consumers allocate to food and the rate of increase of food prices. How important are commodity price increases for food prices? The direct links between current commodity prices and retail food prices are often difficult to make without an analysis of the food production and distribution structure as well as the relative costs of inputs. For importing countries, the link between international commodity prices in local currency depends on a number of factors, including exchange rates, transportation costs and border policies, as well as the structure of the food distribution system. The local price of wheat for a consumer in such countries is not simply the international price in USD at say US Gulf Ports, but the Gulf Port price of wheat times the exchange rate plus the cost of transportation and insurance to the point of delivery in addition to any import duties imposed by the country. So in this case, recent domestic price increases not only reflect the higher price of wheat but also increased freight (transportation and insurance) costs, which have risen by 250% since early 2006, and are now at record high levels.b Nevertheless, price increases in domestic currency terms may be less than the increase in the dollar price of wheat in countries where the US dollar has depreciated significantly vis-à-vis their currency.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

37

2. ARE HIGH PRICES HERE TO STAY?

Box 2.1. Measuring the impact of rising commodity prices on food prices (cont.) Trade policy measures such as import tariffs also add to the price of imported commodities. These costs can be easily modified by governments so as to limit price increases, for instance, if governments adopt import tariffs which decrease automatically if the price of the imported commodity rises beyond a certain level, as in the case of rice for Bangladesh, or even be suspended if the world price rises beyond a threshold level, such as in Indonesia. These mechanisms function to moderate price increases once goods reach the border. In the face of rising domestic prices of key commodities, exporting countries may put in place export taxes or bans. India and Vietnam recently banned rice exports when prices reached what were deemed to be unacceptable levels in domestic markets. Once commodities reach the domestic market, the issue of price transmission through the supply chain to retail markets predominates. The link between commodity prices and retail food prices is a hotly debated issue, and depends on many factors that vary by country. In general, farm gate prices of agricultural commodities in many developed countries account on average for 25 to 35% of the final retail price. While this is not negligible, the share is often much less and varies across fresh and processed foods. The higher the degree of processing, the lower will be the share of the raw commodity in the final price at retail. This means that food prices reflect not only commodity price changes but also those of other inputs, in particular wages, energy, transport and storage. It also means that depending on the circumstances, retail food prices can change by more or by less than what would be determined by the change in commodity prices if these factors do not change to the same degree. In developing countries the share of processed goods in the food basket is generally small, thus the increases in commodity prices are likely to be more directly transmitted through to retail prices. This fact, coupled with a larger share of income devoted to food expenditures, implies that the rise in agricultural commodity prices has a significant impact on developing country consumers. Both of these elements will determine the extent of the contribution of food price changes to the overall CPI or inflation. How important is the food component in the CPI? The weight of the food component in the CPI varies significantly across countries, reflecting the structure of household expenditures. The food price component ranges from less than 10% in the United States to over 30% in Turkey and Poland, but for the majority of OECD countries food expenditure shares range between 13% and 20%. In developing countries the share of food expenditure in the budget is much higher; for instance, it is 28% in China, 33% in India, and absorbs more than half of total household expenditures in countries such as Kenya at 51%, Haiti at 52%, Malawi at 58% and Bangladesh at 62%. These observations confirm Engel’s Law, which displays an inverse relationship between food expenditure shares and income (Figure 2.2). The implication is that for countries where food expenditure accounts for an important share of income, high food prices will have a negative impact on the purchasing power of incomes. In these countries, rising food prices mean an erosion of the capacity to meet basic needs, and this is likely to become a potential source of political tensions and even violence. Low-income households are those that will be most affected by an increases in food prices. As the share of income they spend on food is relatively high, they have little remaining income left to reallocate expenditure from other goods to meet food needs. They may simply be forced to consume less food and other basic necessities as a result of higher food prices.

38

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

2.

ARE HIGH PRICES HERE TO STAY?

Box 2.1. Measuring the impact of rising commodity prices on food prices (cont.) Figure 2.2. Food expenditure shares and per capita income Percentage share of food expenditure in CPI 70 NGA LKA 60 TZA GHA 50

KEN

40

SEN PAK BFA

30

UGA

20

JOR HKG JPN

ECU ESP

IDN ITA

THA

10

AUT

KOR DEU

GBR CHE

IRL

USA NOR

0 0

5 000

10 000

15 000

20 000

25 000 30 000 35 000 40 000 GDP per capita in constant PPP international dollars 1 2 http://dx.doi.org/10.1787/383647208768

Source: FAO Secretariat (HLC/08/INF/1: Soaring food prices: Facts, perspectives, impacts and actions required. April 2008).

How fast have consumer food prices been rising? For most countries consumer food price inflation has recently exceeded overall inflation rates (see Table 2.1 for selected countries), and food price inflation in developing countries has exceeded that in OECD countries. For most developing countries this is likely due to the rise in agricultural commodity prices. Since a larger share of foods consumed in developing countries is unprocessed, the commodity portion of food has a larger weight in retail prices. Furthermore, food price inflation in developing countries has exceeded that in developed OECD countries. Since the food price component is an aggregate measure, it can hide price variations for specific products. It is difficult to summarize the products that have increased most rapidly over the past year, as this depends largely on country situations. Using data for February 2008 compared to February 2007, milk product prices have generally risen sharply, as shown by those for butter with price increases of 50% in Poland, 40% in France, 36% in Spain, 32% in the Czech Republic, about 36% in Jordan and some 12% in Malaysia. Eggs prices have also risen sharply, by 34% in the US, 30% in the UK and the Czech Republic and 10% in Spain. Vegetable oil prices rose 18% in India and 47% in Botswana in the past year. Meat prices rose sharply in some countries such as China, where the increase was 45% but this was largely due to disease issues in their pork sector. The increase in prices for cereals and bakery products was much more moderate; prices rose by 5.7% in the US, 6.9% in the UK and 3% in France and Korea, and about 6% in both China and India. What is the effect of food price increases on overall inflation? It is clear from Table 2.1 that consumer food prices are contributing to the overall rate of inflation in most countries. For developed countries, where food price inflation is moderate and the share of food in the total consumer basket is small, the contribution of food price inflation to overall inflation is correspondingly moderate. In most countries it contributed less than 1 percentage point to the overall CPI increase over the year from February 2007 to February 2008. But as would be expected, the impact of food price inflation on overall inflation in developing countries is much larger. As shown in Table 2.1 it contributes 6.5 percentage points of the total inflation of 8.7% in China, 7.6 points of the total inflation of 10.6% in Pakistan, 9.2 points of the total of 10.3% in Bangladesh, 12.4 points out of total inflation of 15.4% in Kenya, and 1.9 points out of total inflation of 4.6% in India.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

39

2. ARE HIGH PRICES HERE TO STAY?

Box 2.1. Measuring the impact of rising commodity prices on food prices (cont.)

Table 2.1. Food price contribution to consumer price inflation (selected countries) Total CPI % change1

Food price inflation1

Developing

Expenditure share of food

Food contribution to total change in CPI3

-%-

Guatemala

8.04

11.6

38.9

4.5

Sri Lanka2

19.37

25.6

62

15.9

Botswana

7.7

18.3

21.8

4.0

India2

4.6

5.8

33.4

1.9

Indonesia

6.8

11.4

26.7

3.0

Pakistan2

10.6

18.2

41.5

7.6

South Africa

8.6

13.6

21

2.9

Jordan

5.4

9.1

39.7

3.6

4

6.4

29.6

1.9

Senegal

5.8

10.9

40.3

4.4

Egypt

9.5

13.5

41.5

5.6

Haiti

9.9

11.8

50.3

5.9

Kenya

15.4

24.6

50.5

12.4

Bangladesh

10.3

14.2

64.5

9.2

8.7

23.3

27.8

6.5

USA

4.0

5.1

9.8

0.5

France

2.8

5.0

16.3

0.8

Germany

2.8

7.4

10.4

0.8

UK

2.5

5.6

11.8

0.7

Japan

1.0

1.4

19.0

0.3

Greece

4.4

6.6

17.8

1.2

Spain

4.4

7.1

21.9

1.6

Switzerland

2.4

2.2

11.0

0.2

Poland

4.3

7.1

30.4

2.2

Sweden

3.1

5.9

13.4

0.8

Peru

China Developed

1 2 http://dx.doi.org/10.1787/385014651524 1. Percentage change February 2007 to February 2008. 2. Includes beverages and tobacco. 3. Contribution is column 2 x 3/100. Source: OECD Secretariat. For OECD member countries, April 2008. FAO Secretariat for non-OECD countries.

The main conclusion is that for developing countries food price inflation makes an important contribution to overall inflation. For the urban poor the situation is particularly distressing since low incomes, often not much above USD 2 a day, combine with rising food costs and no access to land resources to produce at least part of their food supplies. The Outlook, with its projected sustained higher level of prices, implies an important decline in the purchasing power and welfare of millions of people across the globe. a) In most OECD countries core inflation, which excludes food and energy prices because of their high variability, is the guiding indicator for policymaking in monetary and fiscal policies. b) The International Grains Commission freight cost index rose from 4 125 at the start of 2006, to 10 347 in March 2008.

40

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

2.

ARE HIGH PRICES HERE TO STAY?

consumers in poorer segments of the population, in particular those in food-importing developing countries, where the food bill constitutes a dominant share of total consumer expenditures. The causes of the price spike are complex and are attributable to a combination of mutually reinforcing factors at play in international agricultural markets. The list includes: droughts in key grain-producing regions; sharply increased biofuel demand for food commodities; rising oil prices and a continuing devaluation of the US dollar, the currency in which indicator prices for the commodities of interest are typically quoted.1 Critically, these supply and demand developments occurred after there had already been a run-down in stocks, which under more normal circumstances could have dampened price movements. Finally, the turmoil in commodity markets has occurred against the backdrop of a severe world financial crisis that is widely believed to have sparked a substantial increase in speculative interest in agricultural futures markets (Box 2.2).

Box 2.2. Prices in cash and derivative marketsa Derivative-markets prices in the US, such as options and futures for wheat, soybeans and maize, are widely quoted as indicative prices and are the focus of much commercial activity. Long-time participants have been surprised at recent increases and daily changes – some daily changes in prices in 2008 have been greater than levels of prices a few years ago. New market participants are seen to bring vast amounts of money and some observers question if they contribute to both the direction and variability of prices in these markets. A key concern now is the participation of new agents that are perceived to be motivated by risk-diversification to the exclusion of serious assessment of price levels. Institutional investors are known to be hedging other risk in their portfolios typically by taking long positions (a commitment to buy) on near-by contracts, as opposed to short positions (commitments to sell). Data relating to the activities of non-commercial traders in the US derivatives markets provides some information about institutional investors’ trading patterns and scale.b Total open interest in maize, for example, has increased from 0.66 million contracts in February 2005 to 1.45 million February 2008 during which period non-commercial traders’ share in opening interest in long positions increased from 17% to 43%. For wheat, contacts increased from 0.22 million to 0.45 million over this period and the non-commercial traders’ share of opening long interest rose from 28% to 42%. The pattern for soybeans is similar whereas sugar contract volumes increased over this period but non-commercial traders’ share in open long sugar positions remained at about a third. Monthly trading volumes have increased during this period by 85% for maize, 125% for wheat and 56% for soybeans, and by threefold for sugar. Supplemental data from this source confirm that institutional investors tend to take one-sided (long or buying) positions, and that these entities, along with other non-traditional participants such as banks, account for a growing share of the market. Analysis of the role of institutional investors should not be reduced to the level of caricature. But a sound strategy for one firm may not be so wisely pursued by all. The aggregate effect of all their activities may be upward pressure on derivative market prices in the short term. The jury is still out on the longer term impacts on price levels. But increased price volatility seems a plausible result given the volume of these noncommercial investments and given the fact that they may move in and out off commodity trading as alternative profit opportunities dictate.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

41

2. ARE HIGH PRICES HERE TO STAY?

Box 2.2. Prices in cash and derivative marketsa (cont.) Ideally, derivative markets help pool information at low costs to help discover prices and provide a venue for trading risk. The surge of new moneys invested into commodity markets by non-traditional sources is seen by some observers to test the institutional designs of derivative markets and of the link between them and cash markets. a) The material of this box is based on a contribution by Frank Rose, formerly Senior Vice-President, CBOT, now Assistant Professor, Lewis University. b) Commitments of Traders Report, Commodity Futures Trading Commission.

The projections contained in this Outlook are based on implicit assumptions concerning which of the contributory factors are temporary and which are permanent. Further analysis examines how variations in these assumptions affect the robustness of the view that higher prices, though not as high as today’s levels, are here to stay.

Recent food commodity price hikes in an historical context The commodity price spikes witnessed in the last couple of years, and particularly most recently, are exceptional when viewed from the perspective of the last decade or so but not so much so when seen in a longer historical context. Figure 2.1 shows the evolution of annual average world prices of wheat, coarse grains, rice and oilseeds from 1970 to 2007, with projections from 2008 to 2017. Monthly average prices for April 2008 are also included to indicate most recent developments.2 For each commodity there are two lines, one tracing dollar-denominated nominal prices and one tracing that same series adjusted for inflation (labelled “real” prices). Nominal price trends are convenient indicators of short-run price developments but to be economically meaningful, longer-run price trends need to be looked at in inflation adjusted terms. The first thing to notice from these four graphs is that a high degree of price volatility is characteristic of world food commodity markets, even when one looks at annual averages. Prices are typically sensitive to short run shocks to either supply and demand because of, e.g., delays between production decisions and output and the resulting slow adjustment of quantities demanded to price changes. Volatility on international markets is further enhanced by policy interventions that shift price risk away from producers or even outside of the country entirely. The second thing to notice from the data plotted in Figure 2.1 is that the recent price spike is neither the only, nor even the most important, one to occur in the last 30-plus years. In inflation adjusted terms, today’s prices fall well short of peaks achieved in the early 1970s, and neither current maize nor wheat prices are averaging much above levels achieved as recently as the mid-1990s. Of course, having weathered previous food commodity price storms does not negate the need for or the urgency of policy action to deal with this one. However, deciding which policy actions are most appropriate requires an understanding of the various forces driving recent price moves and knowing which of those various forces may be assumed to be temporary and which are likely to be permanent features of future commodity markets.

42

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

2.

ARE HIGH PRICES HERE TO STAY?

Crop and vegetable oil price changes: What happened and what happens next? What happened… Wheat and coarse grains Between the 2005 and 2007 marketing years, world planted area of wheat and coarse grains (maize, barley, sorghum, oats,) was basically flat, although regional changes were at times quite large (Table 2.2). Within the OECD region, a sharp decrease in EU area planted to these grains was offset by an increase in plantings in the US. The lower area planted to wheat and coarse grains in the EU defies the increasing world prices, even if less pronounced in euro, but may be consistent with domestic market incentives caused by policy changes. An analysis of the relative impacts of policy reform and other factors on recent changes in EU wheat and coarse grains areas goes beyond the scope of this report.

Table 2.2. Supply of wheat and coarse grains

Prices, USD/t (Nominal) Wheata Maizeb Area harvested, m ha World OECD Australia and Canada European Union United States Non-member economies Brazil China India Indonesia South Africa Yield, t/ha World OECD Australia and Canada European Union United States Non-member economies Brazil China India Indonesia South Africa Production, mt World OECD Australia and Canada European Union United States Non-member economies Brazil China India Indonesia South Africa

Change 2005 to 2007

2007 level

168 106

319 181

150 75

89 71

231 165

62 59

37 56

525 177 36 62 55 348 16 52 52 4 4

531 177 35 57 61 354 16 52 56 3 4

6 0 –1 –6 5 6 0 0 4 0 –1

1 0 –2 –9 10 2 –2 1 8 –2 –13

539 177 37 58 58 362 17 48 60 4 4

14 –1 1 –4 3 14 0 –4 8 0 0

3 0 3 –7 5 4 1 –7 15 1 –10

3.1 4.5 2.5 4.4 6.5 2.4 2.7 4.7 1.9 3.6 3.3

3.1 4.5 2.0 4.5 6.7 2.4 3.5 4.9 1.9 3.6 2.6

0.1 0.1 –0.5 0.1 0.3 0.1 0.8 0.2 0.0 0.1 –0.7

2 1 –21 2 4 3 31 4 0 1 –22

3.5 5.3 2.6 5.4 7.7 2.7 3.8 5.7 2.0 3.8 3.2

0.5 0.8 0.1 1.0 1.3 0.3 1.1 1.0 0.1 0.3 –0.1

15 17 3 22 20 14 42 21 4 8 –2

1 615 792 90 277 356 823 43 245 102 13 14

1 661 801 70 256 407 860 56 257 110 12 10

46 9 –20 –21 51 37 12 11 8 0 –5

3 1 –22 –8 14 5 29 5 8 –1 –32

Absolute

Per cent

2017 level

Change 2005 to 2017

2005 level

Absolute

Per cent

1 906 291 18 928 135 17 95 5 6 313 36 13 446 90 25 978 155 19 62 19 44 276 31 13 122 20 19 14 1 9 12 –2 –12 1 2 http://dx.doi.org/10.1787/385058145577 a) No. 2 hard red winter wheat, ordinary protein, USA f.o.b. Gulf Ports (June/May). b) No. 2 yellow corn, USA, f.o.b, Gulf ports. Source: OECD and FAO Secretariats.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

43

2. ARE HIGH PRICES HERE TO STAY?

The impact of weather shocks in this period is clear: yields of two major exporting countries, Australia and Canada, fell by about a fifth in aggregate. In the case of Canada, the shock may to some extent be a reduction from atypically good yields in 2004 and 2005, but in Australia the poor crop represents one of several poor yield outcomes in recent years (Figure 2.3). The trend yield in Australia was assumed in this figure, rather than estimated. If estimated over this interval, the trend yield in Australia would be negative due to the persistent drought. To reduce the inconsistency as compared to longer historical patterns and the Outlook assumptions, a trend growth rate of 0% over this interval is assumed for these calculations. The graph shows that yields overall were at or below trend in many countries. In contrast, there was a recovery from poor yields experienced in 2005 in some places, such as in Brazil.

Figure 2.3. Deviations from trend of wheat and coarse grain yields Australia

Canada

EU27

United States

Tonnes per hectares 0.8 0.6 0.4 0.2 0 -0.2 -0.4 -0.6 -0.8 -1.0 1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

1 2 http://dx.doi.org/10.1787/383680730253 Note: Yield trends are estimated over these years to be 0.7% for the EU (27), 1.0% for Canada, and 2.6% for the US, and assumed to be 0% for Australia. Source: OECD and FAO Secretariats.

On the demand side, use of food grains to be processed into biofuels stands out as an important component of demand growth between marketing years 2005 and 2007 (Table 2.3). Wheat and coarse grain use overall increased by about 80 Mt, or 5%. Within this aggregate, biofuel use doubled, rising by 47 Mt, thus accounting for over half the increase in world grain use. The US biofuel use of grains alone explains the vast majority of this change, up by 41 Mt even after adjusting for distillers grains co-produced with ethanol and added to feed use. But these data also show that an attribution of all the grain price increases to ethanol would be incorrect. Despite a doubling of some grain prices and broad increases overall, global food and feed use per capita were sustained, implying that the generally strong economic performance of the last two years has been manifested in outward shifts of demand that – in combination with relatively inelastic demand in the short term – has offset the impact of higher prices on quantities demanded. In non-OECD countries, food use of grains was 3% higher in 2007 than in 2005, and feed use was 2% higher indicating that the expansion in livestock consumption and production in these countries, discussed in previous editions of the OECD-FAO Outlook, has continued. Excluding biofuels, the total of other uses of wheat and coarse grains – nonfood and non-feed uses such as for industrial processes – was flat between 2005 and 2007.

44

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

2.

ARE HIGH PRICES HERE TO STAY?

Table 2.3. Demand for wheat and coarse grainsa Change 2005 to 2007

2007 level

absolute

Wheatb

168

319

150

89

231

62

37

Maizec

106

181

75

71

165

59

56

World

642

662

21

3

725

83

13

OECD

166

175

9

6

178

12

8

7

7

1

9

8

1

17

European Union

86

85

–1

–1

87

1

1

United States

31

34

3

10

34

3

10

percent

2017 level

Change 2005 to 2017

2005 level

absolute

percent

Prices, USD/t (Nominal)

Food, mt

Australia and Canada

Non-Member Economies

476

487

11

2

547

70

15

Brazil

16

16

0

–2

19

2

15

China

105

104

–1

–1

100

–5

–5

India

89

92

3

4

102

13

15

Indonesia

10

11

0

4

12

2

15

7

8

0

1

8

0

4

World

749

761

12

2

840

91

12

OECD

430

431

1

0

454

23

5

31

31

0

0

31

0

0

European Union

167

165

–2

–1

169

2

1

United States

176

179

3

2

198

22

12

South Africa Feed use (include ethanol co-products for USA), mt

Australia and Canada

Non-Member Economies

318

329

11

3

386

68

21

Brazil

31

32

0

1

38

7

22

China

107

110

4

3

130

23

21

India

8

9

1

11

14

5

67

Indonesia

4

5

0

5

5

1

20

South Africa

4

4

0

–10

4

0

–8

World

232

279

47

20

365

133

57

OECD

121

163

43

35

238

118

97

5

8

2

44

15

9

175

Other uses, mt

Australia and Canada European Union

17

19

2

12

39

23

136

United States

78

115

37

48

162

84

107

111

116

5

4

127

16

14

Brazil

5

5

0

1

7

2

41

China

35

38

3

9

46

12

34

India

8

9

0

4

9

0

4

Indonesia

3

3

0

0

3

0

0

South Africa

1

1

0

–36

1

0

–16

46

93

47

103

172

126

275

1

6

4

323

24

22

1 720

41

81

41

100

131

91

222

World

1,622

1,702

80

5

1,930

307

19

OECD

717

770

53

7

870

153

21

Non-Member Economies

906

932

27

3

1,059

154

17

427

359

–68

–16

399

–28

–7

Non-Member Economies

of which, biofuel (ex. feed co-product) World European Union United States Total use, mt

World ending stocks, mt

1 2 http://dx.doi.org/10.1787/385125431745 a) Historical data on the use of cereals for biofuels are estimates and subject to revision. b) No. 2 hard red winter wheat, ordinary protein, USA f.o.b. Gulf Ports (June/May). c) No. 2 yellow corn, USA, f.o.b., Gulf Ports. Source: OECD and FAO Secretariats.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

45

2. ARE HIGH PRICES HERE TO STAY?

Oilseeds The vegetable oil markets have experienced a broadly similar pattern of demand growth between the 2005 and 2007 marketing years, but without much of a shock to supply (Table 2.4).The area planted to oilseeds has decreased globally, whereas oilseed yields grew faster than was the case for grains. The reduction in oilseed plantings is explained by reallocation of area in the US, and decreases in Brazil and China. The poor oilseed yields of Australia and Canada do not offset better performance elsewhere. World vegetable oil production, which includes palm oil as well as oils crushed from oilseeds, grew 7% over this two year period.

Table 2.4. Supply of oilseed and vegetable oil 2005 level

Change 2005 to 2007

2007 level

Absolute

Per cent

Change 2005 to 2017

2017 level

Absolute

Per cent

Prices, USD/t (Nominal) Oilseedsa

269

486

217

81

457

188

70

Vegetable oilb

556

1 015

459

82

1 055

499

90

World

145

142

–3

–2

164

19

13

OECD

48

46

–2

–4

50

3

5

7

8

1

10

10

2

27

Area harvested (oilseedsc), m ha

Australia and Canada European Union

9

10

1

13

11

2

28

31

27

–4

–12

28

–2

–7

97

96

–1

–1

113

16

16

Brazil

23

21

–3

–11

28

5

20

China

18

16

–2

–9

18

0

0

India

16

17

0

2

18

2

12

Indonesia

1

1

0

–19

0

0

–26

South Africa

1

1

0

–11

1

0

44

World

2.0

2.1

0.0

1

2.3

0.3

15

OECD

2.6

2.4

–0.2

–8

2.8

0.2

6

Australia and Canada

1.9

1.5

–0.4

–20

1.8

–0.1

–6

European Union

2.6

2.4

–0.2

–7

3.1

0.6

22

United States

2.8

2.7

–0.1

–5

3.0

0.2

6

1.8

1.9

0.2

9

2.2

0.4

22

Brazil

2.2

2.8

0.6

26

2.9

0.7

31

China

1.8

1.7

0.0

–3

1.9

0.2

11

India

1.0

1.0

0.0

1

1.1

0.1

15

Indonesia

1.3

1.3

0.0

1

1.5

0.2

15

South Africa

1.3

1.3

–0.1

–5

1.4

0.1

4

World

99

106

7

7

143

45

45

OECD

26

27

1

4

33

7

25

2

2

0

–3

3

1

72

European Union

11

12

1

8

14

3

27

United States

10

10

0

3

12

2

19

73

79

6

8

111

38

52

Brazil

6

6

0

–1

7

2

28

China

11

11

0

3

17

6

51

India

4

4

0

1

5

1

29

16

19

3

18

28

12

74

0

0

0

–13

0

0

46

United States Non-member economies

Yield (oilseeds), tons/ha

Non-member economies

Production, vegetable oil, mt

Australia and Canada

Non-member economies

Indonesia South Africa

1 2 http://dx.doi.org/10.1787/385160411654 a) Wheighted average oilseed price, European port. b) Wheighted average price of oilseed oils and palm oil, European port. c) Defined as rapeseed (canola), soyabeans and sunflower. Source: OECD and FAO Secretariats.

46

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

2.

ARE HIGH PRICES HERE TO STAY?

World vegetable oil use increased faster between marketing years 2005 and 2007 than production (Table 2.5). Of the demand increase, biofuel use of oils accounted for over half. Excluding biofuel use, other uses rose by over 4% during these two years, or at roughly the rate of population growth. In the face of strong prices, this increase indicates a shift in demand for traditional uses that offsets the price effect, compounding the strong growth in use as biofuel feedstock.

Table 2.5. Demand for vegetable oila 2005 level

Change 2005 to 2007

2007 level

Absolute

Per cent

Change 2005 to 2017

2017 level

Absolute

Per cent

Prices, USD/t (Nominal) Oilseedsa

269

486

217

81

457

188

70

Vegetable oilb

556

1 015

459

82

1 055

499

90

World

96

105

8.8

9.2

143

47.5

49.5

OECD

34

37

3.1

9.2

50

16.3

48.2

1

1

0.0

0.8

2

1.0

85.8

European Union

17

19

1.9

11.4

29

12.3

72.5

United States

10

11

1.3

13.1

12

2.5

25.2

62

68

5.7

9.2

93

31.1

50.2

Brazil

3

3

0.0

–0.3

6

2.6

78.3

China

17

20

2.3

13.3

25

7.7

43.9

India

9

9

0.2

2.2

11

2.4

27.6

Indonesia

4

5

0.9

22.6

8

3.9

100.4

South Africa

1

1

0.1

11.7

1

0.3

32.8

World

4

9

4.9

113.9

21

16.9

388.0

European Union

3

6

2.3

68.8

12

9.0

266.8

United States

1

2

1.2

162.3

2

0.9

121.8

World ending stocks, mt

9

8

–1.1

–11.9

9

0.2

2.6

Use, vegetable oil, mt

Australia and Canada

Non-member economies

of which, biofuel

1 2 http://dx.doi.org/10.1787/385178837100 a) Historical data on the use of cereals for biofuels are estimates and subject to revision. b) Wheighted average oilseed price, European port. c) Wheighted average price of oilseed oils and palm oil, European port. Source: OECD and FAO Secretariats.

What happens next… Permanent and temporary factors in future prices and price volatility Given how global supply and demand changed between 2005 and 2007, it may appear as if nothing much dramatic has happened that could possibly trigger the big price increases actually observed. Yet, there has effectively been a gap between growth rates of demand and supply wide enough to cause prices to rise significantly on markets where neither supply nor demand (can) respond elastically and swiftly to price changes – at least not in the short term. In the market for cereals (wheat and coarse grains), production has grown by 46 Mt (3%), between 2005 and 2007, while total use increased by nearly double that amount, i.e. 80 Mt (5%), over the same period. In the market for vegetable oil, the gap between production and use growth was also about two percentage points. Had stocks been easily available they might have helped to bridge these gaps. But that was not the case, as shown below. Outlook data permit an assessment of the permanent and temporary nature of the various contributing factors to recent price increases. Those of a short-term nature do not OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

47

2. ARE HIGH PRICES HERE TO STAY?

affect future prices as in the Outlook they are not assumed to recur. But the permanent factors are expected to influence the level and trends of future prices. Recent negative yield shocks in key agricultural commodity-producing regions have contributed to the price increase. This particular phenomenon can be viewed as temporary in the Outlook, barring underlying climate change or water constraints that lead to permanent reductions in yield. Macroeconomic conditions have favoured higher world prices. Good economic growth increased purchasing power in most countries during the recent past, leading to strong demand growth for most agricultural commodities. Moreover, a weak USD typically leads to higher USD-denominated prices of traded goods, as they will not be as expensive when priced in other currencies – although prices of most commodities in most currencies are more expensive than two years ago. This factor is assumed to be permanent in the Outlook. These are not new factors, however, and, certainly GDP growth in developing countries has been a feature of commodity markets for many years. These factors should be considered to slow the decline in real prices in the future, not to lift average prices to permanently higher levels. The oil price, and energy prices more generally, are important contributing factors to the recent increase in agricultural commodity prices. While the effects of higher oil prices on biofuel demand may be the focus of discussion, traditional effects of energy prices, namely on costs of commodity production and on costs of transportation, processing, distribution and marketing intermediate and final products, are also important. In any case, the Outlook assumptions reflect the widely held belief that the oil price increases are permanent and that further gradual increases are likely. Higher oil prices result in a structural increase in agricultural production costs and contribute to lifting future prices to higher average levels. Available data suggest that somewhat more than half of the increase in the quantity of demand for grains and vegetable oils between 2005 and 2007 was due to biofuels. Based on Outlook assumptions of further modest increases in the price of oil, continuation of policies that support for biofuel production and use and no dramatic technology change, feedstock demand for biofuel production appears to represent a permanent factor. While biofuel use of grains and vegetable oils is anticipated to represent a falling share of the overall increase in demand for these food commodities, it is nevertheless a new source of demand which is seen as one of the factors lifting prices to higher average levels in the future. Stocks of wheat, coarse grains and vegetable oil have fallen to low levels relative to use (Figure 2.4), reducing the buffer against shocks in supply and demand. This has been one reason for the recent run-up in prices. During the 10-year outlook period stocks are projected to remain low, implying that tight markets are a permanent factor in the Outlook. This should not lead to permanently higher prices but certainly provides the background for more price volatility in the future. There has recently also been a surge of new moneys invested into futures commodity markets from non-traditional sources. The long-term aggregate effect of these activities on the level of derivative market prices and related prices in cash markets is still very uncertain. Adjustment in market procedures and participants’ behaviour argue that any effect on price levels will prove temporary relative to the 10-year Outlook. As these funds are very large, however, and can and will move rapidly in and out of commodity markets as profit opportunities dictate, this development may well be a new and permanent element in future price volatility (Box 2.2).

48

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

2.

ARE HIGH PRICES HERE TO STAY?

Figure 2.4. Stocks-to-use ratios of maize and wheat Maize

%

Wheat

50 45 40 35 30 25 20 15 10 5

19 6

0/ 19 196 62 1 / 19 196 64 3 / 19 196 66 5 / 19 196 68 7 /1 19 96 70 9 / 19 197 72 1 /1 19 97 74 3 / 19 197 76 5 /1 19 97 78 7 / 19 197 80 9 / 19 198 82 1 / 19 198 84 3 / 19 198 86 5 / 19 198 88 7 /1 19 98 90 9 / 19 199 92 1 / 19 199 94 3 / 19 199 96 5 / 19 199 98 7 / 20 199 00 9 /2 20 0 0 02 1 / 20 20 0 04 3 / 20 20 0 06 5 /2 00 7

0

1 2 http://dx.doi.org/10.1787/383723077040 Source: US Department of Agriculture PSD View database, April 2007.

A more general point concerning price volatility relates to the “thinness” of markets, or the share of imports and exports relative to the volume of global consumption and production (Table 2.6). For coarse grains, the share of imports in consumption and exports in production is on the order of 10-12%. For rice the share is even lower whereas for wheat, these ratios are higher, but still less than 20%. In contrast, the share of vegetable oil production that is exported and the share of consumption that is imported are about 44%.

Table 2.6. World coarse grain, wheat and vegetable oil market indicator ratios

Coarse grain Wheat Vegetable oil

Growth rate (2005-2007)

Growth rate (2005-2017)

Ratio

2005

2007

2017

Export/Production

11.1%

11.7%

10.4%

4.6%

–6.3%

Import/Consumption

10.4%

11.2%

10.5%

8.6%

1.1%

Export/Production

17.8%

17.4%

18.3%

–2.4%

3.0%

Import/Consumption

17.5%

17.9%

18.3%

2.1%

4.9%

Export/Production

44.8%

44.1%

44.0%

–1.4%

–1.7%

Import/Consumption

44.0%

43.7%

44.1%

–0.5%

0.2%

1 2 http://dx.doi.org/10.1787/385236851201 Source: OECD and FAO Secretariats.

Thin markets reflect barriers to trade – of a natural (e.g. transport costs) or policy (e.g. import tariffs) nature – that prevent agents from seeing world price signals. Thus prices must change more to accommodate an external shock to traded quantities, all else being equal, when markets are thinner. The assumptions on which the Outlook is based, however, do not include a change in natural or policy determined trade barriers. Thus, while such market characteristics are a permanent feature in the Outlook, there is no assumed change in the degree of market thinness and the impact on price volatility over time. The nature and composition of demand, on the other hand, are factors that may increase the future variability in world prices. As discussed, industrial demand for grains and oilseeds – such as for the production of biofuels – constitutes a growing share of total use. This demand is generally considered less responsive to prices than traditional food and OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

49

2. ARE HIGH PRICES HERE TO STAY?

feed demand. In addition, food demand elasticities may be further reduced by rising incomes and more sophisticated food supply chains. Such changes are permanent elements in the Outlook that may lead to greater volatility in future world prices (Box 2.3).

Box 2.3. How income growth affects commodity demand Income growth has been strong and widespread in recent years, despite a slowdown of the US economy and some cases of poor economic performance. The consequence is higher per capita income in many countries, including many non-OECD countries. Previous Outlook reports emphasized that rising incomes are associated with greater demand for food and a shift in the composition of food demand towards livestock products, namely meats and dairy goods as well as fruits and vegetables, and away from staple crops. But they may also have other implications: less elastic demand, and new links from energy prices to commodity and food markets. Income growth tends to be simultaneous with urbanization. Many countries with the greatest growth rate are also experiencing migration from rural areas to cities. As people move away from rural centres of food production and as they rely more on the infrastructure of countries and cities to deliver foods to their area, the marketing chain between commodity production and food consumption adapts. These changes may lead to longer transportation, refrigeration, and other activities whose costs vary with energy prices, as well as wages and other costs that may themselves be affected indirectly by energy prices. In short, food prices increasingly depend on oil and energy prices independently of commodity prices as income rises. The share of commodity price in food price may also decrease as the marketing chain lengthens. In the US, the commodity cost component of the total food bill has fallen from about one-third in the 1960s to about one-fifth since the mid-1990s.a As the share of commodity costs in the food bill falls, the expected proportional change in food prices for a given percentage change in commodity costs decrease: a doubling of commodity prices will have a greater effect on final food consumers if commodity costs initially already accounted for almost all of the food costs, whereas a similar doubling of commodity prices would have a smaller proportional effect for food consumers if the commodity costs were only a small fraction of the total food bill. Thus, as income increases and market chains extend, the responsiveness of demand to farm-level prices may decrease. Economics of demand indicate that consumers tend to care less about prices of goods that represent a small share of their budget. As incomes expand and the share of budgets spent on a necessity like food fall, consumers are expected to be somewhat less sensitive to price changes, and a shock to supply of a given size will require a greater price signal to compel consumers to adjust their purchases. Higher incomes that tend to reduce demand elasticity may lead to greater variability in world prices. This has certain implications. Greater income and purchasing power leading to less sensitivity to prices means that fewer people are pushed into starvation by rising prices. But people who have not enjoyed anything like the average income growth rate will face more variability in prices, including higher peaks, without the additional purchasing power, and these groups will be worse off than before. Thus, higher food prices strain budgets of the poor, even if food is still purchased. a) US Economic Research Service (www.ers.usda.gov/data/FarmToConsumer/marketingbill.htm).

50

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

2.

ARE HIGH PRICES HERE TO STAY?

Wheat and coarse grains The inventory of short-term and permanent factors and how these may affect future prices helps to disentangle what may happen next in cereals and oilseed markets. Looking ahead to marketing year 2017, the end of the Outlook period, wheat and maize prices are expected to remain higher than in 2005, but not as high as in 2007. Area is not expected to be a main source of new production, although some increase is expected. There is likely to be a geographic reorientation of sorts, as the US focuses on grains and the EU on oilseeds and the total area planted to wheat and coarse grains in the EU decreases. On a world scale wheat and coarse grain area is expected to increase some, but certainly not dramatically despite the higher level of prices as compared to 2005. Yields are expected to grow along historical trend patterns, but this assumption obscures two important caveats discussed below: weather-related yield shocks will certainly occur, and the effect of higher prices on yields is unclear. Demand for these grains to be used as feedstocks in biofuel production is not expected to continue to expand at the rate of the last two years.3 However, cereal use for biofuel production is projected nearly to double from 2007 to 2017, though its share of the overall increase in quantities of wheat and coarse grains used is expected to fall from about 60% to just over 40%. The US is likely to continue to be the centre of grain-based ethanol production, assuming no new technologies displace current practices, but use in the EU is likely to expand, too. The larger part of the growth in use is explained by rising food and feed demand particularly in non-OECD countries, where both categories rise by 15% on average or more whereas OECD food and feed uses increase at a lower rate. The assumed continuation of strong economic growth of recent years underlies these shifts in grain demand.

Oilseeds The baseline previews a strong vegetable oil price even as by 2017 oilseed prices (and oilseed meal prices) are expected to retreat from recent levels. The higher prices of 2007 bring about a supply response that results in more land allocated to this sector and good yield growth. Area planted to oilseeds is expected to increase over the period, with some growth in the OECD area, apart from the US, and strong growth should be seen in nonOECD countries. A large share of this growth is expected to take place in Brazil and Argentina, but oilseed area will expand in Ukraine and Russia, too. During the projection period, yield grows on average at the historical trend rate. Palm-oil production is expected to grow quickly, increasing by two-fifths between 2007 and 2017. Biofuel use of vegetable oils accounts for more than a third of the growth in vegetable oil use from 2005 to 2017. This is very strong growth in percentage terms, as world biofuel use increases more than five-fold from the very small base in 2005. But the growth in other uses amounts to an increase of about 33% over this period as well. These consumption increases worldwide take place at a nearly constant real world price, and while growth rates vary widely, they are indicative of strengthening demand. Income growth drives much of this expansion of demand, with non-OECD countries increasing their consumption of vegetable oils by half in 2017 relative to 2005.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

51

2. ARE HIGH PRICES HERE TO STAY?

Uncertainties The foregoing paragraphs provided a discussion of the baseline results for cereals and oilseeds prices over the Outlook period. Based on the projected developments in supply and demand for these commodities, prices are expected to remain strong, albeit not as high as what they currently are. But these outcomes reflect the assumptions underlying the projections, and whether or not these assumptions become reality is uncertain. Some of these uncertainties are first discussed qualitatively in the following paragraphs. The next section shows what the quantitative impact of some of these factors may be. Commodity market volatility will continue, and the direction of changes is uncertain. The fact that prices currently are at historic peak levels does not mean that swings in the other direction should be excluded. In the short term, low stocks-to-use ratios may lead to greater price movements for a given shock, either up or down. Higher income in most of the world may lead not only to greater demand and a change in the composition of demand, but also to lower responsiveness of demand to price changes. Thin markets with few stocks and increasingly inelastic components of total demand experience greater price volatility. There will be shocks to yields and to macroeconomic conditions, including oil prices, that increase or decrease world prices. Crop harvests fail. Recent history abounds with predictions of constant strong economic growth of a country into the future that have been wide off the mark and a reduction in income leads to lower demand. Widespread expectations of climate change lead to predictions of declining yields, and diminishing water supplies lead to predictions of abandoned areas. Systemic and massive shocks are often assumed to be negative. But there are also “risks” in the opposite direction. Good weather can lead to exceptional yields, additional investments and technological breakthroughs may improve yields more than expected, and economic growth can beat predictions. Policy response to the price situation is also an unknown. In response to concerns about domestic prices, will more countries use trade policies or domestic market interventions in order to reduce the increases in their domestic prices? If countries insulate their domestic market from world prices through beggar-thy-neighbour policies, then world prices will rise even further before the remaining countries that are paying or receiving these prices adjust quantities of demand and supply so that markets balance. There is also some uncertainty regarding future agricultural policies. For instance, there is the potential for another world trade agreement and there are scheduled policy decisions, such as the US farm bill that is pending at the time of writing or the “health check” of the CAP to be undertaken by the EU. Environmental policy continues to be a source of uncertainty. Producers in many key exporting countries meet standards that are intended to encourage sustainable practices. Environmental policies introduced to address potential climate change, e.g., carbon taxes or credits, could lead to rapid changes in the profitability of farmland use and practices. Biofuel policies are also a source of uncertainty. By the time of this publication, the representation of key biofuel policies in some countries is already out of date in this Outlook. An array of new US mandates and the potential consequences of an EU Directive promoting larger quantities of biofuel use are not included. These or other policies to promote biofuel production and use, whether through mandate or subsidy, will lead to greater purchases of feedstocks for biofuel production. Alternatively, of course, if policies

52

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

2.

ARE HIGH PRICES HERE TO STAY?

to support biofuel use and production are deferred, waived, or overwritten with lesser efforts, then feedstock purchases will decline, reducing average prices in the future below the projections in this report. Feedstock purchases may differ radically from current and projected patterns if new biofuel production technologies become viable, through whatever combination of commercial profit and subsidy. New processes that generate biofuels from feedstocks that do not directly compete with existing commercial crops, or are even co-products of such crops, could lead to a departure from the Outlook, possibly a fairly radical one. But such a possibility is explored elsewhere by the OECD, as it raises complicated questions that defy cursory analysis. A key question is the long-run capacity of supply. One argument reiterates messages of climate change and water overuse, suggests that yields are peaking, and sees little scope for further supplies. Another argument emphasizes the potential of human innovation to continue or even quicken yield trends, particularly when motivated by a high price, and the unrealized potential of countries that are still in stages of development that are associated with low productivity. The Outlook is not the place to look for answers to these arguments. Neither is it a place to look for unconditional support for either case. Here, historical trends in technology growth are assumed to continue into the medium-term future. More generally, high prices are their own worst enemy. Price increases lead to supply and demand responses, which lead to lower prices. A high price spurs producers to find new means of raising output, and encourages consumers to choose alternatives or to use goods more effectively. It may take time to introduce extreme changes, such as new processes of making a good, using a good for intermediate processing, introducing substitute goods or adjusting lifestyles. The scale and delay of such responses to high prices are uncertain, but that agents will respond in ways that work against sustained price increases is certain.

How important are the Outlook assumptions in determining future prices? After having argued qualitatively the impacts of a number of factors with uncertain outcomes on the level and variability of prices, the discussion below tries to quantify some of these effects. The recent spikes in food commodity prices surprised most economic forecasters, reminding us of the inherent vulnerability of projections to unanticipated developments. The baseline assumptions of normal weather and stable economic performance are necessary, but the future will not follow that smooth path. Negative and positive yield shocks are a permanent feature of agricultural commodity markets. So, too, are macroeconomic shocks that reduce or raise income, alter exchange rates, and induce or limit inflation. Similarly there is growing discussion over whether governments will continue to subsidise the conversion of food commodities to biofuel production with the same enthusiasm as during recent years. To give some idea of the sensitivity of the baseline to alternative assumptions regarding these factors, the economic model underlying those projections was used to perform sensitivity analysis. Two kinds of simulations were performed. In one, five versions of the baseline were simply reproduced, progressively replacing original assumptions about key determining variables with plausible alternative values. In the second, a stochastic simulation was undertaken wherein the assumptions of normal weather and a stable macroeconomic environment are replaced by a range of plausible yield values and macroeconomic variables.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

53

2. ARE HIGH PRICES HERE TO STAY?

Scenario results The five key assumptions that were examined are: 1) biofuel use of grains and oilseeds, 2) petroleum prices, 3) income growth in major developing economies: China, India, Brazil, Indonesia and South Africa (labelled EE5 countries in Figure 2.5), 4) the exchange rate of the USD relative to the currencies of all other countries, and 5) crop yields. Figure 2.5 shows results for the first set of simulation experiments. To simplify the presentation, all the shocks chosen for these experiments were implemented such that they move prices below those projected in the baseline. Obviously, the opposite would have been possible as well. To further aid exposition, the focus here is just on the price outcomes for the terminal year of the baseline projection period, 2017. In interpreting these findings it should be noted that, taken one by one, these alternative assumptions might seem equally realistic as those made for the baseline. Of course, the likelihood that they would all come together in the way that is assumed here is low. But, indeed, recent years have seen just such a coincidence of developments in all these factors, all pushing prices in the same, upward, direction. While those developments cannot explain the entire run-up in food commodity prices that has occurred since 2005, they surely help to explain much of it. It is noteworthy that even seemingly modest changes in assumptions can lead to significant differences in projected prices. For coarse grains and vegetable oil, the price outlook would be most affected if biofuels production were to remain constant at 2007 levels. Changes in demand for these commodities as feedstocks for biofuel production are a source of uncertainty, no matter whether the cause is an oil price change, a change in biofuel support policies or a new technological development that lead processors to buy different feedstocks. Holding biofuels production constant at its 2007 level takes around 12% off the 2017 projected prices for coarse grains and around 15% off the projected price of vegetable oil.

Figure 2.5. Sensitivity of projected world prices to changes in five key assumptions, percentage difference from baseline values, 2017 Scenario 1 : Biofuel production constant at 2007 level Scenario 2 : Scenario 1 and Oil price constant at 2007 level (72$) Scenario 3 : Scenario 2 and Lower income growth in EE5 countries (half annual growth rate) Scenario 4 : Scenario 3 and Progressive appreciation of the USD exchange rates to reach 10% higher rates in 2017 % 0

Scenario 5 : Scenario 4 and yields for wheat, oilseeds and coarse grains 5 % higher than over the projection period

-5 -10 -15 -20 -25 -30 -35 -40 -45 Wheat

Maize

Vegetable oil

1 2 http://dx.doi.org/10.1787/383750187035 Source: OECD and FAO Secretariats.

54

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

2.

ARE HIGH PRICES HERE TO STAY?

The second scenario shows that wheat, coarse grains and vegetable oil price projections are all shown to be highly sensitive to petroleum-price assumptions. This sheds light on the important role that the recent sharp escalation in crude oil prices is playing in driving up food commodity costs. This single external factor not only is a crucially important feature of the macroeconomic context but also directly affects the energy costs of agricultural production, transportation, and food processing. Many countries tend to have better economic growth if the oil price is low, but others benefit from a high oil price. Under the constant oil price assumption, the prices of maize and vegetable oil are about 10% lower and the wheat price falls 7% in 2017 when compared with the baseline projection. GDP growth in developing countries is a source of recent increases in demand that many observers take to be a permanent feature of the medium-term future. Trend-line extrapolations of 8-10% GDP growth in a country that are extended into the indefinite future beg the question: when will this growth stop? The sensitivity of prices to increases in GDP is tested with respect to the hypothetical case where the rate of growth in GDP is reduced to half the rate assumed in the Outlook. This scenario gives wheat and coarse grains prices that are only modestly (1 to 2%) below the baseline. For vegetable oils, reflecting presumably a much higher income elasticity of the demand and a greater influence of EE5 countries in world trade, the simulated price difference is over 10%. These results may be less surprising than they seem on first sight. First, while EE5 countries are rapid growth markets for wheat and coarse grains, they are still relatively small players in world trade. This is not the case for vegetable oils, where China and India are very large importers and where lower GDP growth has a substantial world price effect. Second, this scenario does not take account of any second-round effects that lower income growth in EE5 countries may have on economic growth elsewhere. So there may be some downward bias to the outcomes presented here. A fourth scenario was defined to simulate the results of a stronger US dollar. Thus, USD exchange rates were progressively appreciated to reach rates in 2017 some 10% higher than was assumed for the baseline. A stronger US dollar raises prices in domestic currency terms in exporting countries, providing greater incentives to increase supplies. At the same time, a stronger US dollar reduces the import demand in importing countries. The combination of greater export supply and weaker import demand puts additional downward pressure on world prices. By 2017, wheat, coarse grain and vegetable oil prices are all some 5% below the corresponding baseline projection. The scenario under which cereals and oilseeds yields are assumed to be 5% higher leads to projected wheat and maize prices for 2017 that are 6 and 8% lower respectively than the corresponding baseline value, but make little difference for projected vegetable oil prices. Yield trends are a source of great uncertainty. Some observers see constraints to agricultural productivity owing to vanishing water resources and even greater potential constraints to agricultural production as a consequence of global warming. Global warming is argued to lead directly to greater incidence of negative yield shocks and sustained negative pressure on production in heat stressed climatic zones. But yields may actually increase in regions with moderate climates so the net effect on world production is uncertain. Furthermore, it could lead to the introduction of policies such as carbon trading that may also tend to reduce agricultural output by raising land and energy costs.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

55

2. ARE HIGH PRICES HERE TO STAY?

Other observers note that sustained high prices lead to surges in investment and foresee that recent events will spur greater technology growth. The more optimistic view even looks to another Green Revolution that raises yields in some of the poorest regions of the world, much as the previous one raised yields in parts of South and Southeast Asia and Latin America. Such optimists reply to concerns about greater weather variability by noting the consequent incentive to develop technologies and to turn to commodities that are less susceptible.

Stochastic results Stochastic analysis, in which ranges of key input variables are used instead of fixed values, provides a more balanced and comprehensive look at the underlying uncertainty of the projections.4 The choices of alternative values for them were based on historically observed patterns in the data. The result is that for each year of the baseline a statistical distribution of price projections is produced for every commodity, rather than one single price projection. The essence of the findings from this exercise is captured by looking only at the simulated distribution of price outcomes obtained for 2008 and 2017. Figure 2.6 summarizes results for those two projection years in terms of the median, and the values of the 10th and 90th percentiles of the distributions of the price projections for wheat, coarse grains and vegetable oil prices. The median values of these distributions are nearly identical to the deterministic values projected for the baseline. The 10th percentile is an indicator of the lower end of the range; the 90th percentile indicates the upper end. These should not be read as representing low and high extremes, but rather as indicating plausible alternative futures based on past variation in key variables driving commodity prices.

Figure 2.6. Stochastic crop prices in 2008 and 2017 in nominal terms 10% percentile

Median price

90% percentile

USD/t

USD/t

350

1 600

300

1 400 1 200

250

1 000 200 800 150 600 100

400

50

200 0

0 Maize

Wheat

Maize

2008

Wheat 2017

Vegetable oil

Vegetable oil

2008 2017 1 2 http://dx.doi.org/10.1787/383755402227

Source: OECD and FAO Secretariats.

For the projected maize price in 2008, the 10th percentile is USD 146 per tonne and the 90th percentile is USD 204. The corresponding values for wheat price are USD 244 per tonne and USD 296. In both cases, the 10th and 90th percentile are farther apart in the 2017

56

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

2.

ARE HIGH PRICES HERE TO STAY?

results than in 2008, reflecting the compounding effects of uncertainty in early years, particularly as regards underlying trends. In both cases, the distribution shifts downward. The 10th percentile falls to USD 117 per tonne for maize and USD 174 per tonne for wheat, whereas the 90th percentile changes little. The lower level of the distribution in 2017 reflects the underlying assumptions of the Outlook. The potential for deviations from those assumptions to result in either much lower or constant grain prices relative to current values based on the historical variations represented here reflects the degree of uncertainty that is known and readily modelled. The distribution of vegetable oil prices in 2017 indicates that in that case, too, assumptions of these projections and historical variations that are most readily measured imply the potential for prices to be either one-fifth lower or two-fifths higher than the price projected for 2008 in the Outlook.

The bottom line In this chapter, a number of temporary and permanent factors have been identified which help to understand how future commodity prices are expected to evolve. On the basis of the analysis, the response of this report to the question “Will prices remain as high as they are today?” is “Very unlikely”. While prices can be expected to fall from current highs, and to resume a gradual decline, they are expected to do so from a higher level than what is seen historically. To summarise, the main factors that have contributed to the current spike and will help to determine developments in the future can be summed up as follows: ●

Demand has grown faster than supply because of, among other reasons, growth in biofuels production.



Supply would normally have grown more, but unfavourable weather conditions in some important producing countries reduced production and export supplies to world markets. Future supply response will be dampened by high oil prices.



The sensitivity of demand to price changes appears to be falling for various reasons. Thus, a shock to supply of a given size will require a greater price change to bring about the demand adjustment required to balance the market.



At the same time, global stocks have declined to record-low levels over the last decade, such that any variations in quantities produced and demanded cannot be buffered and hence have a proportionally much greater effect on market prices.



The sharp increase of financial fund activity in futures commodity markets may have further contributed to the short term price hike, but the extent to which this has been the case is uncertain.



Border measures that have been taken by many countries in an effort to increase domestic market supplies have reduced supplies on world markets, further magnifying the price increases.

These developments have combined to lift prices to very high levels. But an element of uncertainty about future developments appears to have had a strong impact as well, particularly recently, as both governments and investors are acting in ways that sometimes contribute to further price increases and future price volatility. Without these additional influences, prices would most likely not have been as high as what they are in reality.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

57

2. ARE HIGH PRICES HERE TO STAY?

With respect to future price trends over the Outlook, scenario results have shown the relative impact on prices of different assumptions with respect to macroeconomic developments, exchange rates, oil prices, biofuel production and yield trends. When taken together, these changed assumptions could lead to cereal and vegetable oil prices that are some 25 to 40% lower than baseline values in 2017. While these scenarios were implemented in a manner to reduce prices to demonstrate their relative contribution, they may also occur in a different configuration that would lead to prices being stronger than projected in the baseline. However, the stochastic analysis that was carried out for this Outlook assessment suggests that at least for cereals, the downside risk for prices in the future seems to be increasing.

Notes 1. Dollar-denominated prices have risen substantially, but the generally weakening dollar over this period means that the price increases elsewhere have often been less pronounced than headline prices might lead one to believe. With the exception of few countries, domestic and import crop price increases have been substantial but somewhat less dramatic than in USD terms. Moreover, many countries, in both the OECD and non-OECD region intervene in agricultural markets with policies such as tariffs, leading to even lower transmission of changes in the prices of traded goods to domestic markets. 2. Price projections for 2008 in the Outlook baseline clearly do not, and could not possibly, match the recent extreme price hike. The baseline, generated to provide an impression of possible medium to longer-term market developments, necessarily has to abstract from some of the short-term factors inherent in commodity markets. These can result in monthly price variations that are much larger than those that can be observed from annual averages which are used in the Outlook. 3. Note that the EISA in the United States and proposals for new mandates in the EU have not been taken into account in this analysis. 4. Stochastic simulation techniques and output have been elaborated in previous Outlook reports. The annual projected values of yields and macroeconomic variables (including the petroleum price) are not assumed to be single numbers in the projection period, as for the baseline. Rather, random perturbations in yield levels, trends, and in macroeconomic variables are drawn from historically determined distributions, respecting to the greatest extent possible correlation among errors and relationships among macroeconomic variables. Several hundred such randomly determined values are fed into the model which is solved for each set. The output represents a wide range of yield values and macroeconomic settings that may be relevant during the Outlook period. As an example, for the oil price in 2008, the 10th percentile is USD 73 per tonne and the 90th percentile is USD 140. Details on how the partial stochastic analysis has been performed are given in the Methodology section of the full Outlook report.

58

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ISBN 978-92-64-04590-3 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 © OECD/FAO 2008

Chapter 3

Macroeconomic and Policy Assumptions

59

3. MACROECONOMIC AND POLICY ASSUMPTIONS

The main underlying assumptions Robust economic growth in emerging economies and optimism for OECD countries after several setbacks Economic activity is now slowing with the distinct possibly of the US, the world’s leading economy, sinking into recession in 2008. The slowdown in the US and some other OECD economies is occurring despite continuing robust economic conditions in many other parts of the world. One cause of this moderation is the global credit crunch that has buffeted financial markets and shares worldwide recently. However, this shock has occurred in a period of robust economic performance and this has to some extent softened its impact. Another underlying cause is the cooling of housing markets, which will act to reduce consumers’ wealth and slow down growth in the future. Adding to the downside risks, is the fact that the financial turmoil that began over the 2007 summer has not yet come to an end, with the eventual fallout on the real economy still hard to gauge. At the same time, increases in the prices of oil, food and other commodities have led to a pick-up in headline inflation rates in many countries, reducing purchasing power and consumer demand, the stalwart of growth in many OECD economies. The strength of the housing market in the majority of OECD countries had already slowed before the emergence of the recent turmoil on financial markets, with housing investment and house price inflation decelerating in most countries. The question is whether the adjustments taking place in the housing market will impact adversely on consumption demand and lead to an overall decline in growth or be contained to this market and result in the removal of one ingredient which was previously seen as a key factor in underpinning consumer demand. Within this context, growth prospects for OECD countries in the short and longer term are just above 2% (annual average). Despite the persistence of financial and housing market turmoil, adjustments in monetary policy by the Federal Reserve in the United States are expected to be sufficient to keep the US out of recession. At the time of writing this Outlook, the decline in real house prices in the United States has not yet been translated into weaker private consumption. In Japan, the export sector is expected to continue to support economic activity, but its efficacy should decline as the benefits of past improvements in competitiveness fade and recent exchange rate appreciation partially reverses the earlier gains. With the exception of Mexico, none of the OECD countries are expected to achieve stronger growth than in the previous years (Figure 3.1). Mexico solidifies its position as a growth leader within the OECD with GDP growth rates around 4%. Strong economic activity remains a feature of Korea and Turkey with, respectively, 4% and 5.4% growth per annum. However, the performance of these economies remains dependent on what happens to the larger economies of the OECD area and elsewhere. Robust activity in the main emerging economies is projected to remain a major driver of global economic expansion in the near term. In the medium and longer term a modest

60

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

3.

MACROECONOMIC AND POLICY ASSUMPTIONS

Figure 3.1. Lower GDP growth in selected countries Annual growth in real GDP, percentage change from previous period 2005-2007

2008-2011

2008-2017

Annual percentage growth 6 5 4 3 2 1 0 Australia

Canada

EU15

Japan

Korea

Mexico

New Zealand

Turkey

United States

OECD29

Annual percentage growth 12 10 8 6 4 2 0 Argentina

Brazil

China

India

Russia

South Africa

1 2 http://dx.doi.org/10.1787/381348211474 Note: Average annual growth is the least-squares growth rate (see glossary). Source: OECD Economic Outlook No. 82 (December 2007), World Bank Global Economic Prospects 2008 (November 2007).

deceleration is projected. China and India will remain growth leaders among developing countries, with substantial market expansion and GDP growth anticipated for each country as they become further integrated into the global economy and world trade. In China, GDP growth is expected to slow somewhat from extremely high levels in the long term, but is still to remain substantial. Growth in India should remain strong despite a recent currency appreciation (Figure 3.3). In Brazil, exports and strong domestic demand will continue to support economic activity, with a robust growth, supported by an expected depreciation of the Real in coming years.

Population is expected to slow in the coming decade Population prospects and dynamics are important determinants of the future global economic environment, affecting both the supply and demand for agricultural commodities. Population growth over the next decade will decline relative to the last 10 years to an average of 1.1% annually to reach approximately 7.4 billion in 2017. The OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

61

3. MACROECONOMIC AND POLICY ASSUMPTIONS

largest population growth is expected in Africa (annual average above 2%), whereas in Europe, population is expected to essentially stabilise over the coming decade (Table 3.1). In the European Union, population is projected to grow at less than half the rate of the previous decade at 0.2% per annum for EU15 and 0.1% per annum for EU27. The same scenario is projected for Korea for the next decade. Within the OECD area, Turkey, Mexico, Australia and the United States maintain their leadership positions in terms of population growth. On the other hand, some decline is expected in Japan with –0.18% growth per annum to 2017.

Table 3.1. Slow down in population growth Average annual growth over 10 year period, percentage Population 1998-2007

2008-2017

1.23

1.12

Africa

2.37

2.21

Latin America and Caribbean

1.28

1.14

North America

1.01

0.88

Europe

0.30

0.10

Asia and Pacific

1.27

1.11

Oceania Developed

1.18

World

0.92

1 2 http://dx.doi.org/10.1787/384856142260 Note: Average annual growth is the least-squares growth rate (see glossary). Source: UN World Population Prospects (2006 Revision).

Population growth in China is assumed to follow the current slow trend for the next decade, at close to 0.66% per annum (adding approximately 9 million additional people each year). High population growth is predicted in India and Brazil with growth of 1.31% and 1.16% per annum, respectively.

Despite recent hikes in food prices, inflation throughout the OECD should remain at levels close to 2% per annum Despite recent hikes in food prices, global growth and world trade expansion, general price levels in many countries have remained remarkably stable. This has reinforced expectations that inflation in OECD countries will remain low in the long-term. Measured by the Private Consumer Expenditure (Deflator (PCED), low inflation will continue in the coming decade. For OECD countries as a whole, inflation is assumed to be just above 2% per annum. High consumer price inflation continues to plague Turkey, Russia and India with levels above 5% per annum. Inflation in Russia is, nevertheless, expected to fall to less than half the prevailing rate during 2005-07. A significant decline is also assumed for Argentina, with inflation at below 5% per annum. In the United States the Federal Reserve has attempted to counteract the financial turmoil through monetary policy adjustments, notably reducing interest rates and facilitating loans to banks. But behind the cheaper credit lies the risk of emerging inflation in the period ahead through fuelling excessive demand for goods and services. The recent emergence of high food price inflation in China is not reflected in the Outlook assumptions. Increased purchasing power and supply disruptions are key elements to explain this recent climb in food prices.

62

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

3.

MACROECONOMIC AND POLICY ASSUMPTIONS

Figure 3.2. Despite an increase in some countries, inflation expected to remain under control 2005-2007

2008-2017

Annual percentage growth 12 10 8 6 4 2 0

n pa Ja

da na

in

a Ca

15 EU

a re

Ch

OE

Ko

29

d

CD

an al

at

lia Ne

w

Ze

st Au

St d i te

Un

ra

es

o ic

a

ex

Af h

M

ric

il az Br

a di

So

ut

nt ge Ar

In

in

ia ss

y Ru

ke Tu r

a

-2

1 2 http://dx.doi.org/10.1787/381476682356 Note: Average annual growth is the least-squares growth rate (see glossary). Source: OECD Economic Outlook No. 82 (December 2007), World Bank Global Economic Prospects 2008 (November 2007).

World oil price is expected to remain at high levels The world oil price assumption underlying this year’s Agricultural Outlook is based on that published in the OECD Economic Outlook No. 82 (December 2007). It assumes prices will slowly increase over the Outlook period from USD 90 per barrel in 2008 to USD 104 per barrel by 2017. However, future oil prices are a major uncertainty in the Outlook. Some analysts emphasise that high oil prices will slow down demand, ultimately reducing the price of oil. Others argue that consumption, production and processing capacities are inelastic, sustaining continued high, or even further increasing, prices. This year’s Agricultural Outlook is based on the high price scenario. Price pressure thus far has been maintained as geopolitical tensions combine with processing capacity constraints to keep global supply from the major oil producers below effective demand.

Inflation will drive down the value of certain dynamic economy currencies over the longer term Under an assumption of constant real exchange rates, inflation differentials vis-à-vis the United States are the primary determinant of projections for exchange rates over the Outlook period. This implies a strengthening of the US dollar against most currencies. Assumptions on exchange rates are critical to the baseline projections as they can strongly influence relative competitiveness and hence agricultural trade across regions. The US dollar is the currency in which the majority of agricultural trade is denominated. Over the course of the Outlook period, the euro exchange rate is projected to remain stable. However, very low levels of inflation in Japan relative to the United States mean that the yen is expected to appreciate further. The currencies of high growth/high inflation countries such as Brazil, India, Turkey and South Africa will depreciate most over the medium term, improving their prospects for agricultural exports, while putting a break on imports with the change in their terms of trade.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

63

3. MACROECONOMIC AND POLICY ASSUMPTIONS

Figure 3.3. US dollar strengthening against most other currencies In local currency versus US dollar 2007-2009

2007-2012

2007-2017

Annual percentage growth 10 8 6 4 2 0 -2 -4 -6 Japan

Canada

China

EU15

Korea

New Australia Mexico Zealand

South Africa

Brazil

India Argentina Russia

Turkey

1 2 http://dx.doi.org/10.1787/381502738604 Note: Average annual growth is the least-squares growth rate (see glossary).

Domestic support and trade policies affect agricultural markets Agricultural and trade policies play an important role in both domestic and international markets for agricultural commodities and food products. Agricultural policies are becoming increasingly targeted and directed towards achieving specific objectives and beneficiaries within broader objectives in relation to national, regional or global concerns. At the same time, non-agricultural policies, such as energy, environment and rural development policies, are having a growing impact on the agri-food sector. Policies influence the composition and levels of both production and consumption, thereby creating (or sometimes correcting) market distortions and influencing prices. There is a tendency towards increased price responsiveness on the supply side with ongoing policy reform in some OECD countries. Also, relatively elastic supply and demand in a growing number of developing countries, coupled with an increasing share of these countries in world trade, has assisted adjustments in agricultural markets. No conjecture is included in the Outlook projections for the future outcome of negotiations underway in the WTO for the Doha Development Agenda and, consequently, it is assumed that trade policies as agreed in the Uruguay Round Agreement on Agriculture (URAA) will hold for the entire period to 2017. Trade flows are increasingly influenced by policies that have been negotiated as part of regional trade agreements such as the North American Free Trade Agreement (NAFTA), the Everything But Arms (EBA) initiative of the European Union and the Mercosur Agreement between Argentina, Brazil, Paraguay and Uruguay. The policy assumptions of the Outlook take into account the provisions of these agreements, in addition to existing bilateral preferential trade provisions covering specific agricultural commodities. Regional or bilateral trade agreements have not always been explicitly taken into account in the underlying modelling system but allowance for such agreements has been made where they are expected to have an impact on growth in trade. This is the case for both the Central American Free Trade Agreement (CAFTA) and the Free Trade Agreement with Australia (AUS FTA), which is expected to have a substantial impact on Pacific region beef trade.

64

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

3.

MACROECONOMIC AND POLICY ASSUMPTIONS

This Outlook makes no anticipation of changes to agricultural policies which may be part of forthcoming farm legislation in the United States. Although current legislation is due for expiry in 2007, the programmes and provisions of the Farm Security and Rural Investment Act (FSRI) of 2002 are assumed to continue for the entire Outlook period and moreover, no changes are anticipated in crop loan rates which are extended at constant levels through to 2017. The requirements of the Renewable Fuels Standard in the United States (the Energy Policy Act of 2003, modified in 2005) have been taken into account, as discussed elsewhere in this report under the assumptions related to biofuel production. In December 2007, the US Energy Independence and Security Act (EISA) was signed into law. This new energy legislation is not taken into account in this Outlook. Neither are the proposals for the new biofuels directive in the European Union. The main policy elements of the EU Common Agricultural Policy Reform of 2003, as described in previous editions of the Outlook, are assumed to remain unchanged. The EU set-aside rate is assumed to be 0% in 2008 but to be set at 10% again in the years thereafter. For other countries, established support measures and policy programmes (such as PROCAMPO in Mexico) are implemented as legislated. Where well-defined termination dates exist, they are factored into the projections; otherwise payments, provisions and other policy measures are assumed to continue through 2017. For sugar, projections take into account the EU sugar reform implemented as of 1 July 2006. These included the progressive reduction of import duties, followed by unrestricted sugar exports to the EU from LDC countries under the EBA initiative from 2009 and other ACP countries under Economic Partnership Agreements from 2015. Other policy changes included the elimination from 2008, of all remaining trade restrictions and duties on North American sugar trade in conformity with the NAFTA.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

65

ISBN 978-92-64-04590-3 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 © OECD/FAO 2008

Chapter 4

Biofuels

67

4. BIOFUELS

World market trends and prospects Key market drivers High energy prices and growing concerns on global warming have, among other factors, increased public interest in renewable energies in general. Within these, biofuels – liquid transport fuels produced from biomass – receive particular attention; production technologies based on starchy, sugary or oily agricultural commodities (such as cereals, sugar cane and oilseeds, respectively) are relatively simple, and the resulting fuels – ethanol and biodiesel – can be used in conventional combustion engines with no or comparatively little modifications.1 While the OECD/FAO Agricultural Outlook 2007-2016 for the first time explicitly considered feedstock use for biofuel production as an important factor in agricultural markets, this Outlook report includes full projections for supply, demand, trade and prices of ethanol and biodiesel. Production and use of both ethanol and biodiesel have increased significantly in recent years. Production of fuel ethanol tripled between 2000 and 2007 to reach 52 billion (bn) litres (F.O. Licht’s, 2008), and while the US and, to a lesser degree, Brazil, accounted for the majority of this growth, a large number of other countries have begun or increased fuel ethanol production as well. Biodiesel output saw an even more pronounced expansion over the same period, having grown from less than 1 bn litres to almost 11 bn litres. Until 2004, the EU accounted for more than 90% of global biodiesel production, but with increased

Figure 4.1. Production costs of major biofuel chains Co-product value

Feedstock costs

Net price gasoline

Net costs, total

Processing costs

Energy costs

US$ per litre of gasoline equivalent 2.0 1.8 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0 -0.2 -0.4 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 2004 2005 2006 2007 Ethanol Sugar cane Brazil

Ethanol Maize United States

Biodiesel Rape oil EU

Ethanol Ethanol Sugar beet Wheat EU EU Year, fuel type, feedstock, country

1 2 http://dx.doi.org/10.1787/381506048475

68

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

4. BIOFUELS

biodiesel output in many other countries, in particular the US, this share has declined to less than 60% in 2007 (F.O. Licht’s, 2008; EBB, 2008; EIA, 2008; Agra-Informa, 2008). With crude oil prices having doubled between 2004 and 2007, the value of biofuels as substitutes for, or blending components in, petrol-based gasoline and diesel has increased significantly. This, however, was not sufficient to improve the economic viability of most biofuel production processes: as world prices for a number of feedstocks including maize, wheat and vegetable oils have increased by 86%, 110% and 91% during the same period, costs of ethanol and biodiesel production in OECD countries have increased significantly. Indeed, in many cases the gap between biofuel production costs and the energy value of the final fuel has further widened (Figure 4.1). In consequence, biofuel production and use in most countries remains dependent on public support,2 and despite this support, profit margins have declined considerably and in many cases have become negative. With continued rises in crude oil and biofuel prices over the next few years, however, the economic situation of biofuel producers is expected to improve.

Main market developments – ethanol Global ethanol production to increase rapidly as ethanol and feedstock prices stabilise at higher levels Global ethanol production is projected to increase rapidly and to reach some 127 bn litres, twice the quantity produced in 2007 (Figure 4.2). World ethanol prices exceed USD 55 per hectolitre in 2009 as crude oil prices rise, but will fall back to levels around USD 52 per hectolitre as production capacities expand. Following the increased mandates and other forms of support to biofuel demand, international trade in ethanol will grow rapidly to reach 6 bn litres in 2010 and above 10 bn litres by 2017. Most of this trade will originate in Brazil, and be imported by the EU and the United States.

Figure 4.2. World ethanol projections World ethanol production

World ethanol trade

World ethanol price

Billion litres

US$ per hectolitre

140

70

120

60

100

50

80

40

60

30

40

20

20

10 0

0 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/381520820110

European Union EU ethanol use in low-level blends is largely determined by mandates in several Member States, while the amount of ethanol used in high-level blends (E85) in flex-fuel vehicles remains limited despite tax advantages. The share of ethanol in gasoline types of OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

69

4. BIOFUELS

transport fuel grows substantially, but production costs particularly of grain-based ethanol are projected to remain high relative to fossil gasoline due to cereal prices’ staying well above historical levels. With 4.9%, this share remains below the 5.75% target in energy terms3 set out in the 2003 biofuel directive,4 unless additional policy measures come into force or technological developments significantly improve economic viability. Total ethanol use reaches 15 bn litres by 2017 – almost tripling from its 2007 level (Figure 4.3). Ethanol production in the EU remains dominated by wheat as the main feedstock, followed by coarse grains and sugar beet. Domestic ethanol supply increases by more than 10% per annum on average, but remains significantly below domestic use. Cereal use for ethanol production increases to almost 24 million (m) tonnes by 2017, more than 4 times the 2007 quantity; 81% of these cereals are projected to be wheat. Sugar beet use increases significantly in 2008 and further until 2011, but remains largely unchanged thereafter. Despite an important import tariff, net imports of ethanol increase to around 3 bn litres by 2009 and 2010 following the strong increase in blending obligations which can only partially be met by EU production. As production capacities increase, EU net imports of ethanol should fall to between 2 and 3 bn litres per annum.

Figure 4.3. EU ethanol market projections Production

Total use

Net trade

Billion litres (production, use)

Billion litres (net trade)

16

0

14

- 0.5

12

- 1.0

10 - 1.5 8 - 2.0 6 - 2.5

4

- 3.0

2

- 3.5

0 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/381546056723

Canada Ethanol use in Canada is largely driven by blending obligations,5 supported by tax exemptions in several provinces.6 Ethanol consumption reaches almost 3 bn litres by 2012 (Figure 4.4), with a share in gasoline type fuel use of just over 4% (6% in volume terms), but grows only in line with overall fuel use thereafter. Canadian ethanol production growth will largely keep pace with domestic ethanol use for the first half of the projection period, but slows down as producers’ margins decline after 2010 due to lower ethanol prices. Most of the ethanol is produced from maize – partly domestically grown and partly imported from the US – while a smaller quantity comes from wheat. With production growth slowing from 2010, net imports are projected to float between 0.25 and 0.4 bn litres per annum for the second half of the projection period despite a tariff for non-NAFTA imports.

70

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

4. BIOFUELS

Figure 4.4. Canadian ethanol market projections Production

Total use

Net trade

Billion litres (production, use)

Billion litres (net trade) 0.10

3.5

0.05

3.0

0 2.5

- 0.05 - 0.10

2.0

- 0.15 1.5

- 0.20 - 0.25

1.0

- 0.30 0.5

- 0.35 - 0.40

0 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/381637431042

United States US ethanol use, supported mainly by tax credits to fuel blenders, doubles between 2007 and 2017 (Figure 4.5). Growth should slow down, however, as ethanolgasoline price ratios stabilise. By 2017, the ethanol share in gasoline type fuels, which was 3.4% in 2007, should reach 6% in energy terms, or close to 9% in volume terms. While the majority of ethanol will be used in low-level blends with gasoline, some 7% will be consumed as high-level blends (E85) in flex-fuel vehicles, which are assumed to represent some 3% of the vehicle fleet by 2017. Despite producer margins improving somewhat after having been negative in 2007 due to high corn- and low ethanol prices, production growth is slowing down significantly after 2009, to reach some 52 bn litres by 2017. In consequence, net imports are expected to grow and to reach some 9% of the ethanol used in the US by 2017. Still, with 41% of global production, the US remains the largest ethanol producer.7

Figure 4.5. US ethanol market projections Production

Total use

Net trade

Billion litres (production, use)

Billion litres (net trade)

70

2

60

1 0

50

-1 40 -2 30 -3 20

-4

10

-5 -6

0 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/381651434223

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

71

4. BIOFUELS

Other OECD Australian ethanol production and consumption grows from very low levels. The ethanol share in gasoline type fuel use is assumed to increase from near zero to 3.3% between 2007 and 2010, but to remain almost unchanged thereafter. Most of the Australian ethanol production is based on coarse grains, but molasses is assumed to remain an important feedstock, too. Ethanol production in Turkey is set to reach 81 million litres by 2017, about 47 m litres below projected consumption. Ethanol net imports by Japan more than double between 2007 and 2017 and reach almost 1.5 bn litres, following the political will to stimulate ethanol use as a transport fuel.

Brazil Ethanol production in Brazil remains a rapidly expanding sector, growing by more than 6% on average over the 10 year projection period (Figure 4.6). With sugar cane remaining the cheapest of the main feedstocks for ethanol, Brazil will continue to be very competitive on expanding international markets. Growth in domestic use is driven mainly by the growing fleet of flex-fuel vehicles (expected to account for more than half the vehicle fleet (67% of the spark-ingestion cars) in Brazil by 2017), and total ethanol use is projected 32 billion litres by 2017 as the ethanol price at the pump remains significantly and increasingly lower than that of gasoline. Despite this growth in domestic use, Brazil expands its ethanol exports and remains the world’s largest ethanol supplier, with net trade reaching 8.8 bn litres by 2017. By that year, 85% of global ethanol exports are projected to originate in Brazil.

Figure 4.6. Brazil ethanol market projections Production

Total use

Net trade

Billion litres (production, use)

Billion litres (net trade)

45

10

40

9

35

8 7

30

6

25

5 20

4

15

3

10

2

5

1 0

0 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/381740146062

China Until recently, China had ambitious expansion plans for its ethanol sector. Following the high food prices, however, the focus on ethanol production particularly from grains was reduced somewhat. In consequence, while ethanol consumption is set to about double by 2017, domestic production is projected to fall short of ethanol use. This means that the country switches from being a net exporter to becoming a net importer of ethanol by

72

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

4. BIOFUELS

around 2016, even though traded quantities are projected to remain small. While much of the growth will be based on corn, other feedstocks such as sweet sorghum, other lowquality cereals and sweet potatoes are also important sources, or are subject to ongoing research in the context of ethanol production.

Colombia Besides Brazil, Colombia is the only other South American country which has established a fuel ethanol sector in recent years. Based on sugar cane, ethanol production for fuel use began in 2005 and reached about 420 m litres in 2007, growing to 800 m litres in 2017. Since 2006, domestic consumption has been governed by blending requirements of 10% in cities with populations exceeding 500 000. Lower blending ratios can be authorised in smaller cities. Based on these regulations, domestic use is projected to stay relatively flat, leaving an increasing exportable surplus. The US-Colombian Trade Promotion Agreement will eliminate US import duties on ethanol and biodiesel from Colombia which will stimulate exports to the US market.

Africa There is substantial interest in developing ethanol production in Africa, and investments are being made in many African countries. Developing a biofuels/bioenergy sector is considered an important opportunity for development, as a generator of higher rural incomes, and as a substitute for high cost imported energy. Potential feedstocks include maize and cassava, but these have been ruled out in some countries as these crops are considered food security crops. The most important feedstocks are both sugarcane and molasses, although most, if not all, of current production is from molasses. The economics of exporting for some least developed countries such as Mozambique and Tanzania may be influenced considerably by the EBA initiative which would allow these countries to export ethanol duty free into the EU, taking advantage of a high tariff preference incentive. However, a fuller assessment of this is necessary, as tariff free access to the sugar market also may affect sugar versus ethanol production and exports from these countries. Total ethanol production in African countries included in this projection totals over 800 m litres by 2017, more than twice current production levels. While there appears to be much room for yet higher growth, a careful assessment of the implications of increased biofuel production for food availability and food prices, and in particular the implications for the poorest, is required.

Thailand In Thailand, ethanol production is projected to reach 1.8 bn litres, with roots and tubers displacing molasses and cane as the main feedstocks. Ethanol consumption is set to expand by 19% over the projection period to reach 1.5 bn litres in 2017. This growth is underpinned by Government objectives to reduce reliance on imported oil and to meet the rising demand for energy. The energy share from ethanol in gasoline type fuel is assumed to increase from 2% to 12% between 2008 and 2017. Thailand is foreseen to export up to 600 m litres annually during the projection period.

India and others In light of depressed domestic sugar prices, the Government of India is keen on developing a biofuel industry to provide sugarcane producers with a viable and sustainable alternative source of revenue. Ethanol production is set to increase to 3.6 bn litres, while

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

73

4. BIOFUELS

consumption is projected at 3.2 bn litres, leaving about 383 million litres for net trade. With favourable margins on fuel ethanol production, plant capacity should rise annually by 8.3% between 2008 and 2017. Ethanol production in Vietnam, the Philippines, Malaysia, and Indonesia is projected at 532 m litres, 126 m litres, 84 m litres, and 227 million litres, respectively.

Main market developments – biodiesel Global biodiesel production and use remains driven mainly by public policy Stimulated by mandates and tax concessions in several countries, predominantly in the European Union as the largest biodiesel market, global biodiesel production is set to grow at slightly higher rates than ethanol – though at substantially lower levels – and to reach some 24 bn litres by 2017 (Figure 4.7). World biodiesel prices remain well above production costs of fossil diesel, and float within the USD 104-106 per hectolitre for most of the projection period. As in the case of ethanol, increased mandates should drive international trade up in the initial years of the Outlook, but little change in total trade is projected for the out years. Most of the trade is projected to originate in Malaysia and Indonesia with the EU as the main destination.

Figure 4.7. World biodiesel projections World biodiesel production

World biodiesel trade

World biodiesel price

Billion litres

US$ per hectolitre

25

125

20

100

15

75

10

50

5

25

0

0 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/381815833574

European Union Biodiesel use in the EU remains bound by mandated blending, following increasing obligations in several member States, while others offer substantial tax concessions to biodiesel consumers. While biodiesel production costs remain significantly above net costs of fossil diesel, both these tax reductions and the blending obligations help to stimulate use and, finally, domestic production. The share of biodiesel in diesel type fuels is growing to some 5% (6.2% in volume terms) for a total biodiesel quantity of almost 15 bn litres. While declining slightly in relative terms, the EU is projected to still account for more than 60% of global biodiesel use by 2017. This strong demand will be met by both increased domestic production and growing biodiesel imports. Production margins are projected to improve considerably from the very difficult year 2007, but to remain tight. In consequence, production is set to fall short of domestic use particularly in the early years

74

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

4. BIOFUELS

of the projection period, and net imports, facing only modest tariffs compared to ethanol, could reach 2 bn litres in 2010 before stabilising at levels between 1.3 and 1.6 bn litres per year thereafter.8

Figure 4.8. EU biodiesel market projections Production

Total use

Net trade

Billion litres (production, use)

Billion litres (net trade)

16

0

14 -0.5 12 10

-1.0

8 -1.5

6 4

-2.0 2 0

-2.5 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/381864033105

Canada Canada is set to introduce a biodiesel blending mandate of 1.6% (2.0% in volume terms) by 2012. Tax-reductions at provincial levels further support biodiesel use, while concessions at the federal level have been replaced by a direct payment for biodiesel producers. With the price of biodiesel projected to decline relative to that of fossil diesel, biodiesel use in Canada could represent 2.8% (3.5 vol.-%) by 2017. Good producer margins due to high biodiesel prices are projected to stimulate Canadian biodiesel output to slightly outpace domestic use for much of the projection period, with net trade fluctuating between zero and some 80 m litres.9 These outcomes depend, however, on whether and how support may be changed once the national target of 2% in volume terms is reached.

Figure 4.9. Canadian biodiesel market projections Production

Total use

Net trade

Billion litres (production, use)

Billion litres (net trade)

0.7

0.10

0.6

0.08

0.5

0.06

0.4

0.04

0.3

0.02

0.2

0

0.1

-0.02 -0.04

0 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/381865747820

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

75

4. BIOFUELS

United States US biodiesel use, which tripled in both 2005 and 2006, is projected to remain largely unchanged between 1.3 and 1.7 bn litres throughout the projection period, as biodiesel remains expensive compared to fossil diesel (Figure 4.10), despite a blenders credit of USD 0.26 per litre (USD 1 per gallon). In consequence, the share of biodiesel in all diesel fuels declines to less than 0.5% in energy terms (0.6 vol.-%) by 2017. Producer margins are not expected to reach the high levels observed in 2005 and 2006 and biodiesel production is therefore projected to stagnate and, indeed, to decline. This in turn causes current net exports to disappear by the end of the projection period. Not taking into account the 2007 Energy Independence and Security Act (EISA), biodiesel is expected to continue to play only a minor role as a transport fuel in the US.10 With the continued payment of the blenders credit, however, the US is assumed to maintain an incentive for re-exports of foreign, in particular South-East Asian, biodiesel to regions with specific support to biodiesel use, such as the European Union.

Figure 4.10. US biodiesel market projections Production

Total use

Net trade

Billion litres (production, use)

Billion litres (net trade) 0.8

2.5

0.7 2.0 0.6 0.5

1.5

0.4 1.0

0.3 0.2

0.5 0.1 0

0 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/382005370030

Australia When compared to ethanol, biodiesel is projected to play a much more important role in Australia. Biodiesel use is set to double to 0.9 bn litres in 2008, equivalent to more than 8% of diesel type fuel use, and to increase thereafter with growing overall fuel use. While some 40% of the Australian biodiesel is expected to be produced from oilseed oils (soya, rapeseed and palm oil), the majority will be based on other feedstocks, including tallow and used cooking oil.

Brazil Biodiesel production in Brazil, which started in 2006, is projected to expand rapidly in the short term due to increased biodiesel prices and hence improved production margins. In the longer run, however, biodiesel production is set to slow down and to be limited to meet domestic demand, which should grow to some 2.6 bn litres by 2017 (Figure 4.11). By then, the share of biodiesel in total use of diesel type fuels is projected to be 3.6% (4.5 vol.%) – not anywhere close to the levels seen in gasoline markets in the medium term. Originally, biodiesel programs in Brazil were designed to foster the production of biodiesel

76

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

4. BIOFUELS

from non-food oil crops such as castor-beans from small farms, but soya oil use for biodiesel is expected to grow considerably as well.

Figure 4.11. Brazil biodiesel market projections Production

Total use

Net trade

Billion litres (production, use)

Billion litres (net trade) 0.4

3.0

0.3

2.5

0.2 2.0 0.1 1.5 0 1.0

-0.1

0.5

-0.2 -0.3

0 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/382018066804

Indonesia The Indonesian government reduced and then eliminated price subsidies on fossil fuels in 2005, allowing the biofuel industry to become economically viable. Biodiesel production started in 2006 on a commercial scale and expanded to an annual production of about 600 m litres by 2007. Fuelled by domestic palm oil production, the industry enjoys a competitive advantage which will propel Indonesia to become the second largest producer in the world. It is anticipated that production will expand rapidly throughout the entire projection period, reaching 3 bn litres by 2017. Based on the consumption targets established by the government, domestic demand is expected to develop right along with production. By 2025, biodiesel should account for 20% of the national transportation diesel oil consumption, or 5% of total national consumption.

Figure 4.12. Indonesia biodiesel market projections Production

Total use

Net trade

Billion litres (production, use)

Billion litres (net trade)

3.5

0.9 0.8

3.0

0.7 2.5 0.6 2.0

0.5

1.5

0.4 0.3

1.0 0.2 0.5

0.1

0 2005

2006

2007

2008

2009

2010

2011

0 2014 2015 2016 2017 1 2 http://dx.doi.org/10.1787/382027265365 2012

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

2013

77

4. BIOFUELS

Malaysia Malaysia is the second largest palm oil producer in the world which puts it also in a prime position to play a major role in the world biodiesel market. Biodiesel production started in 2006 on a commercial scale and expanded to an annual production of about 360 m litres by 2007. Steadily expanding domestic palm oil production serves as the basis for a rapid growth of the biofuel industry during the coming decade. Production is projected to expand at a rate of about 10% annually reaching 1.1 bn litres by 2017. In the absence of consumption mandates, domestic use is not expected to expand significantly. The industry will be predominantly export-oriented with the EU as its target market.

Figure 4.13. Malaysia biodiesel market projections Production

Total use

Net trade

Billion litres (production, use)

Billion litres (net trade)

1.2

1.2

1.0

1.0

0.8

0.8

0.6

0.6

0.4

0.4

0.2

0.2 0

0 2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/382057482765

Biodiesel from jatropha Investments in jatropha curcas production have been made with the purpose of stimulating biodiesel production on marginal lands in Africa and India. Behind these investments were high bio-diesel prices and an interest in developing rural economies and in reducing dependence on imported oil, which is costly to transport to interior locations with poor infrastructures. It is difficult, if not impossible, to establish a projection for production, as experience with commercial production of this crop is limited. In this Outlook, preliminary estimates for Ethiopia, Tanzania, Mozambique and India have been undertaken which show a total production between 60 000 and 95 000 tonnes per country. For African countries, it is assumed that all bio-diesel production will come from jatropha seed, as limited budgets and high vegetable oil prices are restraints on any biodiesel production from that feedstock. The potential of jatropha – and related biodiesel production is one of the uncertainties in the Outlook.

Key issues and uncertainties While biofuel developments have become a major driver in agricultural markets, a number of uncertainties affect the projections for biofuel use, trade and production. Most importantly, the projections outlined above assume that basic agricultural commodities, including cereals, sugar cane and beet, molasses, roots and tubers such as cassava, and vegetable oils such as rape and palm oil, will continue to represent the vast majority of the

78

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

4. BIOFUELS

feedstocks for ethanol and biodiesel throughout the decade to come. Technical and economic constraints are assumed to remain prohibitive in the production and marketing of biofuels produced from other feedstocks that do not directly compete with their use for human or animal nutrition.11 In particular, ethanol produced from celluloses and other plant material (both crop residues such as straw, and dedicated biomass such as willow trees and switchgrass), and biomass-based diesel fuels (so-called Biomass-To-Liquid or BTL) are assumed to remain economically unavailable at any meaningful scale during the projection period. It should be noted, however, that in numerous countries, significant efforts have been made to overcome existing constraints; it is possible now that first commercial production plants for second-generation biofuels might appear online during the decade to come. Indeed, existing or upcoming biofuel legislation in a number of countries, including in particular the US and the EU, is based on the expectation that these products will represent a considerable share of biofuel supply in rather a short time. This would significantly alter the interactions between biofuel production and agricultural markets, in particular where feedstocks for these fuels would come either from crop residues or from land not suitable for food production.12 Other uncertainties relate to future developments in fossil energy markets – in particular, the development of crude oil prices is likely to be key in further biofuel growth – as well as in agricultural markets. While biofuel production and corresponding crop use obviously creates an important and growing additional demand on the commodity markets, feedstock prices represent a large share in total biofuel production costs and hence have a significant impact on the economic viability of the sector. Prices for both coarse grains and vegetable oils are, when expressed in US dollars, projected to remain at relatively high levels compared to the past, despite some decline in the short run, and sugar prices should increase after 2008. In consequence, production costs for most biofuels are likely to remain an important constraint over the projection period. Finally, it should be noted that in most countries, biofuel production remains dependent on public support. Tax concessions and tax credits mainly encourage biofuel use where production costs are above those for fossil fuels, blending obligations stimulate demand for biofuels at the cost of consumers, import tariffs protect domestic biofuel producers from foreign – mainly southern – competition. The discussion about potential and actual benefits from supporting biofuel production and use is ongoing, and support schemes are in rapid development.

Box 4.1. The US Energy Independence and Security Act In December 2007, the US Energy Independence and Security Act (EISA) was signed into law. This new energy legislation defines, among other elements, a new Renewable Fuel Standard calling for US biofuel use to grow to a minimum of 36 billion (bn) gallons per annum (bngy) or 136 bn litres per annum (bnly) by 2022. Corn-based ethanol is to grow to 15 bngy or 57 bnly until 2015 and to remain constant thereafter. Given that the US is the only major producer of corn ethanol, this consumption requirement can be seen as a production mandate as well. Requirements for first-generation biodiesel are given only for the period 2009-12. Beyond 2012, further growth in biodiesel use is included in a total for biofuels other than corn-based and cellulosic biofuels. Production of biofuels from cellulosic materials is scheduled to start in 2010 at low levels, but with 16 bngy (60.6 bnly) to represent the bulk of biofuel use in 2022. The EISA institutes several safeguards that allow waiving some or all of these requirements in the case of adverse impacts on agricultural markets or for fuel cost reasons.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

79

4. BIOFUELS

Box 4.1. The US Energy Independence and Security Act (cont.) While these requirements are not taken into account in the baseline for this Outlook, and no second-generation biofuels are assumed to become available on a commercial scale within the baseline period, a full implementation of the EISA would imply changes in agricultural market projections relative to those outlined in this report. US corn use for ethanol production would be higher by up to 14.2 million tonnes (mt), whereas the requirements of soya oil would more than double to some 3.7 million tonnes (mt) by 2017. Despite the increase in US biodiesel production, the US would become a major importer of this fuel.a The implications of the growth in second-generation biofuels can only be approximated as it depends on a large number of factors. In particular, ethanol from corn stover and straw would have very different market and environmental effects than ethanol from dedicated biomass such as switch-grass or fast growing wood. Also, different biomass crops could have quite different yields of dry matter and hence of ethanol per hectare. It is assumed that ethanol and BTL yields from biomass increase from 31 to 43 hl/ha and from 26.2 to 29.7 hl/ha, respectively, both due to higher biomass yields and improved conversion. It is further expected that crop residues will represent the majority of the feedstock used in the initial years, but that this will be increasingly overtaken by dedicated biomass. Despite the yield improvements, the large production of second-generation biofuels would likely require the re-allocation of substantial amounts of crop area into dedicated biomass production and hence reduce US crop supplies.b In consequence, international prices for most commodities would be higher than projected. The impact of higher biodiesel use would be particularly pronounced, resulting in substantially higher prices for biodiesel as well as for vegetable oils. The reduction in US crop land due to production of fuel-biomass would further increase prices, an effect that is particularly important for coarse grains due to the relative importance of the US in international grains markets.

Figure 4.14. Potential impact of the US EISA on world commodity prices, 2013-17 average First generation fuels

Second generation fuels

Change compared to baseline (%) 10

5

0

-5 Wheat

Coarse grains

Oilseeds

Vegetable oils

Oil meals

Sugar

Ethanol

Biodiesel

1 2 http://dx.doi.org/10.1787/382126831185 a) In this analysis growth in first-generation biodiesel is assumed to represent half the increase in biofuels other than maize and cellulose-based ones. In consequence, first-generation biodiesel use would increase to 1.675 bngy or 6.3 bnly by 2017, compared to little more than 1.6 bnly projected in the baseline. b) In principle, the biomass could be produced on land not otherwise used for crop production. In that case, the impact on crop markets would obviously be minimised. It is, however, unlikely that all the biomass could be produced on marginal and other unused area. Here, it is assumed that 50% of the biomass would come from crop land.

80

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

4. BIOFUELS

Notes 1. Technical constraints and other technical questions related to ethanol and biodiesel are discussed in OECD (2006): Agricultural Market Impacts of Future Growth in the Production of Biofuels. 2. This Outlook does not consider the EU Directive of Renewable Energy, proposed by the EU Commission in early 2008, nor the US Energy Independence and Security Act. As the latter was signed into law in late 2007, a box at the end of this chapter deals with its potential implications for the baseline. 3. Note that this target, set by the 2003 EU Biofuel Directive, is indicative only. All biofuel use shares are expressed on the basis of energy contained unless otherwise specified. 4. A new directive currently discussed, raising biofuel shares to 10% by 2020, is not taken into account. 5. Assumptions include a 10% blending mandate in Ontario not yet enacted. 6. Tax exemptions on the federal level were eliminated in 2008 and replaced by a direct payment scheme. 7. These projections do not account for the US Energy Independence and Security Act as recently passed. For a discussion of potential implications see the special box. 8. Biodiesel from palm oil faces some technical problems in the colder climates of northern Europe where in winter times it may block up fuel filters. Without further treatment its use in these areas is therefore limited. 9. Note that the Canadian biodiesel use might be underestimated here due to its blending into heating oil as well. 10. See the special box on the US Energy Independence and Security Act for a discussion of potential implications. 11. This Outlook considers explicitly an expansion of biodiesel on the basis of non-food feedstocks, such as tallow used cooking oil, and jatropha. Quantities remain small, however, when compared to vegetable-oil based biodiesel production. 12. An analysis of these issues is part of an upcoming OECD report.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

81

ISBN 978-92-64-04590-3 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 © OECD/FAO 2008

Chapter 5

Cereals

83

5. CEREALS

World market trends and prospects* Key market drivers In spite of the increase in world cereal production in 2007, a tight global cereal supply and demand situation prevailed throughout the whole marketing season. The bulk of the increase in world cereal production came from a record maize harvest in the United States, which boosted world coarse grains output in 2007. Wheat production also increased compared to the previous year but not as much as expected because of unfavourable weather conditions in some parts of the world; especially droughts in eastern parts of Europe and Australia. World rice production increased marginally in 2007, mostly driven by larger harvests in Asia. However, total cereal supplies remained low in comparison to world demand, which showed little sign of abating despite high prices. The increase in world production was not sufficient to compensate for dwindling stock levels, carried over from the previous season. As a result, world cereal reserves are expected to fall even below their already low opening levels at the end of the 2007-08 marketing season. In looking more closely at developments in 2007-08, cereal stocks held by major exporters were significantly depleted during the year, driven down by strong domestic demand and exports. These developments led to a rapid rise in world prices, starting in maize markets and spreading to wheat and rice markets as the season progressed. This price boom was also accompanied by much higher price volatility than in earlier seasons. Increased volatility reflected greater uncertainty in the market due to a tighter supply and demand balance for cereals, but increasingly, also due to developments in other agricultural markets as well as in energy and financial markets. Among the major cereals, the increase in wheat prices were most pronounced. In 2007, international wheat prices averaged close to 60% above the level in 2006. Low stocks and reduced 2006 production levels were among the many reasons for the initial increase, but other factors soon became more prominent. The increase in world prices was aggravated by a growing number of trade intervention policies as several exporting countries (including Argentina, China, and the Russian Federation) decided to put in place export restriction measures, ranging from quotas and punitive taxes to complete export bans, in order to contain rising domestic prices. Another important factor has been the slide in the US dollar against many currencies, the euro in particular, having made wheat imports from the United States cheaper. This is reflected in the surge of wheat imports from the United States which helped to push US wheat prices higher. In February 2008, for example, the export price of US No. 2 Hard Red Winter averaged USD 450, some 115% higher than a year earlier. In the coarse grains markets, maize prices increased progressively from the middle of 2006 through February 2007. This was followed by a brief period of declining prices as

* All dates are on a marketing year basis (e.g. 2007 represents the 2007/08 marketing year) unless stated otherwise. While in general these are June/May for wheat, September/August for coarse grains and January/December for rice, data for individual countries may use slightly different periods.

84

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

5.

CEREALS

markets began to take note of a huge increase in plantings in the United States, the world’s largest producer and exporter of maize. Indeed, the United States harvested a record crop in 2007 as plantings increased by over 16% and weather conditions remained favourable throughout the growing season. However, in view of the massive increase in domestic use of maize for production of ethanol in the United States and reduced export availabilities in a number of other exporting countries, maize prices resumed their upward trend. In 2007, international maize prices averaged 34% above 2006 and in February 2008, the US yellow maize (No. 2 Gulf) export price averaged USD 220 per tonne, some 25% above that of February 2007. The recent strength in maize prices was driven by similar factors responsible for the increase in wheat prices, such as export restrictions and the sliding dollar. Maize prices also benefited from soaring petroleum prices in world markets which increased the attractiveness of ethanol production in a context of substantial public support in many countries. This is a factor which is likely to continue to underpin prices in the coming years in the light of biofuel support measures and mandates for its use in the new United States and other countries. In the EU, feed shortages resulted in a robust import demand and this also provided support to international prices; not only of maize but also sorghum and other major coarse grains. Wheat is a leading grain used for feed in the EU. Following its production shortfall last year and limited export availabilities from the Black Sea, wheat prices in the EU continued to increase, a factor which encouraged imports of alternative feeds, especially maize and sorghum. In fact, the surge in imports by the EU was the single most important factor for the expansion of world trade in coarse grains in 2007 to a record level. Prices of barley, another important cereal, also soared in 2007. Supply problems in Australia and Ukraine, tighter availability of maize and other feed grains, compounded with strong import demand, have contributed to the doubling of prices of both feed and malting barley. Global paddy rice production increased by less than 1% in 2007; this was well below the rate of population growth. Much of the increase was concentrated in Asia, as adverse weather, often associated with “La Niña” conditions, depressed output in Africa, Latin America and the Caribbean (LAC) and Oceania. World rice trade expanded vigorously in 2007, sustained by a dynamic import demand, which, in the light of relatively short export availabilities and a weak US dollar, also fuelled a 17% increase in world prices to levels unseen since 1996. The rise in prices became particularly pronounced in the last quarter of 2007, when several key suppliers to the world market took measures to limit exports, and, even more so, in the first months of 2008. Given the prevailing high prices and prospects for strong prices to continue for at least another season, world cereal production is expected to increase in 2008. The bulk of the expansion is likely to come from higher wheat production but larger coarse grains and rice harvests are also expected in 2008. Assuming normal weather, production in many countries, which suffered from unfavourable weather conditions last year, is set to recover significantly this year, particularly in Australia, Canada, the EU, Morocco and Ukraine. Policy changes will also be an important factor in boosting production levels in 2008, such as the suspension of the 10% compulsory set-aside requirement in the EU. In response to high grain prices and as a notable departure from recent practices, many governments in developing countries also started providing more support to cereal production; by increasing procurement prices (e.g. for wheat in Pakistan) and/or boosting input subsidies (e.g. on fertiliser for maize production in the Philippines).

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

85

5. CEREALS

In spite of the expectation of a strong increase in production in 2008, given the low level of stocks, the global supply would still be tight considering the continuing strong demand prospects, especially for feed and fuels. As a result, the global supply and demand is projected to remain closely balanced which implies another season of high prices for most cereals. This strong price prospect is expected to prevail over the projection period. With the growth in production continuing, on the back of further advancements in yields, some increase in areas planted, and with demand for fuels stabilising in later years, a more comfortable supply and demand balance is projected to emerge by 2017. Yield growth, albeit lower than in the past decade, is expected to account for most of the growth in production as area expansion is limited largely to regions within the CIS countries and South America. These developments will result in lower prices than those observed in 2007, but the general trend will still exceed the low price levels which characterised the situation for most of the previous decade. Even in real terms, cereal prices tend to be above those of the previous years.

Figure 5.1. Nominal wheat, coarse grain and rice prices to remain relatively strong, increase in real prices compared to the last decade Nominal USD/t

Real

USD/t

USD/t

Maizeb

Wheat a

Rice c

380

300 160

280 200

120

100

180

80 1997

2007

2017

1997

2007

2017

1997

2007

2017

1 2 http://dx.doi.org/10.1787/382131305426 Note: Real prices are deflated using the US GDP Deflator (2000 = 1). a) No. 2 hard red winter, ordinary protein, wheat, US, f.o.b. Gulf Ports. b) No. 2 yellow corn, US, f.o.b., Gulf Ports. c) White rice, 100% second grade, f.o.b. Bangkok. Source: OECD and FAO Secretariats.

Main market developments: Wheat and coarse grains Food, feed and fuel use drive up demand for wheat; fuel and feed rule coarse grains Global demand for wheat in the next decade is expected to expand by around 1% annually. This represents a slightly faster growth than observed in the past and is mostly due to the projected increase in the use of wheat for production of biofuels among the OECD countries, particularly in Canada and in the EU27 (Figure 5.2). However, total wheat use for ethanol production remains small compared to expanding food and feed use. Indeed, food consumption in developing countries and animal feed use in the OECD area continue to increase as well. Half of world wheat feed use is currently located in the EU and this share is likely to remain stable over the Outlook period. Food consumption accounts for most of the growth in total wheat utilisation in developing countries, particularly in Asia

86

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

5.

CEREALS

Figure 5.2. Growing cereal demand inside and outside the OECD Food use

Feed use

Biofuel

Other use

Wheat

Coarse grains

Other

2017

2005-2007

OECD

2017

2005-2007

0

100

200

300

400 Million tonnes

0

100

200

300

400

500 600 Million tonnes

1 2 http://dx.doi.org/10.1787/382135207605 Source: OECD and FAO Secretariats.

and Africa. However, global wheat food consumption is projected to increase at a slightly slower pace than in the past decade. This mainly reflects slower population growth and changes in diets. Per capita food consumption of wheat in China and to a lesser extent in India are projected to decline as diets in those countries slowly shift towards more value added food driven by increased incomes. Total utilisation of coarse grains is projected to increase by just over 1% annually over the projection period, nearly half as fast as during the past decade, but a strong rate of growth nonetheless. This increase is partially driven by the projected rise in feed use to satisfy growth in meat production. However, industrial use is projected to increase even faster, mostly because of a continuing strong demand for maize as a raw material for the production of ethanol in the United States. In the OECD, total use of maize for production of biofuels is projected to expand by nearly 90 m tonnes between 2007 and 2017. Most of this increase takes place in the United States. In contrast, outside OECD countries, feed utilisation and food consumption will contribute to most of the increase in total demand. In recent years, China emerged as one of the largest users of maize for production of ethanol outside the United States. However, this trend is likely to slow down based on recent policy decisions to halt utilisation of food crops for industrial use.

Increasing wheat and coarse grain production World wheat production is projected to increase at a faster pace than in the previous decade; although by less than 1% per annum. Driven by high prices, the suspension of the compulsory 10% set-aside in the EU, and the expected recovery from two seasons of severe droughts in Australia, total area planted to wheat as well as average wheat yields are expected to rise sharply, boosting world wheat output in 2008. Following this initial strong growth, world wheat production is projected to keep pace with demand and reach roughly 690 m tonnes by 2017, up from 608 m tonnes in the 2005-07 base period. The EU, China, India and the United States are expected to remain the four largest wheat producers, with a combined share in total production of about 56%, slightly less than their current share. As in the previous decade, yield growth is projected to be the main factor for the increase in OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

87

5. CEREALS

world production in nearly all major producing countries. Total wheat area is also projected to increase, although the rate of growth will be slower than in the past, as competition with other crops (maize and oilseeds in particular) could lower wheat plantings in China, Brazil and the United States. Another country (albeit a small wheat producer) where production is projected to decline significantly over the projection period is Saudi Arabia, following a government decision to gradually phase out its production subsidy due to water constraints. In contrast, wheat area is projected to increase in Argentina, India and several countries in the CIS region. After a sharp rebound in world production of coarse grains in 2007, total production of coarse grains is projected to continue its expansion but at a slower pace throughout the projection period. Strong demand and higher relative returns set the scene for continuing high production levels during the projection period. Production is projected to increase most notably in the United States (maize and sorghum), China (barley and maize), Nigeria (maize, millet, and sorghum), Turkey (barley), the EU and Ukraine (barley and maize). With more than 1.2 bn tonnes in 2017, world coarse grains production is projected to grow more rapidly than wheat at an average rate of 1.3% per annum The United States, China and the EU will remain the three largest coarse grain producers, supplying about 60% of global production. While yield growth is projected to be less pronounced than in the previous decade, most of the increase in production would still be driven by the rise in yields. The area planted will also expand, albeit at a slower pace than in the past decade and only in some countries, e.g. the United States, Ukraine and a few other producers in Africa and Latin America. The wheat/coarse grain harvested area ratio is expected to remain nearly constant but among coarse grains, the anticipated higher return from maize compared to sorghum, barley and other cereals will give rise to a larger maize area.

Figure 5.3. Variety share of coarse grains shifts towards maize Maize

Barley

Oats

Rye

Sorghum

Other

Share in total coarse grain area 100

80

60

40

20

0 2005-2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/382135507083 Source: OECD and FAO Secretariats.

Stocks recover but stay at historically low levels given high prices Following sharp declines in world wheat stocks for two consecutive seasons, some rebuilding of world inventories is expected in 2008, given the anticipated increase in global production. Over the projection period, inventories held by the world’s largest wheat

88

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

5.

CEREALS

exporting countries and mainly in the private sector, which are the main buffer against any major production shortfall, are projected to recover from their current critically low level driven mostly by expected replenishments in Canada and the United States. Wheat inventories in India are also projected to remain steady while some increases are projected for China. However, wheat stocks are unlikely to return to the high levels of the previous decade and the world stocks-to-use ratio is projected to remain close to the current low level of around 25% which signals a continuation of generally tight market conditions. In view of this Outlook and given the prospects for much higher production costs than in the past (mostly driven by the high crude oil prices assumed for the projection period), wheat prices in a historical perspective are likely to remain higher on average to 2017, but below the recent peaks.

Figure 5.4. Stock levels stay low in historical perspective China Million tonnes

EU27

India

United States

Wheat

Japan Coarse grains

Other Million tonnes

300

350

250

300 250

200 200 150 150 100 100 50

50

0

0 1997

2007

2017

1997

2007

2017

1 2 http://dx.doi.org/10.1787/382152475623 Source: OECD and FAO Secretariats.

In spite of a small recovery in world carryover stocks of coarse grains, world inventories remain significantly below the levels observed over the past decade. This is because most of the growth in world production in 2008 is expected to be absorbed by a rapid increase in utilisation leaving little margin for replenishing stocks. As a result, the world stocks-to-use ratio, which in 2007 fell to a low of 19%, will not recover significantly in 2008, pointing to the continuation of a tight supply and demand balance for at least another season. The low ratio is likely to continue throughout the projection period, mainly because of tight supply and demand prospects in the United States, the world’s largest producer, exporter and consumer of coarse grains. In contrast to wheat, this Outlook expects coarse grains prices to remain at current high levels for several more seasons, before they start declining. The price of United States yellow maize (No. 2, yellow corn f.o.b.) is projected to reach USD 161 per tonne by 2017 down from about USD 180 per tonne in 2007. But again, in a historical context, prices are likely to remain above those of the previous decade, even in real terms. While wheat and coarse grain prices in real terms are expected to stay above those prevailing over the previous decade, from this higher level, the long term declining trend is projected to continue (Figure 5.1). The main factors which seem to be influencing the markets and contributing to this price pattern stem mostly from the growing demand for OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

89

5. CEREALS

grains as raw materials for the production of biofuels and for feed use in developing countries. A continuation of high crude oil prices will not only reinforce the demand for alternative energy but will increase the cost of cereal production (through higher prices for fuel, fertiliser, chemicals pesticides, insecticides, etc.), accentuating the rise in prices.

Moderate growth in wheat trade but stronger increase for coarse grains World wheat trade contracted in the 2007 marketing season, mostly reflecting reduced imports from several countries because of their own larger harvests in 2007. Trade is expected to rebound in 2008 and then to expand at a modest rate of below 1% annually, to reach about 126 m tonnes by 2017. The United States will remain the largest wheat exporter despite a modest decrease in sales after 2008. Assuming normal weather conditions and hence a recovery in production, Australia will return to the world market as the world’s second largest wheat exporter after 2008 and is projected to remain a leading exporter during the projection period. Shipments from other major exporters such as Argentina and Canada are expected to remain steady or to increase. In addition, the Russian Federation and Ukraine are projected to expand exports considerably. On the other hand, a slight drop is projected in wheat exports by the EU. A notable result of the projection is that wheat imports in the EU, in addition to declining exports, are remaining relatively high compared to historic levels. Strong demand for feed and biofuels wheat is behind this development. Other importers include Egypt, Nigeria, Japan, and Brazil, although imports in the latter two countries, and particularly in Brazil, will be on the decline. Saudi Arabia is also projected to show growing imports in view of the recent change in its policy to gradually phase out production subsidies. Aggregate imports by countries not belonging to the OECD are projected to reach 100 m tonnes by 2017, accounting for 80% of the world total, a bit higher compared to the current ratio (78%).

Figure 5.5. Wheat trade increases moderately Main exporters

Main importers

United States

Australia

Japan

Indonesia

Canada

Russia

Brazil

EU27

Egypt

Total trade

EU27 Million tonnes 120

80

40

0

-40 1997

2007

2017

1 2 http://dx.doi.org/10.1787/382160047604 Source: OECD and FAO Secretariats.

90

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

5.

CEREALS

After having reached a record volume in 2007, mostly due to large imports of maize and sorghum by the EU, world trade in coarse grains is projected to return to a more normal level in 2008 and then to follow an upward trend at a rate of 1.6% per annum – slightly faster than during the previous decade. Exports from the United States are forecast to decline sharply in 2008 and follow a gradual decline until 2011 and an increase thereafter. By 2017, the United States will still be the largest exporter, but its world share is expected to drop from about 51% over the past decade down to 43% in 2011 and back to 48% in 2017. However, exports from a number of other countries are projected to increase sharply over the projection period, particularly from Australia (barley), Argentina (maize) and Ukraine (maize and barley). Exports from Canada (barley) are likely to remain generally steady around current levels. China, which has been a substantial exporter over the past decade, is projected to export less and become a net importer by 2017. Exports from the EU are also projected to decline below the average of the previous decade, although above the level in 2007 when the region emerged as a major net importer because of shortages in domestic markets. Regarding imports, Japan will remain the world’s leading importer in spite of some declines in its maize purchases. However, purchases by several other countries, especially some of the developing countries, are projected to increase, driven mostly by strong feed demand. Outside the OECD, imports are projected to grow to some 75 m tonnes, representing nearly 60% of the world total. This compares to less than 50% over the past decade. Countries where imports are projected to increase most notably include: Canada, Egypt, Iran and Saudi Arabia.

Figure 5.6. Sharp increase in coarse grain exports Main exporters

Main importers

Australia

Egypt

Saudi Arabia

South Korea

Ukraine

Argentina

Mexico

Total trade

United States

EU27

Japan

Million tonnes 140 120 100 80 60 40 20 0 -20 -40 -60 1997

2007

2017

1 2 http://dx.doi.org/10.1787/382185863365 Source: OECD and FAO Secretariats.

Main market developments: Rice Productivity gains result in continued growth in global rice production Despite more favourable prices and renewed government support in the development of the rice sector, global production is expected to expand at 1% per annum between 2008 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

91

5. CEREALS

and 2017, virtually the same pace as in the previous ten years, resulting in a 45 m tonnes increase to 475 m tonnes of milled rice, compared to the average 2005-07. The modest increase prospect mirrors expectations of an intensification of competition for resources coming from other crops but also from other sectors of the economy, which may thwart private and public initiatives to boost the sector. Growth in production is expected to stem from productivity gains, associated with an intensification of technologies, a greater reliance on water control, and dissemination of high performing varieties, while the area under rice is set to fall in absolute terms from 2011 onwards, largely influenced by cuts in Asia. Despite a lingering tendency to reduce the area under rice, production in the developed countries is set to rebound, as yields reach new highs. Much of the production growth is expected to be sustained by an increase in the United States and a recovery in Australia, which more than compensate a policy-induced cut in Japan. The rebounding of production in Australia assumes a return to normal weather conditions, as the recurrence of drought in recent years and continuing water supply difficulties has raised questions over the long run sustainability of the sector. Much of the expansion in world rice production would be concentrated in the developing countries, most of all in Asia (37 m tonnes) where Bangladesh, Cambodia, India, Indonesia, Myanmar, Thailand and Vietnam are foreseen to record sizeable increases. These compensate for a small decline in China, where the sector is anticipated to adjust to falling domestic consumption. Except for Myanmar, Cambodia and Laos, which still dispose of large swaths of land to expand cultivation, most Asian states are foreseen to cut the area planted to rice and to rely on yield gains to boost production. In Africa, the sector is expected to maintain a relatively strong pace of expansion, sustained by dynamic domestic demand, relying almost equally on area and yield increases. These results would be consistent with a renewed pledge from governments, for instance in Nigeria and Senegal, to achieve rice self-sufficiency in the next few years. Likewise, the Latin American and Caribbean countries, Brazil, Peru, but also Argentina, Colombia, the Dominican Republic, Ecuador, Guyana, Uruguay and Venezuela are set to achieve a fast pace of expansion, as higher world prices stimulate rice cultivation, reversing past trends, and yields. In contrast, the sector could suffer a contraction in Mexico, as rice from the United States enters its market unimpeded under NAFTA.

Changing diets in Asian countries affect per capita and total rice consumption Unlike other cereals, little rice is used as feed and virtually none for transformation into biofuels. Rice remains a basic food commodity and its importance has extended beyond Asia into many African regions and many parts of LAC. However, fast income growth and the diversification of diets are expected to depress per capita rice consumption, especially among Asian countries, which would lower the world average from 57.3 kg in the base period to 56.5 kg per annum in 2017. On the other hand, rice is expected to make further inroads in African diets, where per capita consumption is set to rise from 22 kg to 24 kg over the ten year period, displacing traditional elements, like millet, maize or cassava, in both urban and rural areas. Reflecting the expected fall in per capita rice intake and slowing population growth, total rice consumption, all uses included, is projected to expand by 43 m tonnes compared to the base period over the next ten years, or less than 1% per annum, to reach 475 m tonnes. Because of the demographic distribution and the high per capita levels, rice utilisation is expected to increase by 32 m

92

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

5.

CEREALS

tonnes in Asia, to 404 million tonnes, and by around 8 m tonnes in Africa, to 30 m tonnes. Consumption in LAC is anticipated to rise by less than 3 m tonnes, to 22 m tonnes, while virtually no growth is anticipated for the developed countries as a whole.

Figure 5.7. Per capita rice food consumption expected to decrease, total use increases 2005-2007

2017

kg/capita

Million tonnes

90

500

400 60 300

200 30 100

0

0 World per capita

Africa per capita

Asia per capita

World total

Asia total

Africa total

1 2 http://dx.doi.org/10.1787/382267402863 Source: OECD and FAO Secretariats.

Trade in rice to increase vigorously, sustained by brisk imports by Africa and Asia The international trade in rice has experienced a fast pace of expansion since the mid 1990s, a tendency expected to dominate also in the next ten years. Trade in rice is projected to grow by over 2% per annum from 30 m tonnes in the base period to 38 m tonnes by 2017. At that level, rice exchanged on world markets would represent 6% of world production, a rather low share, typical of a “thin” residual international market that caters principally for domestic needs. Much of the expansion in world imports is anticipated to arise in Africa and in Asia. In Africa, the Ivory Coast, Ghana and Nigeria are expected to remain key players in the rice market, but increases are expected all across the continent, to the point that it may account for 32% of total rice imports in 2017, up from 29% in 2005-07. Asia, Indonesia, Iraq, the Democratic People’s Republic of Korea, Saudi Arabia and Sri Lanka are raising their purchases of rice over the next ten years, despite the fact that many of them are pursuing expansionary production policies. However, the increases will be relatively modest, especially where governments retain their control over rice imports. In the rest of the region, the Islamic Republic of Iran, Malaysia and the Philippines are foreseen to cut imports, along with rising production. Imports to LAC are expected to rise by 3.5%, notably in Brazil and Chile, largely a reflection of rising consumption meeting stagnating production. The progressive opening of markets to rice from the United States under the US-Central America Free Trade Agreement also contributes to rising imports of Central American and Caribbean countries. Imports by developed countries are projected to rise by about 1 m tonnes, boosted by increased purchases by the United States, the EU and South Africa. Free access granted to some least developed or ACP countries by the EU under the Everything-but-Arms initiative OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

93

5. CEREALS

and, more recently, under new economic partnership agreements, is not expected to boost much the size of imports to the EU. Indeed, changes in trade and production policies in the past few years have tended to reduce the price premium that rice used to fetch on EU markets. Stringent rules of origin, quality standards and special safeguards will further limit the scope for stronger increases in EU rice imports.

Thailand to consolidate its status as the leading rice exporting country Among exporters, Thailand is projected to sell over 12 m tonnes, or about one third of total trade, consolidating its current position as the main provider of rice to world markets. Vietnam, China, the United States, Australia, Argentina and Uruguay are also projected to increase their sales compared with 2005-07, while those from Egypt and Pakistan are set to decline, reflecting supply constraints and rising domestic needs. Exports by India are not expected to depart much from the base year level, as domestic production and consumption are projected to remain much in line. In general, the experience of 2008 has confirmed that external markets are, for many of the traditional rice suppliers, secondary to their own domestic market and that in case of tight supply, governments tend to respond by imposing restrictions on overseas sales.

Despite some rebuilding, global rice stocks to remain well below the levels in the 1990s Since 1999, global rice stocks have been falling to the point that by 2007, they only represented 18% of domestic consumption, compared with 39% in 1999. Stocks held by the major exporting countries, including China and India, were also down, raising the potential for market price instability. Indeed, early in 2008, world prices soared amidst much reduced world rice reserves. A tendency to rebuild stocks is expected at the world level between 2008 and 2010, as concerns over supply availability and price volatility mount. By 2017, global rice stocks are projected to reach some 81 m tonnes, up 2.5 m tonnes from the level in 2007. Increases are concentrated in Brazil, India and Thailand. While remaining the largest holder of rice, China is expected to further cut its reserves, in line with consumption.

Figure 5.8. World rice stocks to be partly rebuilt prices to fall after peak China

India

Thailand

Vietnam

Other

Real price

Million tonnes

USD/t 400

150

350 300 250

100

200 150 50

100 50

0 16

15

14

13

12

11

17 20

20

20

20

20

20

10

20

09

20

07

06

05

04

03

08

20

20

20

20

20

20

01

02

20

20

20

9

8

00 20

19 9

19 9

19 9

7

0

1 2 http://dx.doi.org/10.1787/382312026535 Source: OECD and FAO Secretariats.

94

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

5.

CEREALS

International rice prices to strengthen in 2008 but to fall thereafter International rice prices are anticipated to remain firm in 2008 and 2009, as countries rebuild their stocks. Weaker prices are projected as of 2010, although they are unlikely to fall below their 2006 level, mainly in reflection of expected higher costs. Given the lower size of buffer stocks, prices are likely to manifest much higher volatility than in the 1990s and early 2000s, as the market reacts sharply to supply or demand shocks.

Key issues and uncertainties A growing link between energy and cereal markets Ongoing developments in the still relatively new market for biofuels, coupled with high crude oil prices, are a major driving force in cereal market outcomes, particularly for maize in the US over the Outlook period. The growing demand for cereals as an input in ethanol production is one argument in favour of stronger prices for cereals than in the past decade. Since the profitability of biofuel production is strongly linked to energy prices, the demand for cereals will also become more dependent on energy prices than in the past. With higher energy prices cereal demand for biofuel production will increase. At the same time, high energy prices raise input cost for cereal production through higher costs for fertilisers, machinery fuels or other inputs, and this will lower gross margins in cereal production at the farm level. However, energy prices are not easy to predict and therefore constitute an important uncertainty for future cereal markets. Similarly, high current levels of support or mandates for biofuel production allow production to grow even in countries where this would otherwise not have been economically viable (e.g. the United States and the European Union). A change in these support policies could therefore change the picture of the Outlook considerably.

The importance of policies Currently the EU is undertaking a so called “health check” of the Common Agricultural Policy, which is meant to fine-tune the 2003 CAP reform and to contribute to the discussion on future priorities in the field of agricultural policies. Without prejudging the outcome of this review, any change in policies and policy mechanisms are likely to influence EU and global agricultural markets. In addition, a new US Farm Bill is being negotiated in the US, a version having been approved by the US Congress and the Energy Security and Independence Act (ESIA) was passed in late 2007, which increases existing mandates for biofuels. None of these policy developments has been taken into account in the cereal market projections. Multilateral negotiations about a new trade agreement within the Doha round are still some way from finding any consensus. Nevertheless, a successful conclusion of the negotiations could result in significant changes in policies affecting agricultural market access, export competition and domestic support. In the case of an agreement, there might also be noticeable indirect effects on cereal markets from changes in the policy environment for livestock and other crop markets.

Will there be increased supply variability? The supply shortfalls of wheat in the recent two seasons were, in addition to increased demand, a major reason for higher observed prices. For example, Australia is a global player on world cereal markets, in particular for wheat. In the past decade Australia was

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

95

5. CEREALS

responsible for about 15% of total wheat exports. In 2006 and 2007, Australia suffered from two severe consecutive droughts and as a result, the export share went down to 6% and 8%, respectively. This had strong impacts on international wheat prices. While such severe droughts were said to appear every 50 years, it is feared that the frequency of droughts will increase in future as Australia may increasingly suffer from climate change. This Outlook assumes that yield levels in Australia will return to levels in the past decade, but that their yield growth slows down. Given that water scarcity is also likely to become an issue in Australia, lower yields than expected in this Outlook cannot be excluded. But not only Australia has been facing higher yield fluctuations in recent years. Also the EU and the United States have experienced historically large variations in wheat production since 2000. This along with increasing production taking place in other more climate variable regions such as the CIS, contributes to potentially increasing volatility of global supply and hence prices and thus raising the uncertainties in cereal markets.

Climate change affects rice markets in particular Climate change is of particular relevance to the rice sector because rice has been identified both as a major source of greenhouse gases and as a crop particularly vulnerable to changes in climatic conditions. Rice cultivation is responsible for high emissions of carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O). The release of methane, a greenhouse gas 20 times more potential than CO2, is of particular relevance to flooded rice fields, where it results from the decomposition of organic matter in absence of oxygen. Changes in climatic conditions could also have severe impacts on rice production. On the one hand, increased levels of CO2 may have positive effects on rice yields (CO2 fertilisation), but these benefits disappear when associated with increases in temperature. Other manifestations of climate change, in particular rising sea levels and increased frequency of extreme weather events, would also have severe impacts on rice production, especially in the lowlands and delta areas, which are the hubs of rice cultivation. Finally, climate change will affect other agricultural commodities as well, amongst other factors attributable to shifts in production zones.

96

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ISBN 978-92-64-04590-3 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 © OECD/FAO 2008

Chapter 6

Oilseeds and Oilseed Products*

* All data are expressed on a marketing year basis (as defined in the glossary) unless stated otherwise. It is important to note that this discussion focuses on the following aggregates: oilseeds are rapeseed, soyabean and sunflower; oilseed meals are rapeseed meal, soyabean meal and sunflower meal; and vegetable oils are rapeseed oil, soyabean oil, sunflower oil and palm oil.

97

6.

OILSEEDS AND OILSEED PRODUCTS

World market trends and prospects Key market drivers In 2007, the rise in oilseed, oil and meal prices that started in 2005 and intensified in 2006 continued with unabated vigour. During 2006, prices in the oilseed complex started to come under the influence of external factors: prices rose even though supplies were ample relative to demand and in spite of high levels of global stocks, both in absolute terms and compared to total consumption. The rise in prices was driven by the tightness in the related world feedgrain market: the unprecedented rise in maize prices provided incentives to shift land out of oilseeds, driving up oilseed and oilmeal prices. The price development was reinforced by the fact that both oilseeds and vegetable oils were also in demand for biodiesel production, particularly in the EU and some south-east Asian countries. Finally, the surge in ocean freight rates has also played a role. In 2007, prices moved at record levels as spillover effects from the related grain markets continued. Direct competition for land by maize and soybeans – both in demand by the feed as well as energy sector – resulted in shifts in land allocation to crops that led to an unprecedented fall in global meal availability. As to vegetable oil, utilisation as biofuel feedstock expanded steadily as well as demand for food uses, while global vegetable oil supplies tightened. Growing tightness of supplies called for steep reductions in inventories. Consequently, stock-to-use ratios fell to critical levels for both oils and meals, exacerbating the upward swing in prices.

Figure 6.1. Vegetable oil prices and oilseed prices to remain strong over the projection period Oilseeds

USD/t

Oilseed meal

USD/t

600

Vegetable oil

USD/t 1 200

400 350

500

1 000

300 400

800

250

300

600

200 150

200

400

100 100

200

50

0

0 09 20 11 20 13 20 15 20 17 20 01 20 03 20 05 20 07 20 09 20 11 20 13 20 15 20 17

07

20

05

20

20

03

01 20

20

17

20

13

15

20

11

20

20

07

09

20

05

20

20

01 20

20

03

0

1 2 http://dx.doi.org/10.1787/382348376453 Source: OECD and FAO Secretariats.

98

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

6. OILSEEDS AND OILSEED PRODUCTS

Assumptions of average weather, unchanged policies and a stable macroeconomic environment are behind a rather smooth evolution of oilseeds and oilseed product markets over the Outlook period. Oilseeds, vegetable oil and to a lesser extent oilseed meal markets will continue to expand, mainly because of strong demand for food and feed as income and population grow. In addition, growing vegetable oil use for biodiesel production is expected to drive expanding markets. In the course of the next decade, stock to use ratios for oilseeds and oilseed products are expected to remain low. The combination of these elements is supporting the projections for firm prices expressed in nominal terms (Figure 6.1). Increasing oilseed meal and dried distiller grains availability and some decline in other feedgrain prices later during the Outlook period mean decreasing meal prices over time. Over the projection period, prices of oilseeds, oilseed meal and vegetable oil, once corrected for inflation, are expected to decrease in real terms but to stay considerably above long term levels.

Main market developments Sustained demand for vegetable oils In 2007, supply stagnation and high prices led to reduced growth in global oils and fats consumption. Edible uses in countries in Asia and the EU have been most affected, whereas utilisation of vegetable oils for biofuel production grew further, driven by policy targets in some countries. Global vegetable oil demand is expected to rise by more than 40% in 2017, compared to the average level of 2005-07. Growth in global population and rising incomes continue to play an important role in vegetable oil markets. In developing countries, a 3.1% annual demand growth is expected for 80% driven by food use (Figure 6.2). Per-capita oil consumption is projected to grow by more than 1.9% and 0.8% annually in China and India, respectively. Combined with population growth this leads to a 8.7 million (m) tonne increase in vegetable oil use over the Outlook period, one fifth of the global increase. The divergence in average per capita consumption levels between developed countries and developing countries (in particular least developed nations) remains significant during the projection period.

Figure 6.2. Demand for vegetable oil is growing Vegetable oil use for non-biofuel use

Vegetable oil use for biofuel use

Million tonnes 100 90 80 70 60 50 40 30 20 10 0 Average 2005-07

2017

Average 2005-07

OECD

2017

Non OECD economies

1 2 http://dx.doi.org/10.1787/382351238202 Source: OECD and FAO Secretariats.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

99

6.

OILSEEDS AND OILSEED PRODUCTS

Stimulated by bioenergy mandates, vegetable oil use for biodiesel production should increase by 14 million tonnes over the Outlook period when compared to the level of 2005-07. The EU is expected to remain the dominant player with its use of vegetable oil for biodiesel production reaching almost 12.5 m tonnes, i.e. 9% of worldwide and 42% of domestic vegetable oil consumption, in 2017. Biodiesel industries are expected to develop in several countries worldwide. However, the EU is projected to account for more than half of global vegetable oil demand for biodiesel production over the projection period. Within the OECD, vegetable oil consumption used for biodiesel production is expected to develop in Canada and Australia. After a strong increase between 2005 and 2007, vegetable oil use for biodiesel production in the US is projected to slightly decrease over the projection period because of lower margins in the biodiesel industry towards the end of the Outlook period. Outside the OECD, the emerging biodiesel production will increase the consumption of domestically produced palm oil in Indonesia and Malaysia and soyabean oil in Brazil. This new use of vegetable oil should reach almost 6 m tonnes by 2017.

Expansion in oilseed meal use to slow down in both developed and developing countries In 2007, global meal consumption continued to expand, notwithstanding the on-going rise in prices. Constant demand growth was driven by continuously rising consumption of livestock products in Asia as well as by the exceptional worldwide shortage of feedgrains that induced feed industries to use more oilmeals. During the Outlook period, annual growth in meal consumption is projected at 3.4% and 0.9% in the developing and developed countries respectively. Global demand for protein meals is projected to be weaker than vegetable oil demand. Because meal and oil are produced in fixed proportions, this leads to a situation where the meal market is expected to be oversupplied in the short term. The OECD share in global oilseed meal consumption is projected to fall below 50%. Due to a slow-down of meat production growth in the European Union, China should become the dominant protein meal consumer in 2015. Indeed, the intensification of the Chinese livestock sector is responsible for 35% of the global increase in meal consumption. In 2017, dried distillers grains, a by-product of the rising ethanol production, are expected to replace almost 7% of oilseed meal consumption in the US compared to 2% on average over the period 2005-07. India’s domestic demand for protein meals is continuously increasing over the projection period to more than 8 m tonnes in 2017 on account of the expanding dairy, livestock and poultry sectors. When domestic meal consumption is expressed in meal use per tonne of nonruminant meat production, the average projected consumption levels in developing and least developed countries remain significantly below those in developed countries. Because of this low feed intensity, developing countries continue to use only slightly more than 50% of the global protein meal consumption, despite their population share of over 80%. Feed intensity is projected to gradually increase in developing countries. Coupled with growing meat production, this is expected to slowly increase the share of protein meal consumed in these countries. Despite gradual improvements, least developed countries account for only about 1% of global non-ruminant meat production. This level of output requires just 0.5% of total protein meal used in the world.

100

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

6. OILSEEDS AND OILSEED PRODUCTS

The potential for oilseed and vegetable oil production increase is limited While oilseed production continued to expand in 2006, an unprecedented decline in output occurred in 2007. This was largely on account of soybeans, the production of which dropped 6% (after expanding steadily in the preceding years), following the diversion of land from soybeans to maize in the US. Oilseeds lost out to grains also in China and CIS. Furthermore, the reductions in area were accompanied by yield declines due to unfavourable weather in several key growing regions. Prompt and substantial area and production increases in South America could only partly offset these falls. By the end of 2006, stocks had accumulated to record levels of about 12% of global consumption. Some 14 m tonnes of oilseeds were released from stocks in 2007 to compensate the production decline in a context of increasing crush demand. World oilseeds acreage and production are expected to recover in 2008 from their low 2007 levels because of relatively stronger oilseeds prices. The projections show global oilseeds production rising by more than 25% in 2017 relative to the 2005-07 average, with Brazil alone providing 30% of the increase (Figure 6.3). The expansion of oilseeds production is limited to few regions, mainly South America and the EU. Brazil and Argentina are expected to confirm their leading role in global oilseeds supply with a combined share of global oilseed production of almost 38% in 2017. Brazil is expected to expand its production at a rate of almost 3.5% per annum. Area expansion – driven by high oilseeds and vegetable oil prices – should be the main contributor to production growth. Argentinean oilseeds area expansion should be relatively modest at 0.6% per annum. This, combined with slightly increasing yields, should imply an annual production growth of about 1.6%. Despite a relatively stable OECD oilseed area at 50 m hectares throughout the projection period, some changes are expected in the geographical distribution of production mainly under the influence of biofuel development. Due to high oilseed prices (relative to competing arable crops), oilseeds acreage in the US should first recover from the low level recorded in 2007 but then decrease by 0.5% annually between 2009 and 2017. Oilseeds production in the European Union should increase by almost 3% per annum over the projection period. This expansion in oilseeds production is to a certain extent driven by the development of biodiesel, derived mainly from rapeseed oil. The rapeseed area is expected to increase in the former EU15. The new EU member countries are expected to contribute about 35% to the overall increase in EU oilseeds production because of yield improvements. In China, production increases should continue to be driven by yield improvements rather than area expansion. Gains in yields are expected to lead to a growth in domestic production by an average rate of 1.6% per annum. China is expected to favour domestic production of coarse grains and imports of oilseeds to capture the value added from processing oilseeds into protein meals and vegetable oils domestically. The Chinese crushing capacity is expected to continue to grow at a rate of 3.5% per annum. India’s oilseeds area is projected to continue to expand. Production is projected to grow to 20 m tonnes in 2017, based on moderate area expansion and yield improvements from the application of modern production technologies. India’s oilseeds import tariffs continue to be prohibitive, barring any significant imports. The country’s import requirements are satisfied by vegetable oil purchases.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

101

6.

OILSEEDS AND OILSEED PRODUCTS

Figure 6.3. Growing world oilseed production United States

Brazil

Argentina

EU27

China

India

Rest of the world

Million tonnes 425 400 375 350 325 300 275 250 225 200 175 150 125 100 75 50 25 0 Average 2005-2007

2008

2011

2014

2017

1 2 http://dx.doi.org/10.1787/382353382872 Source: OECD and FAO Secretariats.

As in the past, palm oil production will be clearly dominated by two countries, Malaysia and Indonesia. The share of palm oil produced in these two countries currently accounts for about one third of global vegetable oil output and is expected to grow further. In recent years, palm oil has surpassed soyabean oil as the leading vegetable oil in terms of quantities produced and consumed. Over the course of the baseline, the combined production of Malaysia and Indonesia is expected to expand by 18 m tonnes. Growth rates are expected to be lower in the future compared to recent years mainly because environmental constraints will restrict area expansion.

Brazil to become the leading oilseeds exporter In 2007, trade growth in oilseeds and oilseed products was mostly driven by crop shortfalls in some major importing countries and by steadily rising demand in developing countries in Asia, in particular China, whose share in global imports of oilseeds and derived products reached about 25%. Due to the drop in US crop output, the importance of South America as a supplier of soybeans and derived products to the world market increased markedly in 2007. World oilseeds exports are expected to grow by almost 21 m tonnes over the Outlook period, compared to the period 2005-07. Brazil’s share of global exports is expected to grow from 31% on average during the period 2005-07 to more than 40% in 2017. In 2009, Brazil should become the leading oilseeds exporter surpassing the United States, even though export growth is tempered by strong domestic demand for vegetable oil because of the development of the biodiesel sector. In Argentina, the differential export tax system for oilseeds and oilseed products should continue to encourage domestic crush of seeds and exports of oilseed products. Domestic crushing is expected to increase by almost 25% over the projection period. This will not be enough to process all the domestic production and, as a result, oilseeds exports are anticipated to continue to represent 20% of production in 2017. US domestic demand for crushing is expected to grow at a rate of 1.3% per annum over the Outlook period. This, combined with an only slightly increasing oilseeds production over the projection period, is anticipated to lead to a contraction of the United States’ share of global exports from 37%

102

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

6. OILSEEDS AND OILSEED PRODUCTS

on average over the period 2005-07 to around 22% in 2017. Canada should remain a strong oilseeds exporter. Chinese oilseeds imports are expected to increase by almost 18 m tonnes accounting for 84% of the global increase in imports over the projection period, when compared to the 2005-07 period. This Outlook assumes that China will continue to expand its domestic oilseeds production and will keep expanding its crushing facilities to meet an increasing demand for oilseed meal and vegetable oil. In 2017, over 58% of Chinese oilseeds consumption should be met by imports. The European Union should remain an important – but decreasing – importer of oilseeds, reflecting the impressive development of domestic rapeseed production. The European Union is assumed to increase domestic crush of oilseeds to meet the rising demand for oilseeds generated by a growing bio-diesel industry as well as by sustained demand for vegetable oils for food and for oilseed meal in animal rations.

Vegetable oil trade is influenced by the development of biodiesel In terms of vegetable oil trade, palm oil and soybean oil continue to be the growth leaders. Trade in oilseed based biofuels or oils destined for the biofuel industry became more important in 2007 and this is expected to grow further. Argentina should continue to be the main exporter of oilseed oil with exports increasing at a rate of almost 2% per annum. The differential tax system in Argentina continues to favour the exports of soyabean oil in comparison to soybean seeds. However, the fiscal system is even more favourable for exporting biodiesel and significant investments in biodiesel producing capacities in Argentina could change the market picture for export supplies. The use of vegetable oil for biodiesel production is also expected to develop in Malaysia, Indonesia and Brazil. The Indonesian Government is determined to counteract rising world market prices to control domestic cooking oil prices through variable export taxes. Despite the increasing export tax, shipments expanded in 2007 and are projected to reach 20 m tonnes in 2017 (Figure 6.4). Exports as a share of domestic production are expected to fall slightly because of the emerging biodiesel production. Palm oil in Malaysia has traditionally been used as raw material input in its oleo-chemical industry. Combined with the developing biodiesel sector, about 19% of Malaysia’s palm oil production will be used by the domestic processing industry by 2017, up from 16% on average over the period 2005-07. In Brazil, oilseed oil shipments are expected to decrease as the use of domestically produced oil for biofuel production rises. The expansion of EU oilseeds production and crush capacity is expected to lead to an increase in vegetable oil production of 20% over the Outlook period when compared to the average level of 2005-07. However to meet both industrial demand as well as traditional vegetable oil demand for food purposes, the EU is expected to more than double its imports over the course of the projection period. China is expected to continue to develop its domestic crushing industry. As a result Chinese vegetable oil imports should only increase by 0.7% per annum and the EU is expected to bypass China as the dominant vegetable oil importer in 2008. More than half of India’s additional vegetable oil needs should be supplied by domestic sources. Imports are projected to reach more than 6 m tonnes in 2017, solidifying India’s position as the third largest vegetable oil importer in the world. Inflationary pressure from high food prices led the Government to initiate several differential duty reductions as a price control measure. The duty differential between palm and soyabean oils was

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

103

6.

OILSEEDS AND OILSEED PRODUCTS

narrowed by these reductions. India is expected to continue its variable tariff policy to control domestic oil prices and imports. In Pakistan, the oil produced from domestically produced and imported oilseeds will still only cover a small percentage of the domestic vegetable oil demand and vegetable oil imports are increasing as a consequence.

Figure 6.4. Evolution of vegetable oil trade Other imports

India

EU27

China

Argentina

Indonesia

Malaysia

Other exports

Million tonnes 80 60 40 20 0 -20 -40 -60 -80 2002

2005

2008

2011

2014

2017

1 2 http://dx.doi.org/10.1787/382368206231 Source: OECD and FAO Secretariats.

Argentina and Brazil are the leading oilseed meal exporters With regard to oilseed meals, almost the entire rise in global trade was on account of soybeans in 2007. EU imports increased as a result of surge in feedgrain prices. In 2007, the EU was the world’s main buyer of oilseed meals and it is forecast to keep this position over the projection period. However, by 2017 the development of domestic rapeseed meal production should slightly reduce the dependency of the EU on imported protein meals. In China, meal demand will be satisfied by domestically produced oilseed meal (a considerable amount of which is derived from imported oilseeds) as well as through a sizeable expansion in meal imports. Argentina and Brazil are the leading exporting countries, they should account for almost 70% of global exports throughout the projection period. Argentina is expected to remain by far the largest oilseed meal exporter. Indeed, a combination of factors such as investment in processing facilities, a differential export tax system and the small size of the domestic market are expected to lead to an increase in exports by almost 20% over the projection period. In 2007, India strengthened her role as a provider of oilseed meals within Asia, reflecting ample domestic crops and the recent rise in ocean freight rates that favoured nearby supply sources. India’s domestic production is projected to expand over the projection period, but at a slower rate than consumption, resulting in a small reduction in exports by about 4% in the coming decade. Target markets for exports remain those Asian countries with growing livestock sectors such as the Philippines, Malaysia, Saudi Arabia and Egypt where Indian oilseed meals enjoy the competitive advantage of high protein content and biotech free status plus low freight costs.

104

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

6. OILSEEDS AND OILSEED PRODUCTS

Key issues and uncertainties Development of biofuel market contingent on future policy measures The Outlook starts in a period of soaring raw commodity prices. The strong increase in prices that commenced in the course of 2006 has been caused by the concomitant appearance of unusual weather conditions, strong demand growth and specific policy changes. In particular, global biofuel demand and production have grown significantly, stimulated by government support policies. This growth contributes increasingly to the surge in world prices of coarse grains and vegetable oils and, as a result, also of oilseeds and meals. Assumptions on biofuel developments in the Outlook are based on the continuation of the current policy set. During 2007, biofuel use targets and other measures to promote consumption have been established in numerous countries. In exporting countries in South America and South East Asia, where the private sector has invested in the production of biodiesel for exportation, the sector’s viability is largely conditioned by the development of feedstock prices and how these compare to crude oil prices. Other countries, including China and India, are moving more cautiously as they have put food security as their first objective and thus restrict the use of edible crops for fuel production. In a near future, the implementation of binding bioenergy directives in key supplying or consuming countries can be expected to increasingly affect the global market picture for oilseeds and other agricultural commodities. National bioenergy policies may be subject to changes over the coming years as governments take stock of the significant effects such measures have on domestic and international markets and on their economies and consumers. For instance, countries could face limitations regarding biofuel production from domestically grown food crops and international trade in biofuels or their feedstock is likely to grow. In addition, internationally recognised biofuel specifications and trade rules still need to be developed and policy makers will have to respond to consumer requests for environmentally and socially sustainable production of any feedstock used. Finally, if second generation biofuels and alternative forms of renewable energy would become more important over the Outlook period, the role of oilseeds and other basic food crops as biofuel feedstock would be reduced. Overall, the future course of technological innovations, the development of national bioenergy policies, the behaviour of private investors, together with the future evolution of crude oil prices, represent significant sources of uncertainty in projections for the global oilseed market.

Policy response to high food prices can affect the market Sustained high international commodity prices can lead to lower levels of food consumption and cause price inflation. This is especially the case in developing economies where a high portion of household income is still spent on food. In particular food importing developing countries are concerned about the social consequences of rising prices for basic food staples. To mitigate the adverse effects of high prices, governments in several countries decided in the course of 2007 to introduce corrective policy measures. In numerous cases, governments lowered tariffs and introduced other measures to stimulate imports of oilseeds and vegetable oils. Direct support to consumers, release of government stocks and other consumption policies were also introduced, sometimes coupled with increased efforts to stimulate domestic oilseed production. Conversely, some exporting countries decided to introduce or raise export tariffs on domestically produced oilseeds and derived products or to otherwise restrict exportation. Indonesia has raised palm oil

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

105

6.

OILSEEDS AND OILSEED PRODUCTS

export tariffs and Argentina has further increased export taxes on oilseeds and oilseed products in an attempt to help contain or limit feed price rises to stimulate livestock production and to provide support to producers of key livestock foodstuffs so as to fight inflation on basic consumer foods. The immediate effect of most of these measures on domestic markets seems to have been limited, while prices have further strengthened in international markets. The longer term nature of these government interventions and the related market impacts remains an uncertainty in the Outlook.

With only few players dominating global supply, market instability can be expected to increase The potential for further increases in the production of oilseeds and of palm oil is clearly concentrated in a few regions. The global market will depend heavily on South America (Brazil and Argentina) and Southeast Asia (Malaysia and Indonesia) for supplies. But the potential for further expansion of production in these areas could be increasingly constrained by resource and environmental limitations. In the case of Malaysia, future growth in palm oil output needs to be achieved almost entirely through yield improvements because of limited land availability. However, past productivity improvements have been modest and the reversal of this trend will largely depend on the development and adoption of genetically improved planting material and new varieties. Key environmental concerns facing oilseed production in the all these regions include the risk of soil degradation, water scarcity, loss of biodiversity and deforestation. With consumers becoming more concerned about these issues, oilseed and palm oil production and trade is likely to be confronted with new requirements in the future. First, voluntary attempts to certify sustainable practices of palm oil production are being made and similar initiatives are likely to follow with soyabean production. When and how such voluntary or mandatory schemes will impact production methods remains to be seen. Furthermore, given the size of production and exports in the countries in question, any weather anomalies, important shocks to their economies, or radical policy decisions could have huge consequences on markets and world prices for oilseeds and oilseed products. Also on the demand side, the trend towards concentration of consumption growth in relatively few countries, especially China and India, might lead to increased market instability, as any unexpected development in these countries would greatly affect the global market for oilseeds and oilseed products.

Genetic modification of crops can change the production context and consumption patterns Another uncertainty comes from future developments of genetically modified (GM) crops. Past experience has shown that GM crops have the potential to modify productivity and production costs, thereby affecting competition between crops and, consequently, the overall composition of markets and pattern of trade. In years to come, more widespread use of genetic modification appears likely to modify crop traits according to particular product uses and consumer needs. However, in many countries the adoption of GM crops depends on policy decisions that are still evolving in response to the differing concerns of producers, processors, consumers and the wider society. Future decisions about introducing GM crops, as well as further research advances in this area, will remain of strategic importance for the sector in many developed and developing countries.

106

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ISBN 978-92-64-04590-3 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 © OECD/FAO 2008

Chapter 7

Sugar

107

7.

SUGAR

World market trends and prospects Key market drivers World sugar market fundamentals are bearish at the start of the long-term outlook. A near record sugar surplus has overhung the world sugar economy in 2006-07, and a similar situation is expected for 2007-08, as record sugar production continues to outstrip the more steady growth in global consumption. The surplus resulted in sharply lower world sugar prices in 2006-07 with a build-up of global ending stocks, an increasing stocks-to-use ratio that approached 53% and a trade surplus. In spite of the sugar glut, world sugar prices initially rallied in late 2007, but have subsequently weakened, reflecting a change in market sentiment and sugar price dynamics. Global sugar prices have been supported by speculative interest of hedge funds and commodity index funds that have invested massively in sugar futures markets (e.g. financial funds held a record number of over 265 000 net long positions in futures contracts February 2008, equivalent to about 13.3 mt of sugar, and up from 140 000 contracts three years earlier). This is partly because sugar has had the additional appeal of appearing cheap and undervalued relative to other commodities. A weaker US dollar has also lent some support to sugar prices by lowering the price of dollar denominated sugar imports in many countries and raising the cost of supply of efficient sugar producers such as Brazil and Australia. A continuation of the sugar production cycle of booms followed by busts is expected in some countries of Asia such as India. Less rapid growth of cane production and milling capacity is projected for Brazil with rising sugar production costs in the near term and a more profitable alternative use and with further market and trade adjustments expected in the EU and North America. Along with steady growth in global sugar consumption and expanding demand for alternative products of sugar crops, such as for bio-ethanol, particularly in Brazil, these changes are expected to lift world sugar prices, in nominal terms, over the medium term. As the world market is brought into closer balance and excess sugar stocks drawn down, world indicator prices for raw and white sugar are projected to rise by 9% and 11%, respectively, in 2017-18 when compared to the average level of 2005-07, to reach USD 302/t for raw sugar and USD 379/t for white sugar. This will still represent a continuation of the decline in real terms over the projection period, however. The margin between raw and white sugar prices should narrow over the near term, given expectations of higher demand for raw sugar for further refining by an increasing number of large destination and toll refineries* in the Middle East and Asia, and then expand over following years as additional supplies of raw sugar come on stream. With reforms having reined back the EU as a major white sugar exporter, the white sugar premium in future years should reflect more the cost of further sugar refining.

* These refineries are being established in former import markets for white sugar to process raw sugar for domestic use and in some cases for export.

108

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

7.

SUGAR

Main market developments Growth in sugar cane crops boost global sugar production World sugarcane production accounts for around 79% of global sugar production and its share is set to increase with rising yields and areas under production. The perennial nature of sugarcane tends to contribute to steady increases of cane and sugar output over time as producers increase plantings in response to higher prices, and with multiple harvests taken from a single planting (ratoon). The global harvested area of sugarcane is expected to increase by a further 20%, whereas the world sugar beet area declines by less than 1% by 2017-18, compared to the average for 2005-07. This is due mainly to lower beet area in the EU, following sugar policy reform, which more than offsets growth in other countries such as in the Russian Federation and Ukraine. World sugar production is projected at 189 million tonnes (mt) for 2017-18, some 27 mt or 17% above the average level for 2005-07. A key determinant of world sugar production trends is Brazilian cane production and its allocation between sugar and ethanol production over the medium term. With production in the OECD area relatively stable, other countries outside the OECD account for virtually all the increase in global sugar production to 2017-18. In fact, the nonOECD countries’ share of global production rises from 77% in 2005-07 to 80% in 2017-18. Brazil is the largest sugar producer with expected output of 41 mt in 2017-18, and its share of world production rises from 20% to 22% over the ten-year period.

Figure 7.1. World sugar prices to recover in near term USD/t 450 400

White sugarb

350

White premium

300 250

Raw sugara

200 150 100 1991 1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

1 2 http://dx.doi.org/10.1787/382424854452 a) Raw sugar world price, ICE sugar contract No. 11, New York f.o.b., bulk spot price, October/September. b) Refined sugar price, London No. 5, f.o.b. Europe, spot price, October/September. Source: OECD and FAO Secretariats.

Some of this growth is being driven by rapidly increasing demand for fuel ethanol, for which sugar crops are expected to be a major feedstock. The two largest ethanol producers are the United States and Brazil. The anticipated expansion in biofuel production in the United States stimulated by the new mandate is not yet taken into account in this Outlook. It is nevertheless clear that it will involve increased use of sugar beets as a feedstock, although maize will be by far the dominant source. In the case of Brazil, however, this growing alternative use for sugarcane has emerged as an extremely important determinant of growth in global sugar output and trade. According to the projections, the share of the sugarcane crop going to ethanol in Brazil is expected to increase from close to

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

109

7.

SUGAR

Figure 7.2. World sugar prices to trend down in realc terms USD/t

USD/t

400

550

350

500 450

300

400 250

Raw sugara 350

200 White sugarb 150

300 250

100

200 150

50 1987 1992

1997

2002

2007

2012 2017

1987 1992

1997

2002

2007

2012 2017

1 2 http://dx.doi.org/10.1787/382446371536 a) Raw sugar world price, ICE sugar contract No. 11, New York f.o.b., bulk spot price, October/September. b) Refined sugar price, London No. 5, f.o.b. Europe, spot price, October/September. c) Prices deflated by US GDP deflator (2000 = 1). Source: OECD and FAO Secretariats.

Figure 7.3. Larger sugarcane production to account for most of the additional sugar output Sugar beet

Sugarcane

Million tonnes r.s.e. 2 000

1 500

1 000

500

0 1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

1 2 http://dx.doi.org/10.1787/382508471375 Source: OECD and FAO Secretariats.

51% in 2005-07 to over 64% in 2017-18. Despite the growth in ethanol offtake from sugarcane, this is not expected to halt further expansion in sugar output in Brazil, as sugarcane production is projected to rise by over 35% between 2005-07 and 2017-18. Outside the United States and Brazil, a number of sugar producing countries are currently embarking on, or reinvigorating existing renewable energy programmes, such as the EU, Japan, Malaysia, Indonesia, India, South Africa, Colombia, and the Philippines, particularly for use in the transport fuel sector. Most of these fledgling fuel ethanol programmes, however, are expected to use molasses or starch sources such as grains and cassava, in preference to raw sugarcane juice as the preferred feedstock. As molasses is produced as a by-product of the sugar refining process, molasses-based bio-ethanol production should not greatly impair sugar production in these countries and may even

110

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

7.

SUGAR

stimulate further growth in cane and sugar output. Furthermore, in some regions, such as the EU, specific sugar crops (industrial beets) are being separately designated and developed for non-food uses such as bio-ethanol production.

Steady consumption growth eventually eats away the global surplus The relentless, year on year growth in sugar consumption remains the basic driver of the world sugar economy. Global sugar use has increased on averaged by over 2.3% per year in the 1998-2007 period in response to rapid increases in incomes and faster population growth in mainly the developing group of countries. Sugar consumption in the mature markets of OECD countries has shown less dramatic growth at less than 1% per annum in the same period. World sugar consumption is expected to continue to expand at a solid 1.5% per annum to 2017-18 with faster growth in the developing countries which averages over 1.9% per annum; albeit with considerable variation in per capita use between the different countries. The fastest growth in consumption is projected for the sugar deficit regions of Asia and the Pacific, where sugar consumption growth is significantly higher, at 2.1% per annum, than the world average. This is largely due to the emergence of higher growth in China, the most populous country but with comparatively low per capita sugar consumption by Asian and world standards. Overall, the developing world accounts for the lion’s share of global consumption, with its proportion of global use increasing from 70% in 2005-07 to about 74% in 2017-18. These countries, thus, account for virtually all the increase in world sugar consumption (and production) over the projection period.

Figure 7.4. Changing regional patterns of sugar consumption to 2017 OECD

CIS

Africa

Latin America and Caribbean

Asia and Pacific

Million tonnes, r.s.e 200

150

100

50

0 1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

1 2 http://dx.doi.org/10.1787/382526738418 Source: OECD and FAO Secretariats.

World sugar stocks increased in 2006-07 with the recovery of global production and a similar situation of rising stocks is expected in 2007-08. The global sugar stocks-to-use ratio which averaged 49% in 2005-07, is expected to increase to nearly 53% in the near term. Notwithstanding some growth in total stock levels over the first half of the projection period, steady growth in sugar consumption ultimately results in the stocks-to-use ratio declining to around 44% in 2017-18.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

111

7.

SUGAR

Figure 7.5. The global stock-to-use ratio to decline in the near term Production

Consumption

Stock to use (right-hand scale)

Million tonnes r.s.e.

Per cent 55

200

50 175 45 150 40 125

35

30

100 2003

2005

2007

2009

2011

2013

2015

2017

1 2 http://dx.doi.org/10.1787/382610602514 Source: OECD and FAO Secretariats.

OECD countries’ global market shares to contract further The OECD area currently accounts for around 23 to 26% of world sugar production and consumption. These shares have been declining over the last decade given the growing importance of the developing and transition countries in the world sugar market, and are projected to fall to around 20% for production and 23% for consumption, respectively, by 2017-18. On the production side, reform in the EU leads to a smaller domestic sugar industry, while stable consumption trends largely reflect the mature state of many OECD country sugar markets. Among the leading OECD producers, the wider adoption of smut resistant cane varieties, higher world prices, and a return to average seasonal conditions are expected to result in sugar production in Australia rising to 5.1 mt and sugar exports at nearly 4 mt in 2017-18. The European Union which has currently the largest sugar industry in the OECD area is expected to downsize following the adoption of reforms in 2006 to the common market organisation (CMO) for sugar that are aimed at bringing production down to levels that are better aligned with internal demand and with the EU’s external commitments (Box 7.1). As a result, sugar beet area for sugar production is expected to decline until 2011. Additional amounts of sugar beets, however, will be diverted to industrial purposes such as ethanol production over the medium term. In 2007-08, EU sugar production is expected to reach nearly 18 mt (raw value) and then progressively decline as quota is surrendered or cut to reach around 15.8 mt in 2017-18. With the expectation of lower internal market prices, and some substitution for existing HFCS use, sugar consumption rises moderately to 18.8 mt by the close of the projection period. One outcome of the reforms is that the EU will have turned full circle from its initial position as a net sugar importer at the commencement of the CMO in 1968 to become the world’s largest white sugar exporter in the following years to 2005-06, followed by a return to a net importer status and a sugar deficit region in 2006-07. This transformation essentially came about with the enforcement of lower WTO limits on subsidised exports at 1.374 mt per annum. Exports are expected to stabilise at this level to the close of the projection period. Total imports, however, are anticipated to increase to around 4.7 mt by 2017-18, driven mainly by preferential imports from the LDCs and the African,

112

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

7.

SUGAR

Caribbean and Pacific (ACP) group of developing countries under the Everything But Arms (EBA) initiative and the Economic Partnership Agreements being negotiated by the EU to replace the Cotonou Agreement and expiring Sugar Protocol. As a consequence, the EU is on a pathway to becoming the world’s largest sugar importer, surpassing the Russian Federation which currently occupies this position. As has been observed, this dramatic change in trade direction and status has had an important influence on world sugar price formation and the composition and pattern of international trade, particularly for white sugar. As a result, a considerable quantity of EU supplies, that were largely priceinsensitive, are no longer being exported to world markets with the use of subsidies, and effectively depressing world prices. Instead, the situation has now been largely reversed with the EU becoming a large, price-insensitive importer that covers its needs at whatever level of the prevailing world price. However, the level of EU preferential imports remains an important uncertainty for the Outlook.

Box 7.1. EU sugar production downsising arrangements The reform of the EU’s Common Market Organisation (CMO) regime for sugar on 24 November 2005 includes a voluntary restructuring scheme to buy back surplus production quota. If, however, the restructuring scheme is unsuccessful in removing sufficient quota voluntarily from production by the payment of a fee, the Commission is mandated to apply an across the board “linear” quota cut in 2010, with no financial compensation. The restructuring scheme is intended to achieve the required structural rebalance of the sugar market by encouraging producers in high cost areas to give up quota and leave the industry in return for a (degressive) payment for surrendered quota. The quota reduction objective was set at 6 mt. In the first year of 2006-07, some 1.46 mt of quota were renounced covering sugar and inulin. However, for 2007-08, only 0.71 mt of sugar and isoglucose quota were renounced. Because the restructuring scheme was not working as planned, the EU Council revised the scheme in October 2007 by providing increased financial incentives of higher buy back rates for sugar companies and beet growers. These changes included fixing the percentage of aid given to growers and machinery contractors at 10% and an additional payment for growers who renounced their quota. The rule changes included setting up a two step process for surrendering quota in 2008-09. Under the new arrangements, sugar companies are given to the end of January 2008 to apply for quota renunciation, with a minimum set at the level of what they were forced to give up as part of the temporary preventive quota cut in 2007. The amount nominated by January 2008 has also to be agreed by the affected member states. To participate in a second step for quota surrender in 2008-09, companies are given until 31 March 2008 to offer at least the minimum of quota they had sold back to the Commission. If they do not, the Commission will advise them to what extent they risk an across the board, uncompensated quota cut in 2010. Some 2.5 mt of production quota was renounced in the first step for 2008-09 as well as 0.1 mt to apply from 2009-10. The Commission has indicated that the second round of voluntary quota surrender that closed on 31 March resulted in an additional 851 237 tonnes of quota (847 866 of sugar and 3 371 tonnes of iosoglucose) quota being renounced. Taking account of these latest offers and adding the production quota surrendered in earlier years, a total of nearly 5.7 mt will have been surrendered. The Commission is thus less than 310 000 tonnes short of its goal of 6 mt identified as necessary to ensure a balance market in 2010. If this outstanding amount is not renounced by 2010, the Commission will impose a compulsory reduction in sugar quotas across all member states without any compensation. One other factor in this

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

113

7.

SUGAR

Box 7.1. EU sugar production downsising arrangements (cont.) equation of achieving a balanced market in 2010, however, is whether sufficient quantities of imports will be forthcoming from the LDCs and DCs under preferential import arrangements to meet EU internal market requirements. While the EU remains an export destination with attractive prices given the depreciation of the US dollar that has largely offset the cut in support price under the reforms, these countries also have the choice of giving priority to domestic and regional markets or using cane for ethanol production, similar to the practice in Brazil. These alternatives would affect their sugar export availabilities

North America becomes a single sugar market under NAFTA The United States and Mexico resolved their longstanding sweetener dispute in July 2006 and became one fully integrated market from 1 January 2008 under NAFTA. Mexican sugarcane production is projected to increase with sugar output growing to 6.9 mt by 2017-18. Increased use of HFCS in Mexico, largely sourced from imports, is expected to lead to higher exports of sugar to the United States in 2008 and following years. These exports, despite some continuing growth in Mexican sugar consumption, seek to take advantage of higher prices available in the United States as a result of the loan price support scheme for sugar. Mexican exports are expected to amount to around 15% of US consumption in 2017-18. In the United States, sugar production should increase with a continuation of longer term productivity trends. Some growth is also expected in sugar consumption with rising per capita use. Total sugar production from beet and cane crops is expected to increase to nearly 8 mt and consumption to 10.8 mt by 2017-18. Japan and Korea remain significant importers of mainly raw sugar for domestic processing and consumption over the Outlook period. Korean sugar imports are projected to increase strongly and to grow by some 30% to over 2.1 mt in 2017-18, when compared to 2005-07, whereas imports by Japan decrease slightly over the same time span in line with slowing per capita consumption.

Figure 7.6. EU sugar reform leads to lower production and exports Production

Exports

Imports

Million tonnes r.s.e. 25

20

15

10

5

0 2003

2005

2007

2009

2011

2013

2015

2017

1 2 http://dx.doi.org/10.1787/382630818524 Source: OECD and FAO Secretariats.

114

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

7.

SUGAR

Brazil dominates the South American and World scene Brazil remains the largest sugar and ethanol producer as well as exporter in the world market for these commodities. Sugarcane production has increased rapidly in recent years, due to a combination of higher yields from improved varieties and increase planted area to accommodate the growth in sugar and ethanol production. Sugarcane production is projected to continue to grow rapidly over coming years but at a slightly lower rate that in the last decade. Approximately half of total annual sugarcane output in Brazil is directed toward ethanol production, with the centre-south region accounting for nearly 80% of all sugarcane feedstock. The share of sugarcane allocated to ethanol production is projected to rise to some 64% by 2017-18, to meet rising domestic demand and some growth in exports. Export opportunities for Brazilian ethanol as the lowest cost producer should increase to 2017-18, despite continuing import protection in several countries. The cane allocation share for ethanol production plays a key role in determining the size of annual sugar production and exports by Brazil to the world market and, thus, world sugar price formation. Despite increasing ethanol production projected at some 38 bn litres in 2017-18, sugar production is expected to increase as well to reach 41 mt, an increase of 28% above 2005-07 levels by 2017-18. Brazil’s sugar consumption rises to just over 14 mt with growth of 1.3% per annum and exports reach 27 mt in 2017-18, accounting for more than 50% of world trade. Brazilian exports of high quality raw sugar are projected to increase more rapidly than those for white sugar in the period to 2017-18. Argentinean production has benefited from high world prices and the devaluation of the currency back in 2002. Further investment in the sugar industry is expected to boost production which should reach just over 3.2 mt or some 32% above the average level for 2005-07 by the close of the projection period. Despite higher consumption, the rise in output allows increasing sugar exports that reach nearly 1.2 mt in 2017-18. Colombia is set to produce 3.1 mt of sugar in 2017-18, but supplies are expected to be tight in the light of increasing demand for ethanol.

Figure 7.7. Sugar and ethanol production and exports to increase rapidly in Brazil Sugar production

Sugar exports

Bio-ethanol production (right hand scale)

Million tonnes r.s.e.

Billion litres

50

50

45 40

40

35 30

30

25 20

20

15 10

10

5 0

0 2003

2005

2007

2009

2011

2013

2015

2017

1 2 http://dx.doi.org/10.1787/382662518175 Source: OECD and FAO Secretariats.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

115

7.

SUGAR

Figure 7.8. Global sugar exports are increasingly dominated by Brazil 2005-07

2017

Million tonnes r.s.e. 35 30 25 20 15 10 5 0 Brazil

Thailand

Australia

India EU27 South Africa 1 2 http://dx.doi.org/10.1787/382676820828

Source: OECD and FAO Secretariats.

Russia to become more self-sufficient in sugar Outside of Asia, the Russia Federation and Ukraine have long been important players in the world sugar market. The Russian Federation is the world’s leading sugar importer, having switched most of its imports from white to raw sugar for domestic off-season refining in the 1990s. Ukraine has returned to self-sufficiency in sugar, while Russia’s import requirements continue to fall steadily. Rapid growth in domestic beet production, stimulated by higher prices with tariff protection and increasing investment, has been a feature of the sugar industry in the Russian Federation in recent years. This trend is expected to continue over the medium term against a backdrop of stagnant demand and to result in further import substitution. Sugar production is projected to increase to 4 mt in 2017-18, and with only small growth in sugar consumption, raw sugar imports are anticipated to decline to just over 2.3 mt in the same period. Higher sugar beet yields are expected to lift sugar production in Ukraine to 3 mt by the end of the projection period, a

Figure 7.9. Net sugar imports of Russia continue to decline Production

Net trade

Million tonnes r.s.e. 5

3

1

-1

-3

-5 2003

2005

2007

2009

2011 2013 2015 2017 1 2 http://dx.doi.org/10.1787/382687608108

Source: OECD and FAO Secretariats.

116

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

7.

SUGAR

0.7 mt increase from 2005-07 average levels. Much uncertainty remains on the import side, as these could increase if Ukraine becomes a member of the WTO in 2008. China is the main sugar producer in Far East Asia with both a sugarcane and sugarbeet sector. Sugar production in China has surged over the last two seasons in response to higher sugar prices. With some moderate increases in area harvested and yields, China’s sugar production is expected to reach 15.7 mt in 2017-18, some 3 mt above the 2005-07 average level. Chinese sugar demand has been growing rapidly in the current decade, particularly for use in food products, preparations and beverages, with direct food consumption still relatively low in per capita terms in comparison to other countries in Asia. With tightening government controls on artificial sweeteners, sugar consumption in China is projected to increase by 1.5% per annum to reach just over 19 mt in 2017-18. This level of use would imply rising imports over the Outlook period.

Figure 7.10. The EU and China emerge as the largest sugar importers 2005-07

2017

Million tonnes r.s.e. 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 EU27

China

Russia

United States

Korea

Indonesia

Japan

1 2 http://dx.doi.org/10.1787/382708057606 Source: OECD and FAO Secretariats.

Expansion in yields and moderate growth in cane plantings are expected to boost sugar production in Indonesia to 3.7 mt in 2017-18. The increase is attributed to remunerative returns and government institutional support. The industry is very much dependent on a government subsidy and the division between support levels in rice and sugar. Sugar consumption will remain strong, driven by population growth and high income elasticities. Indonesia as the second largest sugar importer after Russia is expected to further increase imports to 2.1 mt by the end of the projection period. Sugar production in Thailand is projected at 7.7 mt in 2017-18, with a recovery in output following unfavourable weather conditions at the beginning of the Outlook. Production has been characterised by ups and downs over the last decade, as a result of changing policies and variability in growing conditions. Growth in sugar cane-based ethanol is expected to limit further expansion in sugar output. Sugar consumption is expected to increase by 27% between 2005-07 and 2017-18, because of higher use by households and the food and beverages industries. Sugar export should reach 4.8 mt, mainly in the form of raw sugar, with the bulk of the shipments likely to be directed to regional markets in the light of rising freights rates. Ethanol production is set to use about 3.3 mt of cane by 2017-18. Sugar production in the Philippines is projected to reach 2.8 mt

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

117

7.

SUGAR

in 2017-18, mainly reflecting moderate improvement in yields over the Outlook period, while consumption and sugar imports should total 2.3 mt and 94 kt, respectively. India is traditionally the second largest sugar producer after Brazil, and an intermittent sugar trader on the world market. A feature of the Indian sugar market is a long established cycle that is characterised by a boom followed by a bust in sugar production. This arises in part because sugarcane prices, which tend to only rise over time, are fixed by the government to protect growers’ incomes while sugar prices fluctuate, squeezing or inflating miller’s margins, as sugar supplies increase or decline, and affecting their capacity to pay growers for their cane. The pronounced production cycle is expected to continue over the projection period, in the absence of a revenue sharing cane payment system. India is projected to produce 29 mt of sugar, corresponding to less than half a per cent growth over the projection period by 2017-18. Sugar consumption is foreseen to expand by more than 2.4% per annum. This is due to low domestic prices and expected economic growth, raising per capita consumption to 23.6 kg, slightly lower than the projected world per capita consumption level of 25.3 kg. Lower domestic prices are expected to encourage sugar intake at the expense of alternative local sweeteners such as jaggery and gur. Sugar exports are expected to reach 2.2 mt in 2008-09, and thereafter decline as stock levels retreat. Aggregate sugar production in Africa is forecast to increase by about 1.83% per annum between 2005-07 and 2017-18, mainly due to gains in Egypt, Sudan, Mozambique, and Tanzania. The rapid growth is underpinned by not only growing domestic and regional sugar demand, but also by expansion plans to enhance capacity, productivity and exports. This is particularly the case for a number of African Least Developed Countries (LDCs), as they gain duty and quota free access to the EU sugar market from 1 October 2009. In Egypt, sugar production is projected to grow by 0.3 mt, between 2005-07 and 2017-18, to 2.2 mt. Most of the growth will be accounted for by expansion in the area sown to beet, which reaches about 81 000 hectares by 2017-18. The beet sector is more dynamic and attracts the bulk of new investments in the sugar sector, while cane sugar production is stagnant due to limited area and water resources. Sugar consumption is projected to remain strong and to increase at the same rate as during the previous decade, sustained by population growth and expanded use of sugar in food processing. Production in the LDC group as a whole is projected to reach nearly 4 mt, an increase of 33.8% over 2005-07. Driven by rehabilitation and expansion programmes, output in Mozambique and Tanzania is expected to increase by 5.4% and 5.5 % per annum, respectively. Sugar output is also projected to grow in Zambia, but at a slower pace to reach more than 320 000 tonnes in 2017-18. Sugar consumption in the LDCs group is projected to reach 8.1 mt by the close of the projection period, up 2.2 mt from the average level of 200507, and largely reflecting population growth. Much uncertainty remains as to the ability of the LDC countries to significantly increase export volumes given shortcomings in infrastructure, although efforts are being made to increase sugar storage capacity and reduce fobbing costs. Several key factors will have an impact on the profitability of the sugar industry in the LDCs. These include commitments to regional free trade agreements, that call for consolidated sugar policies and prices, changes to preferential agreements, notably with the EU, resulting in a quota and duty free access to the EU market, and the effect of the Economic Partnership Agreements (EPAs) between the EU and the ACP countries. The EPAs will replace the trade chapters of the 2000 Cotonou agreement, which has regulated the sugar trade between both parties. The EU has offered duty and quota free

118

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

7.

SUGAR

access to the ACP countries after 2015. However, the impact of this proposal on the ACP group, and individual countries within ACP in the light of the sugar price reforms underway in the EU, is still subject to much uncertainty.

Key issues and uncertainties The sugar projections discussed in this chapter are a conditional scenario based on a number of assumptions regarding the future macroeconomic environment, a continuation of existing agricultural policies, average weather conditions, longer term productivity trends and the absence of market shocks. Should any of these assumptions change, the resulting set of sugar projections would also be different. For example, the projections for the United States are based on a continuation of the provisions of the 2002 FSRI Act for sugar which expired in 2007, but with replacement legislation still under negotiation in the US Congress. Should the provisions for sugar fundamentally change in the next Farm Bill, for example, along the lines of the version passed by the US House of Representatives in 2007, some significant differences would be observed in the projections for the United States. Major uncertainties for the sugar outlook are, thus, future changes in sugar policies as well as an eventual outcome of the current round of Doha multilateral trade negotiations in reducing support and further opening up sugar markets. The extent to which the current upsurge in renewable energy programmes by countries around the world will impact on future sugar crops use is another uncertainty for the Outlook. Fluctuations in exchange rates and movements in freight rates will also have implications for the export competitiveness of sugar industries. The Brazilian Real has been appreciating against the US dollar in 2007-08. Depending on the future direction of the Real/USD exchange rate this will determine the level at which world sugar prices, denominated in US dollars, are supported by Brazilian costs of sugar production. Finally, sharply higher speculative activity by hedge funds and commodity rebalancing by index funds in sugar futures markets can have an impact on physical cash market prices of sugar and their volatility.

Large EU import volumes will be required to balance the internal market In the case of the European Union, a number of changes are being made to preferential import arrangements in coming years. These include the termination of the longstanding Sugar Protocol (SP) and SPS arrangement with the African, Caribbean and Pacific (ACP) countries in October 2009, and the removal of all duty and import restrictions on sugar imports from LDC countries under the Everything But Arms (EBA) initiative from 1 October 2009. In September 2002, the EU started negotiations on Economic Partnership Agreements (EPAs) with the 77 ACP countries to replace the Cotonou Agreement which expired in 2007. Although these negotiations are still continuing, the EPAs will eventually extend quota and duty free access to all ACP countries from 2015. This will allow additional quantities of sugar to enter the EU (see Figure 7.11). The projections assume the EU preferential imports under these various arrangements will increase over the period to 2017-18 to a level of 3.1 mt and this along with other imports will be an integral part of the exercise to balance the internal market given the planned reductions in quota production by 6 mt. As noted previously, the reduction in EU quota production and beet areas for sugar production is almost a certainty under the existing reform arrangements (see Box 7.1). On the import side, however, the situation is far less certain. Given the expected growth in consumption in the sugar producing LDC and ACP developing countries, as well as

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

119

7.

SUGAR

developments underway in terms of known investments in sugar production capacity and in alternative uses of sugar crops for such things as ethanol production, the question arises as to whether these countries will have the sugar available to satisfy the EU’s growing import requirements in coming years to ensure a stable internal market with lower market prices.

Figure 7.11. Preferential imports to increase in the EU EBA/LDCs

SP/ACP

Balkans

Bulgaria/Romania

Other

Million tonnes r.s.e. 5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0 2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

1 2 http://dx.doi.org/10.1787/382768678221 Source: OECD and FAO Secretariats.

For instance, governments in some of the most important African sugar producing and consuming countries have signed regional agreements to encourage trade amongst themselves and to exploit existing synergies. These free trade agreements (FTA) include commitments to deregulate the domestic sugar industries to ensure common trade policies and prices. In many cases, sugar was considered as a sensitive product and was allowed a waiver period before it would be subject to unrestricted trade. When these waivers come to end, and further integration of the sugar market is realised, it is expected that low cost producers will benefit from increased access to regional markets. This implies that low cost LDCs may face changing relative sugar export prices and may end up redirecting some or all of their EU destined sugar under the EBA initiative to more attractive regional markets. The extent to which volumes are diverted away from the EU and world markets is another uncertainty for the Outlook. What happens when not enough sugar is supplied under preferential imports to meet EU requirements, which will likely be highly price-insensitive? Normally the EU could turn to the world market to meet its additional needs in these circumstances. However, in periods of high world prices, this action may push world prices even higher and discourage additional preferential imports. Should supplies from EBA and former ACP countries prove to be highly variable from one year to the next, or increase less strongly than expected, this situation will add to the problems of achieving internal balance in the EU sugar market and, in turn, possibly generate more price volatility on world markets as other third-party sugar supplies are sought out.

Sugar versus ethanol in the developing countries The results of the projections indicate that developing countries – outside Brazil – will divert close to 2.5% of world sugarcane area to ethanol production by 2017-18, up from 0.9%

120

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

7.

SUGAR

in 2005-07. As a result, they will account for about 8.2% of global sugarcane-based ethanol production by 2017-18, compared to an average of 5.1% in 2005-07 (Figure 7.12). These projections reflect a conditional scenario based on a set of assumptions, including macroeconomic prospects, technological change, and trade policy. For instance, substitution of sugarcane for ethanol production rather than for sugar depends on the relative market returns of sugar versus ethanol. Also, the prospect of higher cane-based ethanol production suggests an increase in the degree of market flexibility for sugar producers in the developing countries. However, the degree to which producers make the necessary investment to diversify into the much larger energy market and take advantage of the growing demand for biofuel is still uncertain. This raises an important question for the Outlook: What would be the impacts on sugar market outcomes and prices if changes to the underlying assumptions implied an increase in cane-based ethanol production at the expense of sugar?

Figure 7.12. Share of developing countriesa in world sugarcane area devoted to ethanol Per cent 9 8 7 6 5 2017-18

4 3

2005-07

2 1 0

1 2 http://dx.doi.org/10.1787/382811574725 a) Brazil is not included. Source: OECD and FAO Secretariats.

The US price support system to come under increasing pressure From 1 January 2008 all remaining restrictions on trade in sugar between Mexico and the United States were eliminated in conformity with NAFTA and the region became effectively a single market for sugar. As a consequence, sugar exports to the US from Mexico, together with those from third countries at the minimum access level of the WTO tariff quota and FTAs, rise to 3.3 mt by 2017-18. At this level, imports exceed the import volume trigger for suspending the marketing allotments program of the 2002 FSRI Act. Consequently, purchases by the Commodity Credit Corporation (CCC) of USDA are expected to be required in each projection year to 2017-18 to defend the US loan rate sugar price support system with domestic prices effectively driven down to minimum loan rate levels. The volume of these purchases will depend to some extent also on the volume of HFCS that is shipped to Mexico from the United States. These are projected to rise in the first three years of the Outlook period and then level off in following years. Should the imports of HFCS by Mexico continue to increase strongly beyond the near term, this will release additional Mexican sugar for export and add to US sugar programme costs. The US Administration has indicated it will take all steps necessary to minimise these programme OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

121

7.

SUGAR

costs. This might include the re-activation of the Payment in Kind (PIK) scheme which was last used in 2001 to dispose of unwanted CCC sugar stocks. Without some programme changes, however, the long-term sustainability of the existing US sugar price support system that provides a (high) floor price to the US, and the entire US-Mexico market after 2008, becomes questionable.

Figure 7.13. US rising sugar imports, CCC stocks and HFCS exports Sugar imports

Sugar CCC ending stocks

HFCS exports (right hand scale’)

Million tonnes r.s.e.

Million tonnes

4

1.0

0.8 3 0.6 2 0.4 1 0.2

0

0 2003

2005

2007

2009

2011

2013

2015

2017

1 2 http://dx.doi.org/10.1787/382826505088 Source: OECD and FAO Secretariats.

122

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ISBN 978-92-64-04590-3 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 © OECD/FAO 2008

Chapter 8

Meat

123

8. MEAT

World market trends and prospects Key market drivers In 2007, agricultural markets where characterised by unusually high prices: grain prices reached record highs, and prices for many dairy products were far above historic levels. Unlike these markets, most meat and livestock markets have not experienced comparable price hikes. This combination of high feed prices and relatively low meat prices has had an overall negative impact on profit margins of meat producers. The lag in transmission of higher feed costs to increased livestock product prices can be partially explained by slow adjustment of production to changes in costs and the typical cyclical movement of prices for some types of livestock. For instance, pork markets in large producing countries such as the US, Canada and the European Union have been characterised by high levels of production and a concomitant cyclical decline in hog prices. In combination with other factors, such as a rapid currency appreciation, this has impeded increased input costs from being reflected in product prices. In addition to livestock prices lagging cost increases, production incentives for land-intensive livestock production, notably beef production, have been further reduced by the high relative profits that can currently be realised with crops and dairy products. The relative profitability of the production of different types of meat is further affected by the availability of Distiller Dried Grains (DDGs) and other non-grain feeds (Box 8.1). DDGs are particularly apt for feeding ruminants and are available in large quantities as a by-product of ethanol production in the US. In this country, DDGs offset to some extent the impact of high cereals and oilseeds prices on production costs for beef, but only to a lower degree on those for pork and poultry. Also beef producers in the United States have an advantage over producers in countries like Canada, where DDGs supply is not expected to be abundant and cattle is finished on traditional feed rations. Countries in which cattle is traditionally raised on grass and this grassland is not converted to arable land for legal, ecologic or economic reasons, can be expected to experience an increase in their relative competitiveness. Through continuing investment, education, improved transportation and other infrastructure improvements, as well as improved production technologies, production of meat and meat products has rapidly increased in many developing countries in recent years. As a result, some of them have been able to increase substantially their role in international meat markets. Brazil is an example of a country that has been successful in establishing itself as the largest meat exporter in a short time: from covering only 10% of world exports in 2000, it has achieved more than 30% in 2007. Given abundant land resources, capital and technology alongside with policy reforms in developed countries that decrease the incentive to produce meat, this trend is expected to continue at the cost of traditional meat exporters like the European Union. Meat consumption will continue to be impacted by economic growth in large parts of the world and notably in emerging and developing countries. Higher incomes and

124

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

8. MEAT

Box 8.1. Distillers Grains Destillers Grains, often with solubles and in dried form (DDGs), represent an important by-product of grain-based ethanol production. The conversion process of cereals to ethanol only uses the starch, which in the case of corn accounts for 70% of the corn kernel. The other 30% of the kernel that include mainly protein, fat, minerals, and vitamins are used to produce DDGs, a valuable feed for livestock with high energy content. This feed can be used especially in the feed ratio of ruminants, and to a certain degree for nonruminants as a substitute for grains and oil meal. DDGs became an important feedstuff in the recent years particularly in the US, the largest producer of grain-based ethanol and hence DDGs, but are increasingly relevant in other markets as well, including Canada and the EU. However, given the size of the grain-based ethanol industry in the US relative to that of other countries, the US is projected to remain the largest producer of DDGs. Over the projection period, the production of DDGs is set to more than double in the US, reaching a level of over 41 mt in 2017, while the production quantities in the EU and in Canada reach levels around 8.5 mt and 2 mt, respectively, in 2017. These figures compare to cereal feed use quantities in the same year of 169 mt, 168 mt and 23 mt, respectively, in these countries, indicating the importance of taking into account properly this emerging feed stuff in the projections. Based on research undertaken in the US, this Outlook assumes that 90% of the DDGs feed use is in the ruminant sector with the rest fed to non-ruminants (meat quality problems put limits on the share of DDGs in the feed ratios particularly for pig meat). While in the ruminant sector it is assumed that a unit of DDGs replaces 0.94 unit of coarse grains, but only 0.06 unit of oilseed meal, this ratio decreases to 0.70 to 0.30 unit in the non-ruminant sector. In consequence, 92% of the available DDGs substitute for coarse grains in the average feed ratios, and 8% for oil meal. In the US, the DDGs replace about 8% of the coarse grains in the feed ratio and 3% of oil meal already in the base period. These shares are projected to rise considerably to 17% and 7% respectively following the strong increase in US Ethanol production over the projection period. Given the smaller production levels of grain-based ethanol, DDGs shares in Canada and the EU remain significantly smaller but are increasing as well.

increased purchasing power in these countries will lead to staple foods of vegetable origin to be replaced by proteins of animal origin. With continued economic growth, protein demand in developing countries will increase especially for low priced foods such as poultry and eggs. But consumer preferences are also changing in many developed countries. Demand for low calorie food products and changes in lifestyles which reduce the time consumers wish to spend on food preparation have been manifest in the past; and this is assumed to continue. Again, it is mainly poultry meat that complies with increased consumer demands for lean meat and ease of preparation. Recent events, such as the import ban that the EU had temporarily posed on Brazilian beef following concerns on product safety, reveal that animal diseases are still an important driving force on world meat markets. Because of the highly unpredictable nature of animal disease incidents, this Outlook abstracts from any new animal disease outbreaks over the projection period. On the other hand, the animal disease induced segmentation of meat markets is assumed to continue. OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

125

8. MEAT

Main market developments Meat prices to evolve significantly Given rising feed costs and strong meat demand in certain developing countries and emerging economies, meat prices are expected to rise above historic levels in the medium term. Non-ruminant production is particularly affected by high cereals and oilseeds prices as low-priced DDGs cannot easily be integrated into the feed ration. These higher input costs are expected to result in increased meat prices over the medium term. Reflecting higher feed costs, but also sector adjustment and the ability of producers to pass part of the higher input cost on to consumers in the medium term, pork prices are expected to continue to exhibit cyclical movements but on higher average levels than in the past. Over the Outlook period, pork prices are expected to remain on average some 24% above the average of the last decade. In the short term, however, world pork prices are expected to remain low due to large hog supplies, widening the gap between the cost of producing pork and the price that producers receive for a finished pig.

Figure 8.1. World prices for meat to strengthen USD/100 kg

USD/100 kg

190 180

USD/100 kg

350 Poultrya

330

450 Beefc

Lambd 400

310

170

290

160 Pork b 150

350

270 300

250 140

230

130

250

210

120

190

150

150 19 9 19 7 99 20 0 20 1 03 20 0 20 5 0 20 7 09 20 1 20 1 13 20 1 20 5 17

100

200

19 97 19 99 20 0 20 1 03 20 0 20 5 0 20 7 09 20 11 20 13 20 15 20 17

170

19 9 19 7 99 20 0 20 1 03 20 05 20 0 20 7 09 20 1 20 1 13 20 1 20 5 17

110

1 2 http://dx.doi.org/10.1787/382847344827 a) b) c) d)

Wholesale weighted average broiler price, ready to cook, 12 cities, US. Barrows and gilts, No. 1-3 Iowa/South Minnesota, US dress weight. Choice steers, US, dress weight Nebraska. New Zealand lamb schedule price all grade average, dressed weight.

Source: OECD and FAO Secretariats.

Feed costs also account for a large part of total cost of production for poultry. But when compared to production of pigmeat, the production cycle of poultry is relatively short and producers can react to changes in input costs and prices in a rather flexible manner. This became clear when prices rose from about 1.40 USD/kg in 2006 to almost 1.70 USD/kg in 2007. Over the projection period, poultry prices are expected to stay on high levels, averaging almost 20% above the average of the previous decade. The share of feed grain in the total production costs of cattle is less than in the abovementioned non-ruminant meat production. In addition, DDGs can be used to substitute part of the protein in the feed ration for ruminants, offsetting some of the cost increase in other feedstuff. Nevertheless, cattle prices are also expected to be affected by higher feed costs. Additionally, low cattle inventories in the US, due to drought in recent years, hold up the beef price in the beginning of the projection period. The world beef price

126

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

8. MEAT

over the projection period is estimated to average just under 18% above levels during the previous decade. The average beef price over the projection period remains approximately 3% higher than on average over 2005-07. After some years of downward movement, world lamb prices dropped further in 2007. This effect can be explained by unusually high slaughter rates induced by lack of feed as a consequence of severe drought in Australia and New Zealand. However, strong international demand for lamb is expected to meet tight supplies, as sheep producers are expected to rebuild flock numbers and reduce slaughter. As this strong demand is expected to outpace production, recovery of lamb prices is anticipated for the next decade.

Despite high feed costs, world meat production continues to grow Despite high feed costs and competition for land resources, world meat production is projected to grow over the Outlook period, though at slower pace than in the past decade. There was slow growth in world meat production from 2006 to 2007, mainly caused by a drop in Chinese pork production where the sector was much affected by massive pig slaughter following an outbreak of Porcine Reproductive and Respiratory Disease Syndrome (PRRS) and high feed prices. But global meat production resumes its growing trend again over the Outlook with an average growth rate of almost 2% per annum.

Figure 8.2. Continued expansion in world meat production OECD

Developing

Developed

1 000 t 250 000

200 000

150 000

100 000

50 000

0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

1 2 http://dx.doi.org/10.1787/383107752756 Source: OECD and FAO Secretariats.

Growth in meat production is unequally distributed across regions. While meat production in OECD countries is only projected to grow by less than 1% per annum, regions dominated by developing countries such as Africa, Latin America, the Caribbean and Asia and the Pacific are expected grow at rates between 20% and over 30% between the 200507 base period and 2017. As a result, the share of meat produced in developing countries will reach 63% of total meat produced around the globe. This picture is dominated by large, fast growing developing countries like Brazil, Argentina and China. Russia’s meat production is also expected to grow by over 50% compared to the base period, followed by Brazil and Argentina with over 30%, and China with almost 30% growth when comparing 2017 to the base period.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

127

8. MEAT

Some of the gains will come from non-traditional meat-supplying areas of the world such as the Commonwealth of Independent States (CIS) or Sub Saharan Africa, which will account respectively for 6% and 3% of the increase in world meat production. However, as a whole, the rate of growth will be lower over the next decade compared with the previous one.

Figure 8.3. Regional distribution of meat production increases between 2005-07 and 2017 North America Europe Oceania developed Africa Latin America and Caribbean Asia and Pacific -10

0

10

20

30

40 %

1 2 http://dx.doi.org/10.1787/383124858018 Source: OECD and FAO Secretariats.

The positive development of meat production is unequally distributed across regions as well as commodities.. The strongest growth is exhibited for poultry and pork, which are projected to grow at an average annual rate of nearly 2%. The growth rates for beef and sheep production are projected to be slightly lower, but still above 1.6% per annum over the projection period. It should be noted that the average annual growth rate of non-ruminant meat over the projection period is slowed down compared to the previous decade, while meat from ruminants exhibits higher annual growth rates as in the previous decade.

Figure 8.4. Contribution of different meats to production increases between 2005-07 and 2017 Beef

Pork

Sheep

Poultry

Asia and Pacific Latin America and Caribbean Africa Oceania developed Europe North America -60

-40

-20

0

20

40

60

80

100 % 1 2 http://dx.doi.org/10.1787/383162784367

Source: OECD and FAO Secretariats.

128

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

8. MEAT

Nevertheless, in Europe and North America, growth in poultry production accounts for around 50% of the production increase. In Australia and New Zealand, the structural change in the industry is even more noteworthy. In this region, production of all types of meat except poultry is lower in 2017 that it was on average over 2005-07. The ranking changes when only the Asia and Pacific region is of interest. Then, pork has the highest share in additional meat production, followed by poultry, beef and sheep. It should be noted however, that this picture is dominated by China, where pork is traditionally the most important meat. In other developing regions like Latin America and Africa production will mirror consumption trends which favour poultry as the preferred meat.

Unequal development of consumption gains across countries and products Fuelled by economic growth and changing dietary patterns, consumption of meat is projected to grow both in developed and developing countries in spite of higher projected meat prices over the next decade. The projected development of meat consumption differs significantly both in quantitative and qualitative terms between developed and developing countries. In developed countries, the per capita consumption of meat is expected to grow only moderately from a little more than 64 kg in the base period to almost 70 kg in 2017. This increase in meat consumption is largely due to higher poultry consumption, which increases by more than 13% from the average of 2005-07 to 2017. Per capita intake of beef and pork remains rather stable over the Outlook period, while sheep meat consumption declines. In developing countries, meat consumption growth is much more pronounced than in developed countries. Compared to the average of 2005-07, per capita meat consumption for this group of countries is expected to increase by almost 13% from 24 kg to more than 27 kg in 2017. For the reasons explained above, poultry accounts for the largest part of additional consumption.

Figure 8.5. Composition of per capita meat consumption in 2017 compared to 2005-07 Beef

Pork

Poultry

Sheep

Kg/capita 80 70 60 50 40 30 20 10 0 2005-2007

2017

2005-2007

Developed

2017 Developing

1 2 http://dx.doi.org/10.1787/383184638566 Source: OECD and FAO Secretariats.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

129

8. MEAT

Further analysis of the development of consumption at more disaggregated regional level also reveals variation in consumption trends across regions. In North America, almost three quarters of the consumption gains between the base period and 2017 originate from increased poultry consumption. In Europe, the consumption gains are almost equally distributed among poultry and pork, with sheep meat consumption declining compared to the base period. In the developed countries of Oceania, sheep meat consumption is expected to decline significantly, with poultry and beef dominating the overall growth in meat consumption.

Figure 8.6. Shares of different meat types in growth of consumption Beef

Pork

Poultry

Sheep

Asia and Pacific Latin America and Caribbean Africa Oceania developed Europe North America -40

-20

0

20

40

60

80

100

120

140 %

1 2 http://dx.doi.org/10.1787/383227245574 Source: OECD and FAO Secretariats.

In regions with more developing countries, consumption of all types of meat increases. In the case of Africa, growth is predominantly recorded for poultry and beef. In the Asia and Pacific region, it is pork meat that dominates the increase in consumption. Again, it should be noted that in this region, the largest market is China, where pork is traditionally the most important meat in the diet. In countries other than China in the Asia and Pacific region, poultry is the meat type that is expected to account for most of the additional meat consumption. The same holds true for Latin America, where additional consumption of poultry accounts for almost half of the additional meat consumption. For the poorest countries in the world, the Least Developed Countries, the outlook for the availability of animal protein is not so bright. Despite firm income growth, simultaneous population growth leads to a nearly stable per capita consumption of meat. Last, but not the least, another important source of protein intake comes from eggs, consumption of which rises in all developing regions of the world. With rising incomes, the demand for animal protein increases, and the efficient conversion of feed into eggs stimulates its consumption. In addition, as consumption of eggs grows, so does that of poultry meat in the form of slaughtered laying hens.

130

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

8. MEAT

Figure 8.7. Egg consumption in selected regions Kg/Capita 8 7 6 5 4 3 2 1 0 1997

2007

2017

1997

Africa

2007

2017

Asia a

1997

2007

2017

Latin America b

1 2 http://dx.doi.org/10.1787/383281235288 a) Excluding China. b) Excluding Argentina and Brazil. Source: OECD and FAO Secretariats.

Further growth in world meat trade World meat trade is expected to continue to grow along the established increasing trend. From 21.9 m tonnes on average in 2005-07, it is projected to increase to 29.4 m tonnes in 2017. Apart from general sector development in some countries, policy changes and reopening of markets after animal disease-induced trade bans are some of the driving factors behind this development. This growth in trade, however, is unevenly distributed across countries. Brazil and the US are expected to continue expanding their share in world meat exports, which, for the two countries taken together, is expected to increase from 47% in the 2005-07 base period to 57% in 2017. One of the reasons behind the growth in exports from Brazil is the fact that the European Union beef production is continuously declining, while consumption remains rather stable. The increasing gap is filled with imports mainly from Mercosur countries, and especially from Brazil, whose low production costs allow the import of significant quantities at full levy into the EU. With increasing demand and decreasing beef exports from the EU that traditionally supplied Russian markets, Russia has also become an important destination for beef from Brazil in recent years. Unlike many other exporting countries, Brazilian beef is nearly exclusively grass-fed. In a context of high feed grain prices, this could make Brazilian beef more competitive on international markets compared to grain-fed beef where consumers do not have a strong preference for the latter type of beef. In the case of the US, the export growth can partially be attributed to the progressively lifted trade bans that were put in place after the discovery of several cases of Bovine Spongiform Encephalopathy (BSE) in North America in 2003. As a consequence of reduced beef production and exports, the share of meat exports from the EU in world meat trade is expected to further decrease. While the EU accounted for almost 11% on average of world meat exports over the years 2005-07, they are expected to lose market shares and cover less than 6% in 2017. Argentina has seen some rapid development of exports in the first half of this decade, but export restrictions have impeded the meat export sector from growing in recent years. The continuation of these policies and relatively stable beef OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

131

8. MEAT

production support this trend in the near future, until strongly increasing pork exports contribute towards trade volumes in the second half of the projection period. Canada’s share in world meat exports is expected to decrease from around 8% in the base period to under 6% in 2017. Continuing high feed prices, the expected continuation of the strong currency and increasing labour costs in the meat packaging industry contribute to this development. Moreover, the implementation of the Country of Origins Labelling (COOL)* by the United States, its biggest export destination for both pigmeat and beef, should result in a drop in slaughter volumes as the situation is likely to promote exports of live piglets for finishing in the US. The same logic should hold for beef and cattle exports that should shift in favour of exporting feeder cattle. The export share of developing countries excluding Brazil and Argentina is expected to fall, despite an increase in meat exports from these countries from 5.7 million tonnes on average in 2005-07 to around 10.5 mt in 2017.

Figure 8.8. Development of world meat exports (excluding live animals) Brazil

United States

Australia

Argentina

Canada

EU

Other

1 000 t 35 000 30 000 25 000 20 000 15 000 10 000 5 000

16

17 20

20

14

13

12

11

15 20

20

20

20

20

09

08

07

06

10 20

20

20

20

20

04

03

02

01

00

9

8

05 20

20

20

20

20

20

19 9

19 9

19 9

7

0

1 2 http://dx.doi.org/10.1787/383313778118 Source: OECD and FAO Secretariats.

Russia projected to remain the leading net importer of meat over the Outlook period Russia is set to remain the leading net meat importing country, though Russian meat imports remain rather stable over the projection period. Pork, beef and poultry imports into Russia are all constrained by tariff-rate quotas. For poultry the slightly expanded tariff-rate quota is expected to be binding. The tariff rate quotas for beef and pork have been overfilled in the past years, and a relatively stable degree quota overfill is also projected for the future. This limited import growth is explained as increasing demand for meats goes in parallel with expanded production. As a result of decreasing population that offsets the effect of stable or declining domestic meat production, Japan’s net imports of meat are expected to increase only moderately by around 5% comparing 2017 to the base period. * The proposed rule would require that retailers specify the country of origin of perishable products including red meats. For the meat industry, this may imply the separation of meats of different origin during the production process, and therefore an additional cost. This in turn would give an incentive to purchase animals risen in the US instead of meat from Canada.

132

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

8. MEAT

Korea is expected to significantly increase its position as a net importer of meat. Net meat imports are expected to roughly double from 584 kt on the 2005-07 average to 1.17 mt in 2017. For Korea, the net imports of both beef and pork more than double compared to the base period, while net imports of poultry increase by around 40% from the base period to 2017. With growing population and rising income, growth of demand for meat outpaces production gains in Mexico. Meat imports are projected to increase by roughly 50% comparing the 2017 figure to the 2005-07 average. With over 640 kt in 2017, poultry remains the meat for which Mexico’s net trade position is the weakest.

Figure 8.9. Major meat net importing countries Beef

Pork

Poultry

Sheep

1 000 t 500 0 -500 -1 000 -1 500 -2 000 -2 500 -3 000 2005-2007

2017

2005-2007

2017

Korea

Japan

2005-2007

2017

2005-2007

2017

Russia Mexico 1 2 http://dx.doi.org/10.1787/383344333604

Source: OECD and FAO Secretariats.

Despite favourable economic conditions, the import dependency of the Least Developed Countries will continuously increase over the Outlook period to reach more than 12% of total consumption.

Figure 8.10. LDCs lose ground in trade for meat products Net trade

Imports/share of consumption

1 000 t

Per cent

200

16

0

14

-200

12

-400

10

-600

8

-800

6

-1 000

4

-1 200

2

-1 400 1992

1994

1996

1998

2000

2002

2004

0 2010 2012 2014 2016 1 2 http://dx.doi.org/10.1787/383418666350 2006

2008

Source: OECD and FAO Secretariats.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

133

8. MEAT

Key issues and uncertainties Exchange rate developments, the continuation of current biofuel policies, weather conditions and the animal health situation are all factors that will condition the situation over this Outlook period. An unfavourable development of the Brazilian real could narrow the comparative advantage of the largest player on international meat markets. Outbreaks of animal diseases like Foot and Mouth disease, Blue Tongue or Avian Influenza could at any time occur and lead to unexpected developments on international meat markets. The continuation of support policies for biofuels and weather conditions will determine the availability and of grains and oilseeds for animal feeding. The substitution of dairy farming or crop production is a very recent phenomenon in many countries and the extent to which this will happen in the future is still unclear. Substitution between these activities over the Outlook horizon will depend very much on the persistence of the current disparity between dairy, grains and meat prices and the cost of adaption to new production technologies that producers face, as well as agroenvironmental legislation. High food prices represent a challenge, especially for developing countries. In some cases, governments responded to the food price escalation by restricting exports of feedstuff or meat in order to raise the availability in the domestic market. In the long run, the effect of these measures can be adverse. For example, the measures the Argentine Government has taken to keep meat prices under control has reduced the incentive to produce beef; this resulted in land historically reserved for pasture being diverted to crop production. Growth in meat production and trade may be less than projected in this Outlook if more countries introduce such trade restricting measures in the future. Trade policies will continue to play an important role on meat markets in the future. The end of the Russian ban on meat imports from Poland can be assumed to trigger additional export opportunities for Polish meat producers. In the case that the Russian Federation joins the WTO, changes in its overall trade policies and consequently international meat trade patterns can be expected. The conclusion of the US-Korea Free Trade Agreement is expected to provide significant export opportunities for US meat exporters. Last but not least, a conclusion of the Doha Round of multilateral trade negotiation would bring about increased market access, thereby fostering international meat trade. Sanitary requirements, however, will ultimately determine whether any increase in market access can de facto be used or not. The evolution of reciprocal sanitary agreements, therefore, along with tariff reduction, will play a crucial role in shaping world meat trade through this Outlook period. The development of Chinese agricultural and trade policies presents a major uncertainty. During the sharp drop in pork production in 2007 caused by PRSS, pork imports to China were not sufficient to keep prices down. This can partly be explained by strict sanitary requirements for pork imports into China, which deterred many countries from exporting to this destination. Chinese meat imports have been growing, but at the same time, the Chinese Government is boosting domestic meat production. It has announced significant investment in mass immunisation and insurance schemes for pigs, in an effort to improve the production incentives. Today, it remains to be seen if these measures will be sufficient to satisfy the increasing demand for meat through increased domestic production, or whether China will become a more significant meat importer in the future.

134

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

8. MEAT

The impact of meat production on the environment should not be ignored. Currently the livestock sector rates among the three most significant contributors to environmental problems, such as land degradation, climate change, air pollution, water shortage and pollution as well as loss of biodiversity. The growth in competitive livestock production that could help to supply developing countries’ increased demand for meat can only be achieved with improved technical efficiency. This requires proper animal husbandry: feeding, housing, health and breeding practices. Processing and adding value to animal products will increase the returns to the producer and help in providing a safe product for the consumer. In order to allow for growth of the meat sector, especially in developing countries, government actions are required to improve access to credit, inputs and latest production technology. Education, improved transportation and infrastructure should be developed to connect developing countries agriculture to the domestic and international markets.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

135

ISBN 978-92-64-04590-3 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 © OECD/FAO 2008

Chapter 9

Dairy

137

9. DAIRY

World market trends and prospects Key market drivers In recent editions of this report, the key driving forces identified as conditioning the medium-term evolution of the global dairy industry have been strong demand growth, largely in developing countries, within the context of restrained supply from traditional OECD exporters. The main drivers on the demand side in developing countries are a sustained growth in population, a rapid pace of urbanisation, and higher per capita income growth than has been experienced in decades. Consumption of milk and dairy products varies vastly by country/culture, but is rising nearly everywhere, exhibiting the highest growth rates among agricultural food commodities. Supplies from traditional OECD exporters have slowed, either due to supply constraints and/or policy reforms that have reduced production and export incentives. These fundamental factors remain the same in the projections provided in this Outlook. New, and more spectacular in this projection, is the major issue of how the global dairy industry will react to the unprecedented price spike experienced in 2007. This spike was already on top of the historically high nominal prices of 2005 and 2006, and has led many to consider that the dairy industry has entered a new “world”, where international markets have suddenly become profitable, and not simply a dumping ground for excess supplies, as it had a reputation for in the past. High international prices of dairy products have sent strong signals for supply response from both traditional and emerging exporters. More importantly, they have also filtered through into developing countries, creating incentives for investment, expansion and restructuring in net importing countries, and challenging the interface of formal and informal markets. Such price incentives may encourage technology as a factor to reshape the industries of these countries, creating supply potential that will enable future production growth and improved domestic marketing linkages, positioning these countries in a stronger competitive position in their local markets. The supply response to higher prices must also face the fact of higher costs induced by both higher feed and higher energy prices. These affect production, processing and distribution of milk products, and will encourage the competitiveness of pasture based systems. They also will affect trade, as higher transportation costs put local production at greater advantage. In addition to these market forces, dairy policies will continue to have a critical impact on the evolution of world dairy markets. These policies include high tariffs and tariff quotas which restrain import demand. They also include continuation of supply management arrangements in the European Union, but also in Canada, Japan and Norway. But conditioning policies are not confined to OECD countries. Some key emerging suppliers, such as Argentina, apply export taxes, other policies include variable tariff regimes, and fixed producer or consumer prices. The current policies are assumed to continue over the Outlook, conditioning domestic responses to international market developments.

138

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

9.

DAIRY

Main market developments World dairy prices fall after a spectacular increase, but remain firm over the entire Outlook period International dairy prices increased spectacularly in 2007, recording particularly strong gains in the first half of the year. On a year over year basis, world butter prices increased by 66%, cheese prices by 50% while those for milk powders soared by more than 90%. The end of forward fixed-price contracts in the summer obliged buyers to purchase at much higher prices which resulted in an equally spectacular jump in retail prices, putting dairy in the headlines around the world. This tight situation on the market is linked to continuing solid demand for dairy products in important dairy markets such as the European Union, the United States, Russia, Mexico, North Africa, the Middle East and also in rapidly growing economies of the Pacific Rim where an expanding middle class population is consuming more sophisticated processed foods. On the other hand, milk production has declined in Australia, Argentina and the EU and was hindered elsewhere by rapidly increasing production costs – rising oil and feed prices. The situation has been to some extent aggravated by policy decisions in certain countries to tax or ban exports. Speculation in the face of extremely low global dairy stock levels has also contributed to the sharp climb in prices. Moreover, stronger currencies vis-à-vis the US dollar mitigated the producer price gains in local currencies while at the same time facilitated higher demand by importers, thus driving world price higher in USD terms. During the price spike, prices of skim milk powder were the first to shoot up reflecting the largely residual function of SMP in the dairy product processing system. Prices of WMP followed suit with some delay, and those of butter and cheese tagged along yet later. In September 2007, prices started to ease, particularly for powders (mainly SMP and whey powders) as food manufacturers looked for cheaper substitutes. Demand also started to abate as higher prices filtered through to consumers. World butter and cheese prices are however expected to stay firm in 2008, keeping the long term relative dairy product value ratios in line. All dairy prices are expected to weaken somewhat over the next two years as supply, with some lag, reacts to the strong price incentives. While prices are anticipated to decline from current high levels, it is expected that they will remain firm over the entire Outlook and stay at about 100-150 USD per100kg, or 65% to 75%, higher compared to the previous decade (Figure 9.1). In real price terms, the well-established longer term declining trend was reversed radically last year. Over the Outlook, the prices in real terms are expected to resume a modest declining trend, albeit from a much higher level than in the past: over the next decade, dairy prices in real terms average 20% to 40% higher as compared to those of the last decade (Figure 9.2).

Milk production growth on trend over the Outlook World milk production is expected to increase by 142 million tonnes between 2007 and 2017 with an average annual growth rate of 1.8%. The growth rate is marginally lower when compared to the period 1998-2007 (2% per annum) mainly due to slower milk production growth in China. Although the expansion in milk production in China is expected to slow down as a result of increasingly pervasive water and feed limitations,

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

139

9. DAIRY

Figure 9.1. Prices to remain firm over the projection period USD/100 kg

USD/100 kg

USD/100 kg

350

450

500 450

400

300 Cheese a

350

400

Butterb 250

300

350 300

200

250 200

Whole milk powderc

250

150

200

150

150 100

100

100

Skim milk powderd 50

50 1987

1997

2007

2017

50 1987

1997

2007

2017

1987

1997

2007

2017

1 2 http://dx.doi.org/10.1787/383428357736 a) b) c) d)

F.O.B. export price, cheddar cheese, 39% moisture, Oceania. F.O.B. export price, butter 82% butterfat, Oceania. F.O.B. export price, WMP 26%, Oceania. F.O.B. export price, not fat dry milk, 1.25% butterfat, Oceania.

Source: OECD and FAO Secretariats.

Figure 9.2. Prices in real terms 20% to 40% above historical averages USD/100 kg

USD/100 kg

USD/100 kg

300

400

400

350

350 250 Cheese a

300

Butterb

300

Whole milk powderc

200

250 200

250 200

150

150

150 100 Skim milk powderd

100 50

50 1987 a) b) c) d)

100

1997

2007

2017

50 1987

1997

2007

2017

1987

1997

2007

2017

1 2 http://dx.doi.org/10.1787/383473036301 F.O.B. export price, cheddar cheese, 39% moisture, Oceania, deflated by US GDP 2002 = 1. F.O.B. export price, butter 82% butterfat, Oceania, deflated by US GDP 2002 = 1. F.O.B. export price, WMP 26%, Oceania, deflated by US GDP 2002 = 1. F.O.B. export price, not fat dry milk, 1.25% butterfat, Oceania, deflated by US GDP 2002 = 1.

Source: OECD and FAO Secretariats.

China is still expected to register the highest growth over the projection period – increasing milk output by more than 4% annually. The overwhelming majority (82%) of additional milk will be produced outside the OECD area. China, India, Pakistan, Argentina and Brazil account for half of the global milk production gains. The rest of the additional milk (18%), produced in the OECD countries, comes mainly from Oceania and the US (12%).

140

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

9.

DAIRY

The impacts of high milk prices partly offset by increased input costs Milk producers are expected to see relatively high milk prices but they will also be confronted with higher input costs (land prices, feed, energy, replacement heifers) and increased opportunity costs to move into alternative productions; these latter pressures will vary considerably by country. Nevertheless, the outlook is for milk production to increase over the medium term, particularly over the next several years, as in net terms, profitability will be higher than in the past. Pasture based production systems are projected to grow more rapidly, while those depending on grain inputs will grow less. For many developing countries growth in milk production will exceed that of the recent past. This might not be the case for developed countries although the situation is country and region specific (Figure 9.3). ●

United States – the trend of declining cow numbers, recently reversed, is going to continue over the Outlook but the production is expected to remain on trend despite higher costs as a lower average age of the dairy herds boosts yields. Production grows by nearly 1% annually – a growth covering more than 40% of additional milk production in the OECD area over the Outlook.



New Zealand – production is projected to increase by 2.6% annually, a lower growth rate than seen in the 1990s despite strong international prices. This is mainly due to higher costs (land prices) and increased environmental concerns. While the New Zealand industry is becoming gradually more capital intensive with increased production costs, it nevertheless retains its dominant position on the global markets over the Outlook.



Australia – after falling by more than 5% in one year, Australian milk production is expected to grow on average by 2.6% annually. Recent widespread rain brought more optimism about the dairy industry potential under strong international prices. The trend towards larger farms and increased efficiency is the main driver in the future.



European Union – milk production in the EU has declined marginally in 2007 with deliveries staying below the quota level. A dry summer, increased costs and only slow transmission of high international prices to domestic milk producers (owing largely to contractual arrangements) are some of the reasons behind the weak production. Over the Outlook period, production is expected to largely (although not to the full extent) follow the milk reference quantities, increased in 2008 by 2%.



Argentina – milk production is expected to grow by more than 3% and recover quickly from the recent 8% tumble linked to adverse weather conditions. The potential for even stronger expansion is hindered by government-imposed export taxes, and to some extent, by the high cereals and oilseeds profitability. As a result of fierce land competition farmers might be gradually moving to a more intensive dairy production system, focusing on improved genetics and nutrition.



India – milk production in India is projected to grow 2.4% per annum and add a further 27 mt to India’s large milk production base, further consolidating its position as the world’s largest dairy industry. This growth is underpinned by strong domestic demand, fuelled by high income growth which will generate positive market conditions to sustain expansion. Increasingly, expansion will derive from milk cows as opposed to buffalo cows. Yield increases are expected to account for the majority of production gains, as improved management and technology adjustments continue over the Outlook.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

141

9. DAIRY

Figure 9.3. Milk production growth from 2005-07 to 2017 2005-07

2017

EU India United States China Russia Pakistan Brazil New Zealand Ukraine Australia Mexico Argentina 0

40

80

120

160 Million tonnes

1 2 http://dx.doi.org/10.1787/383481571626 Source: OECD and FAO Secretariats.

Production gains are foreseen in other Latin American countries that are of a similar order as those in Argentina. For example, production in Uruguay is expected to grow by 3.7% annually over the Outlook. High prices also provide the incentive for stronger milk production growth in Africa (3.1% per annum). In Eastern Europe, Ukraine’s production would grow just below 3% annually, providing the potential to increase the country’s presence on world markets.

Production and trade to increase mainly for butter and WMP Most of the additional milk production is expected to be processed into dairy products. In developing countries, however, fresh fluid milk and fluid milk products will retain by far its dominant share of domestic milk markets. World production of butter increases by 30% from the 2005-07 average level. More than three quarters of additional butter is expected from India with New Zealand adding an extra 5%. The main driving force for whole milk powder production is its use for reconstitution in milk production deficit areas and in low-production seasons. Over the Outlook all the additional production of WMP – up 23% – is expected to come from developing countries as gains in Oceania are negated by reductions in Europe. China and Argentina account for 57% and 23% of extra WMP production respectively. SMP and cheese production is expected to grow by 19% and 18% respectively. The US deliver more than 40% of the additional global SMP production. More than half of the global gains in cheese production come from the EU (38%) and the US (19%).

World export markets will continue to be dominated by few major players Despite the recent slowdown in trade growth, world exports are expected to increase for all products with cheese trade growing the fastest – by 36% over the projection period. Nevertheless, WMP remains the most important dairy product in international trade with nearly half of all WMP production traded. Over the projection period developing countries and emerging economies are expected to increase their presence on global markets, but only very few are able to affect significantly the shares of traditional OECD exporters. Ukraine is expected to increase its

142

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

9.

DAIRY

presence on the export markets mainly for cheese while Argentina is emerging as a dominant player on the WMP market, more than doubling its exports over the projection period. Uruguay may also more than double its exports of all dairy products, albeit from a smaller base. Exports of SMP from the US are expected to grow by 60% making the US the largest SMP exporter ahead of New Zealand, whose exports will increase by 40% from the 2005-07 period (Figure 9.4). EU exports of cheese remain relatively stable but those of WMP are expected to be reduced by a half, while butter and SMP exports attain only 20-30% of the level of the historic period-average used as a benchmark for this projection (Figure 9.5).

Figure 9.4. United States overtake New Zealand in SMP exports United States

New Zealand

1 000 t 450

300

150

0 1972

1981

1990

1999

2008

2017

1 2 http://dx.doi.org/10.1787/383484711445 Source: OECD and FAO Secretariats.

Figure 9.5. Major dairy product exporters Argentina

Australia

EU

New Zealand

United States

Rest of world

1 000 t 2 400

1 800

1 200

600

0 2005-2007

2017

Butter

2005-2007

2017

2005-2007

Cheese

2017 SMP

2005-2007

2017

WMP

1 2 http://dx.doi.org/10.1787/383506811731 Source: OECD and FAO Secretariats.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

143

9. DAIRY

Global imports to be sustained through solid demand mainly from Asia Driven by milk reconstitution needs, global imports of skim milk powder and whole milk powder will grow by 3-3.5% annually over the medium term, and they will grow most in Asia. Growing employment opportunities for women in that region contribute to the higher demand for milk via baby food formulas. Currently, Asia imports 58% and 53% of global skim milk powder and whole milk powder trade respectively. These shares will grow to 60% and 58%. Import markets will remain fragmented compared to those for exports. The six largest importers of dairy products cover only less than 50% of the world market. (Less than 30% for WMP) (Figure 9.6). Algeria, Saudi Arabia, Nigeria and China are among the most important WMP importers while Mexico, the Philippines and Malaysia are leading SMP importers. Russia remains the most important importer of butter and cheese. With consumption driven by increasing incomes, it is expected that imports of these products to Russia grow by more than 60% over the Outlook period. Among the other principal importers of cheese figure Japan, the United States and Mexico while the European Union remains an important importer of butter mainly from New Zealand for historical reasons and market access quota allocation.

Figure 9.6. Major dairy product importers Russia

Algeria

China

Japan

Mexico

Saudi Arabia

Rest of world

1 000 t 2 400

1 800

1 200

600

0 2005-2007

2017

Butter

2005-2007 Cheese

2017

2005-2007

2017 SMP

2005-2007

2017

WMP

1 2 http://dx.doi.org/10.1787/383524884725 Source: OECD and FAO Secretariats.

Growing income and appetite for milk and dairy products drives consumption over the Outlook Developing countries are the engine behind the global milk and dairy consumption gains. The main driver there remains population and income growth. However, demand is also to be stimulated by a range of new products, expansion of cold storage facilities, improved shelf life and product marketing, increasing presence of western retail chains and fast food catering. Consumption of dairy products in the area outside of OECD is expected to increase by 20-40% over the Outlook. The fastest growth in per capita consumption is expected in China where milk and dairy product consumption increases by 40-60%.

144

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

9.

DAIRY

The consumption of dairy products in the OECD area should increase only modestly with the main drivers being nutrition and health concerns. The strongest growth is exhibited for fresh dairy products and cheeses. The popularity of the “probiotic” diet is boosting consumption of yoghurts and fermented milk drinks. Dairy products are increasingly enriched with vitamins, proteins and other health improving functionalities (i.e. combating high cholesterol levels, improving sleep). Cheese consumption is propelled mainly through cheese use as an ingredient in food products such as pizzas, hamburgers, sandwiches and ready-to-eat-meals, but also through increased variety of speciality cheeses and consumers’ desire to try new products.

Consumption of dairy products remains affected by income profiles and product attributes OECD countries continue to dominate cheese consumption and maintain their three quarter share of the world total while other countries consume more than 80% of global WMP consumption. OECD cheese consumption is expected to increase by 16% over the Outlook period while consumption for butter remains stable as a drop in the EU is compensated by increases in the US. In countries outside the OECD area, demand growth is expected for all dairy products with butter consumption growing the strongest (48%), followed by WMP (43%) over the Outlook (Figure 9.7). Strong growth for butter comes primarily from increased demand for butter and ghee in India and a recovery in butter consumption in Russia. The growth in consumption remains region-specific and varies highly among products (Figure 9.8). In general, higher income growth, urbanisation, and the changing demographic pyramid are contributing to higher per capita demand for value added dairy products. Dairy products remain among the agricultural commodities for which production and consumption exhibit the highest growth rates.

Figure 9.7. Outlook for global dairy product consumption OECD countries

Countries outside the OECD area

Million tonnes 25

20

15

10

5

0 2005-2007

2017

2005-2007

Butter

2017

2005-2007

Cheese

2017 SMP

2005-2007

2017

WMP

1 2 http://dx.doi.org/10.1787/383530662862 Source: OECD and FAO Secretariats.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

145

9. DAIRY

Figure 9.8. Sustained growth for butter and cheese consumption over 2008-2017 Cheese

Butter

Asia Latin America Africa Russia EU27 United States -1

0

1

2

3 4 Least squares annual growth

1 2 http://dx.doi.org/10.1787/383533262056 Source: OECD and FAO Secretariats.

Key issues and uncertainties The price projections presented in this Outlook reflect the usual assumptions of stability in weather as well as in economic and policy conditions. Actual price outcomes can nevertheless exhibit significant annual variations in their average trend in any one year. This is particularly pertinent for dairy markets which are traditionally very thin. Consequently, a small change in the supply/demand balance of milk may have a substantial impact on the volume and prices of traded dairy products. Not surprisingly, weather, economic conditions and the evolution in policies remain among the key factors influencing the dairy outlook. For example, a slowdown in global economic growth, compared to that assumed in this Outlook, would moderate international dairy prices. In addition, exchange rate developments could have an important influence as world dairy trade is typically denominated in US dollars, whereas the supplies of world exports depend mostly on the currencies of Oceania, Europe and South America. A severe drought in an important dairy-producing region could also have a critical impact on the Outlook, further strengthening the prices. The uncertainties mentioned above form an integral part of the dairy markets and they all played a role in the recent international dairy price spike. However, the issue for the forthcoming period relates to the likelihood of fundamentally changing variations in these factors. In other words, the ups and down in prices will always exist (see Figure 9.1), the question is whether the amplitude will change. It should be said, that although the recent international dairy price climb was indeed impressive, the market developments were quietly pointing in this direction. Dairy stocks have already been drained gradually over several years especially in the EU and the US. Then, food security fears and speculations in the face of extremely low global dairy stock levels ignited the dairy market fever. But, has the global market changed fundamentally? At the moment it is premature to judge, but, for example, the volume of traded commodity futures and options has recently risen sharply and financial investors and funds have been adding agricultural commodities into their investment portfolios. It could be expected that investment capital will exert more influence on commodity prices and play an increasingly

146

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

9.

DAIRY

important role for global commodity markets in coming years. The jury is still out whether these developments add to price volatility, but the possibility should not be excluded. If the future would be for increasing price volatility, dairy farming might have to resemble a dynamic business with increased risk exposure. The question for the Outlook then is how well farmers will be able to cope with these new conditions and what assistance in risk management will be provided to them. The weather related uncertainties, inseparable from the agricultural production process, present a major challenge in assessing risk and returns on investment into dairying. It follows that the adverse weather that recently plagued many important dairy producing regions represents perhaps the single most important factor for the Outlook. Could the latest spell of bad weather be considered accidental or was it a first sign of systematic changes linked to global warming altering the weather pattern around the world? Or, with the question posed in other terms: Is modern agriculture – overstraining land, overusing water – more prone to collapse and correspondingly less immune to normal weather fluctuation? Clearly, discussion on the subject of climate change and the potential of further production increases in the presence of water and other environmental limitations will intensify in the future. Higher milk prices may give rise to further research, which will likely provide avenues to increase output. Productivity gains stimulated by increased automation of the production process, improved feed efficiency, improved health and longevity of cattle and the ability to improve productivity via GM technology, could be some of the alternatives. Although technological change will be key for the dairy markets outlook, these advances will be weighed against the increased awareness of animal welfare, threat of pollution and environmental degradation from livestock production. In many of the more developed regions, there is an increasing emphasis on the negative side effects of animal production. Livestock production currently contributes 18% to the global warming effect. It produces about 9% of total carbon dioxide (CO2) emission, 37% of methane and 65% of nitrous oxide. The situation is likely to worsen in the future as production gradually becomes more intensive (crop based). Moreover, livestock is among the largest sources of water pollution, mainly coming from animal wastes, antibiotics and hormones, fertilisers for feed crops and sediments from eroded pasture (FAO 2006). It can be expected that environmental and other civil society concerns will be increasingly translated into more demanding private standards by the retail sector (carbon footprint, animal welfare) and in changes in government legislations (e.g. regulations of greenhouse gas emissions, stringent nitrate directives and manure management regulations) (OECD 2004). In conclusion, future responses by countries to high prices remain conditioned by extensive policy intervention and by internal food security concerns, but also increasingly by environmental constraints linked to high livestock populations, water availability and competition for pasture land. Increasingly, higher production response in many countries will come from higher yields as opposed to larger cattle numbers. Moreover, supply response will depend on the extent to which international product prices are being transmitted to local markets. A key issue for the dairy outlook is the ability of the industry to balance the market for perishable milk in the presence of greater price volatility and low global stock levels of dairy products.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

147

9. DAIRY

References FAO (2006), Livestock’s long shadow, FAO, Rome. OECD (2004), Agriculture, Trade and the Environment: The Dairy Sector, OECD Committee for Agriculture, Paris.

148

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ISBN 978-92-64-04590-3 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 © OECD/FAO 2008

Methodology

149

METHODOLOGY

T

his section provides information on the methodological aspects of the generation of the present Agricultural Outlook. It discusses the main aspects in the following order: First, a general description of the agricultural baseline projections and the Outlook report is given. Second, the compilation of a consistent set of the assumptions on macroeconomic projections is discussed in more detail. A third part presents an important model element that has been improved for this Outlook, i.e., the representation of production costs in the model’s supply equations.

The generation of the OECD-FAO Agricultural Outlook The projections presented and analysed in this document are the result of a process that brings together information from a large number of sources. The use of a model jointly developed by the OECD and FAO Secretariats, based on the OECD’s Aglink model and extended by FAO’s Cosimo model, facilitates consistency in this process. A large amount of expert judgement, however, is applied at various stages of the Outlook process. The Agricultural Outlook presents a single, unified assessment, judged by the OECD and FAO Secretariats to be plausible given the underlying assumptions, the procedure of information exchange outlined below and the information to which they had access. The starting point of the Outlook process is the reply by OECD countries (and some nonmember economies) to an annual questionnaire. Through these questionnaires, the OECD Secretariat obtains information from these countries on future commodity market developments and on the evolution of their agricultural policies. This information is supplemented by the FAO Secretariat for its members which are not part of the OECD. External sources, such as the World Bank and the UN, are also used to complete the view of the main economic forces determining market developments. This part of the process is aimed at creating a first insight into possible market developments and at establishing the key assumptions which condition the Outlook. The main economic and policy assumptions are summarised in the Macroeconomic and policy assumptions chapter and in specific commodity tables of the present report. The main macroeconomic variables assumed for the Outlook period are based on the December 2007 medium term projections of the OECD’s Economics Department for OECD countries, and on the Global Economic Prospects 2008 of the World Bank for other countries. While sometimes different from the macroeconomic assumptions provided through the questionnaire replies, it has been judged preferable to use just two consistent sources for these variables. The sources and assumptions for the macroeconomic projections are discussed in more detail further below. As a next step, the modelling framework jointly developed by the OECD and FAO Secretariats is used to facilitate a consistent integration of this information and to derive an initial set of global market projections (baseline). In addition to quantities produced, consumed and traded, the baseline also includes projections for nominal prices (in local currency units) for the commodities concerned. Unless otherwise stated, prices referred to in the text are also in nominal terms. The data series for the projections is drawn from

150

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

METHODOLOGY

OECD and FAO databases. For the most part information in these databases has been taken from national statistical sources. For further details on particular series, enquiries should be directed to the OECD and FAO Secretariats. The model provides a comprehensive dynamic economic and policy-specific representation of major world producing and trading countries for the main temperate-zone commodities as well as rice and vegetable oils. The World Sugar Model, formerly a standalone model separate from Aglink, was revised during the year and fully integrated into the Aglink-Cosimo modelling system. From the integrated model, a set of long-term baseline projections for world and OECD sugar markets, covering raw and white (or refined) sugar was developed. In addition, comprehensive and fully integrated biofuel models have been developed for several OECD member countries as well as for a range of developing countries.* The Aglink and Cosimo country and regional modules are all developed by the OECD and FAO Secretariats in conjunction with country experts and, in some cases, with assistance from other national administrations. The initial baseline results are compared with those obtained from the questionnaire replies and issues arising are discussed in bilateral exchanges with country experts. On the basis of these discussions and of updated information, a second baseline is produced. The information generated is used to prepare market assessments for cereals, oilseeds, meats, dairy products and sugar over the course of the outlook period, which are discussed at the annual meetings of the Working Group on Meat and Dairy Products and the Working Group on Cereals, Animal Feeds and Sugar of the OECD Committee for Agriculture. Following the receipt of comments and final data revisions, a last revision is made to the baseline projections. The revised projections form the basis of a draft of the present Agricultural Outlook publication, which is discussed by the Working Party on Agricultural Policies and Markets of the Committee for Agriculture, in May 2008, prior to publication. In addition, the Outlook will be used as a basis for analysis presented to the FAO’s Committee on Commodity Problems and its various Intergovernmental Commodity Groups. The Outlook process implies that the baseline projections presented in this report are conditioned by those developed by OECD countries and other participating economies. It also reconciles inconsistencies between individual country projections through the use of a formal modelling framework. The review process ensures that judgement of country experts is brought to bear on the projections and related analyses. However, the final responsibility for the projections and their interpretation rests with the OECD and FAO Secretariats.

Sources and assumptions for the macroeconomic projections Population estimates from the 2006 Revision of the United Nations Population Prospects database provide the population data used for all countries and regional aggregates in the Outlook. For the projection period, the medium variant set of estimates was selected for use from the four alternative projection variants (low, medium, high and constant fertility). The UN Population Prospects database was chosen because it represents a comprehensive source of reliable estimates which includes data for non-OECD developing countries. For consistency reasons, the same source is used for both the historical population estimates and the projection data.

* For details on the modeling of biofuels in Aglink-Cosimo and a detailed analysis of the market impacts of biofuel policies, see OECD/IEA Economic Assessment of Biofuel Support Policies (forthcoming).

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

151

METHODOLOGY

The other macroeconomic series used in the Aglink-Cosimo model are real GDP, the GDP deflator, the private consumption expenditure (PCE) deflator, the Brent crude oil price (in US dollars per barrel) and exchange rates expressed as the local currency value of 1 US dollar. Historical data for these series in OECD countries are consistent with those published in the OECD Economic Outlook No. 82, December 2007 and in the OECD Main Economic Indicators. Assumptions made about the future paths of all these variables apart from exchange rates, are based on the recent (November 2007) medium-term macroeconomic projections of the OECD Economics Department and extended from 2014 by holding the 2013 to 2014 annual growth rate constant for the remaining years to 2017. Exchange rates for OECD countries were extended to 2017 from the 2008 projections using the simple assumption of constant rates in real terms. For non-member economies, historical and projection data for these macroeconomic series were obtained from the World Bank 2008 Global Economic Prospects of November 2007. The model uses indices for real GDP, consumer prices (PCE deflator) and producer prices (GDP deflator) which are constructed with the base year 2000 value being equal to 1. The assumption of constant real exchange rates implies that a country with higher (lower) inflation relative to the United States (as measured by the US GDP deflator) will have a depreciating (appreciating) currency and therefore an increasing (decreasing) exchange rate over the projection period, since the exchange rate is measured as the local currency value of 1 US dollar. The world oil price assumption underlying this year’s agricultural outlook is based on that published in the OECD Economic Outlook No. 82 (December 2007).

The representation of production costs in Aglink-Cosimo Changes in production costs are an important variable for farmers’ decisions on crop and livestock production quantities, in addition to output returns and, if applicable, policy measures. While supply in Aglink-Cosimo is largely determined by gross returns, production costs are represented in the model in the form of a cost index used to deflate gross production revenues. In other words, supply equations in the model in most cases depend on gross returns per unit of activity (such as returns per hectare or the meat price) relative to the overall production cost level as expressed by the index. Consequently, equations for harvested areas in crop production and for livestock production quantities take the following general forms:

⎛ RH ⎞ ⎛ PP ⎞ AH = f ⎜ ⎟ ⎟ ; QP = f ⎜ CPCI ⎝ CPCI ⎠ ⎝ ⎠ with: AH area harvested (crop production); RH returns per hectare (crop production); CPCI commodity production cost index; QP production quantity (livestock production); PP producer price (livestock production). Among others, energy prices, increased by rising crude oil prices, have fostered attention to agricultural production costs in agricultural commodity models. Energy prices can significantly impact on international markets for agricultural products as production costs for both crops and livestock products are highly dependent on energy costs. Fuels for tractors and other machinery, as well as heating and other forms of energy are directly used in the production process. In addition, other inputs such as fertilisers and pesticides, have a high energy content, and costs for these inputs are driven to a significant extent by

152

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

METHODOLOGY

energy prices. It is therefore important to explicitly consider energy prices in the representation of production costs. The production cost indices employed in Aglink-Cosimo – one each for crops and for livestock products, respectively, to account for the different shares of input groups in total production costs – is constructed from three sub-indices representing non-tradable inputs, energy inputs, and other tradable inputs, respectively. While the non-tradable sub-index is approximated by the domestic GDP deflator, the energy sub-index is affected by changes in the world crude oil price and the country’s exchange rate. Finally, the tradable sub-index is linked to global inflation (approximated by the US GDP deflator) and the country’s exchange rate. This relationship is shown in the following equation: ,I CPCI rI,t = CPCS rNT * GDPDr ,t ,t

(

OIL bas

NT , I r ,t

r ,t

(

+ 1− CPCS

with: CPCII CPCSNT,I

) (XP ) * XR

,I + CPCS rEN * XPt OIL * XRr ,t ,t

− CPCS

EN , I r ,t

* XRr ,bas

)

XRr ,bas * GDPDUSA,t

commodity production cost index for commodity group I share of non-tradable input in total base commodity production costs for commodity group I

CPCSEN,I share of energy in total base commodity production costs for commodity group I GDPD

deflator for the gross domestic product

XPOIL

world crude oil price

XR

nominal exchange rate with respect to the US Dollar

I

commodity group (crops, livestock products)

r,t

region and time index, respectively

bas

base year (2000) value

Detailed data on the composition of production costs are available for Argentina, New Zealand and the United States. These data, available from the Secretariat on request, suggest non-tradable and energy shares in crop production costs as shown in the table below. Given that detailed data on other countries are not available, the respective crop production cost shares for Argentina are applied for all non-OECD countries, those for New Zealand are applied also for Australia, and the shares found for the US are applied for all other OECD countries/regions. As no data on livestock production shares are available for Argentina, the shares found for the US are applied to all countries/regions with the exception of New Zealand and Australia.

Production cost shares for: Crop production

Livestock production

Argentina

New Zealand

United States

Non-tradable

47%

66%

67%

Energy

43%

27%

25%

Other tradable

10%

7%

8%

Applied for:

All non-OECD countries/regions

New Zealand, Australia

All other OECD countries/regions

Non-tradable

n.a.

77%

97%

Energy

n.a.

23%

3%

Other tradable1

n.a.

1%

0%

–-

New Zealand, Australia

All other countries/regions

Applied for: 1. Excludes tradable feed.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

153

METHODOLOGY

Methodology and limitations of partial stochastic analysis In the context of the 2008 OECD-FAO Agricultural Outlook, partial stochastic simulations based on yields and macroeconomic variables have been undertaken. The assumptions of normal weather and stable macroeconomic environment are replaced by a range of yield results and macroeconomic variables constructed according to the procedure presented below.

Limitations of partial stochastic analysis The results of multiple simulations are multiple outcomes for each market variable in each year. The aim of carrying such an analysis is to widen the range of relevance of Outlook results. It is of particular interest for studying markets where agricultural policies in place may have asymmetric effects. It is also useful when trying to identify at least partially the uncertainties embedded in the deterministic point projections. The analysis presented in the report takes into account the uncertainties around macroeconomic and weather assumptions and their consequences on the evolution of agricultural commodity markets in the coming decade. The evolution of markets in the future is likely to differ from the deterministic scenario because of unexpected developments or shocks in the underlying assumptions. Partial stochastic projections aim to take into account more possibilities of evolution but obviously do not imply that one of the stochastic scenarios will be the “real” one. There are serious limitations to partial stochastic analysis that need to be well understood when looking at the results. Indeed partial stochastic analysis has only a partial coverage of uncertainties; it focuses on exogenous uncertainties linked to climate and macroeconomic evolution. There are several other sources of uncertainty in the benchmark projections. In particular, there is an empirical uncertainty on the estimation of the parameters used in the agricultural commodity model jointly developed by the OECD and the FAO and an endogenous uncertainty on the functioning of agricultural markets. Despite these limitations, the information that partial stochastic analysis brings is of interest for better assessing the evolution of agricultural commodity markets than just looking at a deterministic baseline.

Procedure used to conduct partial stochastic simulations: simulations of yields The deterministic benchmark projections presented in the 2008 Agricultural Outlook are based on a “normal” weather assumption, i.e. no shock in crop yield due to weather shocks is taken into account and no assumption is made on possible climate change (i.e. variation from average weather). For the partial stochastic analysis, 350 different sets of crop yields for all crop and all countries studied in the Agricultural Outlook over the coming ten years have been simulated. For each crop, a random deviation from the deterministic baseline is generated for every year of projections and for every simulation. This random deviation takes into account long term trends in yields for the different crops and historical deviations from long term trends. This implies that for every crop, a random distribution of 350 sets of medium term projections of its associated yield is obtained. In a given year, the average yield value is equal to the yield value in the deterministic baseline and its random deviation corresponds to historical random deviations from long term yields.

154

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

METHODOLOGY

Procedure used to conduct partial stochastic simulations: simulations of macroeconomic variables The deterministic benchmark projections in the 2008 Agricultural Outlook are based on an assumption of a stable macroeconomic environment assumption. In the partial stochastic analysis conducted on the 2008 Outlook numbers, 350 different sets of correlated macroeconomic projections for the world oil price, exchanges rates, GDP and price indices for OECD and non-OECD economies are generated. The 350 different sets of macroeconomic variables projections are obtained thanks to the use of a simple macroeconomic model. This simple macroeconomic model explains econometrically macroeconomic variables in function of their past values and/or of the past or actual values of other macroeconomic variables in the given country or in other major economies. This model is calibrated on historical data. The macroeconomic projections are the combination of the outcomes of the calibrated model and random draws of historical deviations from the calibrated model.

Procedure used to conduct partial stochastic simulations: stochastic outcomes The 350 sets of medium term projections for yield and macroeconomic variables are put together to create 350 sets of assumptions that are taken as input to the joint OECDFAO modelling system Aglink-Cosimo. This results in 350 resolutions of the model to get 350 sets of medium-term projections. The process of getting the stochastic outcomes is summarised by the following table.

Procedure used to conduct partial stochastic analysis Yields

Macroeconomic variable

1/ Identify long term trend 2/ Define historical errors 3/ 350 draws based on errors and trend 4/ Input as shocks to the model

1/ Construction of a simple macroeconomic model 2/ 350 draws based on historical errors 3/ Input errors into the macroeconomic model 4/ Input macroeconomic variables into the model

350 resolutions of the model to get 350 sets of medium term projections

Interesting lessons can be drawn from partial stochastic analysis when looking at the distributions of medium term projections and at the relation between these distributions and assumptions on yields or macroeconomic variables evolution.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

155

ISBN 978-92-64-04590-3 OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 © OECD/FAO 2008

ANNEX A

Statistical Tables

157

ANNEX A

Table A.1. Economic assumptions Calendar yeara

Average 2002-06

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

REAL GDPb Australia

%

3.2

4.3

3.5

3.0

3.2

3.2

3.1

3.0

2.8

2.8

2.8

2.8

Canada

%

2.7

2.6

2.4

2.7

2.7

2.2

2.1

2.2

2.1

2.1

2.1

2.1

EU15

%

1.6

2.6

1.9

2.0

2.0

1.9

1.8

1.8

1.8

1.8

1.8

1.8

Japan

%

1.7

1.9

1.6

1.8

1.5

1.2

1.2

1.2

1.2

1.2

1.2

1.2

Korea

%

4.8

4.9

5.2

5.1

4.7

4.2

4.0

3.9

3.9

3.9

3.9

3.9

Mexico

%

2.8

3.0

3.6

4.3

4.2

4.0

4.0

4.0

4.0

4.0

4.0

4.0

New Zealand

%

3.5

3.4

1.9

2.1

2.2

2.2

2.2

2.2

2.2

2.2

2.2

2.2

Norway

%

2.4

3.4

3.6

2.4

1.7

1.7

2.0

2.1

2.0

2.0

2.0

2.0

Switzerland

%

1.7

2.7

2.0

2.0

1.7

1.4

1.4

1.4

1.5

1.5

1.5

1.5

Turkey

%

7.2

5.1

5.4

5.7

5.5

5.5

5.5

5.5

5.5

5.5

5.5

5.5

United States

%

2.7

2.2

2.0

2.2

2.7

2.6

2.4

2.4

2.4

2.4

2.4

2.4

Argentina

%

4.9

7.8

5.7

4.7

3.4

3.2

3.1

3.0

2.9

2.9

2.9

2.8

Brazil

%

2.8

4.8

4.5

4.5

3.9

3.6

3.6

3.6

3.5

3.5

3.4

3.5

China

%

10.1

11.3

10.8

10.5

8.2

8.2

8.2

8.2

8.2

8.2

8.2

8.2

India

%

7.7

7.7

7.2

6.9

6.7

6.4

6.1

5.9

5.6

5.3

5.3

5.3

Russia

%

6.5

7.5

6.5

6.0

5.4

5.4

5.4

5.4

5.4

5.4

5.4

5.4

South Africa

%

4.4

5.0

5.1

5.3

5.2

5.2

5.2

5.2

5.2

5.2

5.2

5.2

OECDc, d

%

2.3

2.5

2.2

2.3

2.4

2.3

2.2

2.2

2.2

2.2

2.2

2.2

Australia

%

2.1

2.5

2.9

2.5

2.5

2.5

2.5

2.5

2.5

2.5

2.5

2.5

Canada

%

2.7

1.6

1.4

1.7

1.9

2.0

2.0

2.0

2.0

2.0

2.0

2.0

EU15

%

2.1

1.9

2.4

2.1

1.9

1.8

1.8

1.8

1.8

1.8

1.8

1.8

Japan

%

–0.8

–0.5

0.1

0.3

0.5

0.6

0.9

1.0

1.1

1.1

1.1

1.1

Korea

%

2.9

2.4

2.8

3.0

3.0

3.0

3.0

3.0

3.0

3.0

3.0

3.0

Mexico

%

5.1

3.7

3.7

3.4

3.2

3.2

3.2

3.2

3.2

3.2

3.2

3.2

New Zealand

%

1.6

1.6

2.2

2.0

2.0

2.1

2.1

2.1

2.1

2.1

2.1

2.1

Norway

%

1.6

0.5

2.5

2.1

2.1

2.0

2.0

2.0

2.0

2.0

2.0

2.0

Switzerland

%

0.9

0.9

1.5

1.4

1.0

0.8

0.8

0.8

0.8

0.8

0.8

0.8

Turkey

%

17.4

8.5

6.5

4.5

7.5

7.5

7.5

7.5

7.5

7.5

7.5

7.5

United States

%

2.4

2.5

2.4

1.7

1.9

1.9

1.9

1.9

1.9

1.9

1.9

1.9

Argentina

%

12.7

8.6

11.1

11.3

4.7

4.8

4.7

4.6

4.6

4.6

4.5

4.5

Brazil

%

7.7

4.0

4.1

4.2

3.7

4.4

4.4

4.4

4.4

4.4

4.4

4.4

China

%

1.8

4.6

3.9

3.0

2.6

2.8

2.9

3.1

3.1

3.0

2.9

3.0

India

%

4.1

6.2

5.5

4.5

5.8

5.8

5.8

5.8

5.8

5.8

5.8

5.8

Russia

%

6.5

10.4

8.9

7.6

5.5

5.2

4.9

4.7

4.4

4.2

4.0

3.8

South Africa

%

4.4

5.9

5.7

5.2

5.4

5.4

5.4

5.4

5.4

5.4

5.4

5.4

OECDc, d

%

2.4

2.2

2.4

2.0

2.1

2.2

2.2

2.2

2.3

2.3

2.3

2.3

PCE

DEFLATORb

For notes, see end of the table.

158

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.1. Economic assumptions (cont.) 2007 est. (million)

Calendar yeara

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

POPULATION Australia

%

20.6

1.04

1.00

0.97

0.97

0.97

0.96

0.95

0.94

0.93

0.92

Canada

%

32.6

0.92

0.90

0.88

0.87

0.86

0.85

0.84

0.83

0.82

0.80

EU27

%

491.7

0.22

0.18

0.16

0.14

0.13

0.11

0.09

0.08

0.07

0.05

Japan

%

127.8

0.01

–0.02

–0.05

–0.09

–0.12

–0.15

–0.18

–0.21

–0.24

–0.28

Korea

%

48.3

0.36

0.34

0.31

0.28

0.24

0.21

0.18

0.15

0.13

0.09

Mexico

%

102.9

1.13

1.19

1.18

1.12

1.06

1.01

0.96

0.93

0.90

0.88

New Zealand

%

4.1

0.94

0.86

0.83

0.82

0.82

0.81

0.78

0.77

0.77

0.72

Norway

%

4.7

0.62

0.62

0.61

0.61

0.63

0.60

0.60

0.59

0.61

0.59

Switzerland

%

7.5

0.39

0.37

0.37

0.36

0.37

0.34

0.34

0.35

0.34

0.35

Turkey

%

73.9

1.29

1.27

1.24

1.21

1.18

1.14

1.11

1.08

1.04

1.01

United States

%

299.4

0.99

0.97

0.96

0.94

0.93

0.91

0.89

0.88

0.86

0.85

Argentina

%

39.1

0.90

0.89

0.88

0.96

0.94

0.93

0.92

0.90

0.88

0.88

Brazil

%

188.6

1.14

1.12

1.10

1.29

1.25

1.22

1.18

1.14

1.11

1.07

China

%

1 324.1

0.63

0.62

0.62

0.64

0.67

0.69

0.69

0.68

0.66

0.63

India

%

1 151.8

1.50

1.47

1.44

1.41

1.38

1.35

1.32

1.28

1.25

1.22

Russia

%

142.5

–0.53

–0.53

–0.54

–0.46

–0.47

–0.47

–0.49

–0.50

–0.52

–0.53

South Africa

%

48.3

0.61

0.53

0.47

0.44

0.42

0.40

0.39

0.39

0.39

0.39

OECDc

%

1 213.5

0.57

0.55

0.53

0.51

0.49

0.47

0.45

0.44

0.42

0.40

World

%

6 607.1

1.19

1.18

1.16

1.6

1.5

1.14

1.13

1.11

1.09

1.07

Calendar yeara

Average 2002-06

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

EXCHANGE RATE Australia

AUD/USD

1.47

1.19

1.20

1.21

1.23

1.24

1.25

1.27

1.28

1.29

1.31

1.32

Canada

CAD/USD

1.32

1.07

1.07

1.07

1.08

1.08

1.09

1.09

1.10

1.11

1.11

1.12

European Union

EUR/USD

0.87

0.73

0.73

0.73

0.74

0.74

0.74

0.74

0.74

0.74

0.74

0.74

Japan

JPY/USD

115.0

117.4

114.7

112.8

111.2

109.6

108.3

107.0

105.9

104.8

103.6

102.5

Korea

'000 KRW/USD

1.11

0.93

0.92

0.91

0.92

0.92

0.93

0.94

0.94

0.95

0.96

0.97

Mexico

MXN/USD

10.70

10.95

11.15

11.30

11.45

11.57

11.70

11.82

11.94

12.07

12.19

12.32

New Zealand

NZD/USD

1.67

1.36

1.39

1.39

1.40

1.40

1.41

1.41

1.42

1.42

1.43

1.43

Argentina

ARS/USD

3.02

3.10

3.30

3.40

3.45

3.52

3.61

3.68

3.75

3.83

3.91

3.99

Brazil

BRL/USD

2.66

1.90

1.90

2.00

2.04

2.09

2.13

2.18

2.22

2.27

2.32

2.37

China

CNY/USD

8.20

7.57

7.20

6.84

6.53

6.43

6.35

6.30

6.26

6.23

6.20

6.18

India

INR/USD

45.74

41.50

40.00

39.50

41.78

44.19

46.75

49.45

52.30

55.33

58.52

61.90

Russia

RUR/USD

29.3

26.4

26.1

26.1

27.2

28.1

28.7

28.7

29.5

30.1

30.7

31.3

South Africa

ZAR/USD

7.54

7.22

7.17

7.33

7.72

8.14

8.58

9.05

9.54

10.06

10.60

11.18

42.30

72.30

90.00

90.00

91.10

92.80

94.60

96.40

98.20

100.10

102.00

104.00

WORLD OIL PRICE Brent crude oil price

USD/barrel

a) For OECD member countries, historical data for population, real GDP, private consumption expenditure deflator and exchange rate were obtained from the OECD Economic Outlook, No. 82, December 2007. For non-member economies, historical macroeconomic data were obtained from the World Bank, November 2007. Assumptions for the projection period draw on the recent medium term macroeconomic projections of the OECD Economics Department, projections of the World Bank, responses to a questionnaire sent to member country agricultural experts and for population, projections from the United Nations World Population Prospects Database, 2006 Revision (medium variant). Data for the European Union are for the euro area aggregates. b) Annual per cent change. The price index used is the private consumption expenditure deflator. c) Excludes Iceland. d) Annual weighted average real GDP and CPI growth rates in OECD countries are based on weights using 1995 GDP and purchasing power parities (PPPs). est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/383781634100

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

159

ANNEX A

Table A.2. World pricesa Average 02/0306/07

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

USD/t

167.8

318.6

267.0

233.6

225.9

229.7

231.0

231.2

230.2

230.9

231.6

230.6

USD/t

113.2

181.3

185.3

185.0

189.0

188.4

178.5

173.0

173.2

170.9

166.6

164.6

USD/t

262.3

361.0

390.6

367.9

330.7

326.7

337.2

340.3

335.6

333.8

332.5

334.5

USD/t

293.4

485.8

481.9

470.6

468.3

464.2

455.8

452.4

453.2

455.6

457.6

457.2

USD/t

219.5

365.7

348.2

331.5

328.4

321.6

308.4

302.6

303.4

304.0

305.8

307.0

USD/t

587.5

1 015.1

986.9

1 017.9

1 026.3

1 031.2

1 043.8

1 048.0

1 050.9

1 055.9

1 060.3

1 055.1

Price, raw sugarh

USD/t

237.1

229.3

216.0

228.0

257.6

280.4

304.5

298.0

307.1

309.6

308.2

301.7

Price, refined sugari

USD/t

291.2

289.1

268.1

280.8

317.8

351.8

374.5

371.3

384.9

385.0

383.4

379.1

Price, EUj

EUR/100 kg dw

256.5

276.0

275.3

279.2

281.2

282.9

285.9

288.8

295.0

300.4

303.2

305.9

Price, USAk

USD/100 kg dw

291.0

327.1

327.2

323.1

325.4

322.7

310.7

317.1

320.5

322.9

323.1

328.7

Price, Argentinal

USD/100 kg dw

120.7

151.7

143.3

142.3

138.6

138.1

136.2

138.1

143.1

144.5

147.9

147.5

Price, EUm

EUR/100 kg dw

131.3

130.6

148.5

149.6

149.8

147.7

150.8

149.7

147.5

150.5

148.4

151.6

Price, USAn

USD/100 kg dw

137.3

143.5

143.5

156.0

172.3

176.9

164.6

169.8

167.5

163.2

160.8

158.8

Price, Brazilo

USD/100 kg dw

78.0

109.4

147.7

153.6

151.4

145.7

148.2

150.2

149.9

149.0

151.1

153.0

Price, EUp

EUR/100 kg rtc

101.5

111.7

115.9

118.5

120.9

117.7

115.7

120.3

121.4

122.5

123.6

124.8

Price, USAq

USD/100 kg rtc

144.1

168.4

166.8

160.6

165.6

168.7

164.2

167.9

170.1

171.9

174.0

177.3

Price, Brazilr

USD/100 kg pw

95.1

143.8

156.0

137.7

137.4

140.1

140.3

143.4

146.2

148.1

149.7

152.8

NZD/100 kg dw

379.0

318.8

313.2

344.6

365.8

379.9

386.1

392.4

398.8

405.3

420.1

435.6

USD/100 kg

161.6

293.8

300.6

290.1

265.6

256.1

257.1

259.8

264.4

268.1

269.6

271.8

USD/100 kg

234.6

402.2

418.9

393.9

359.6

349.9

350.4

351.7

354.1

355.6

357.3

358.0

USD/100 kg

191.2

431.6

355.2

331.2

314.4

308.3

305.8

304.7

303.4

304.2

303.9

304.6

USD/100 kg

192.1

416.7

365.7

333.5

311.3

303.6

303.4

304.6

306.6

308.0

309.6

311.0

USD/100 kg

54.1

133.8

92.1

87.9

93.3

96.1

100.9

102.4

104.2

108.9

111.0

114.3

USD/100 kg

577.0

1 029.5

956.7

804.6

807.4

752.6

784.2

755.0

776.6

757.0

772.4

759.3

WHEAT Priceb COARSE GRAINS Pricec RICE Priced OILSEEDS Pricee OILSEED MEALS Pricef VEGETABLE OILS Priceg SUGAR

BEEF AND VEAL

PIG MEAT

POULTRY MEAT

SHEEP MEAT Price, New Zealands BUTTER Pricet CHEESE Priceu SKIM MILK POWDER Pricev WHOLE MILK POWDER Pricew WHEY POWDER Wholesale price, USAx CASEIN Pricey

For notes, see end of the table.

160

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.2. World pricesa (cont.) Average 02/0306/07

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

ETHANOL Pricez

USD/hl

31.4

42.0

53.0

55.6

54.0

53.7

53.6

52.9

52.8

52.7

52.0

51.3

USD/hl

83.8

94.7

98.6

105.2

105.8

103.4

104.2

104.8

105.3

106.3

106.3

105.5

BIODIESEL Priceaa

a) This table is a compilation of price information presented in the detailed commodity tables further in this annex. Prices for crops are on marketing year basis and those for meat and dairy products on calendar year basis (e.g. 07/08 is calendar year 2007). b) No. 2 hard red winter wheat, ordinary protein, USA f.o.b. Gulf Ports (June/May), less EEP payments where applicable. c) No. 2 yellow corn, US f.o.b. Gulf Ports (September/August). d) Milled, 100%, grade b, Nominal Price Quote, NPQ, f.o.b. Bangkok (August/July). e) Weighted average oilseed price, European port. f) Weighted average meal price, European port. g) Weighted average price of oilseed oils and palm oil, European port. h) Raw sugar world price, ICE Inc. No. 11, f.o.b. stowed Caribbean port (including Brazil), bulk spot price. i) Refined sugar price, London No. 5 , f.o.b. Europe, spot. j) Producer price. k) Choice steers, 1 100-1 300 lb lw, Nebraska – lw to dw conversion factor 0.63. l) Buenos Aires wholesale price linier, young bulls. m) Pig producer price n) Barrows and gilts, No. 1-3, 230-250 lb lw, Iowa/South Minnesota – lw to dw conversion factor 0.74. o) Producer price. p) Weighted average farm gate live chickens, first choice, lw to rtc conversion of 0.75, EU15 starting in 1995. q) Wholesale weighted average broiler price 12 cities. r) Weighted average wholesale price of differents cuts. s) Lamb schedule price, all grade average. t) f.o.b. export price, butter, 82% butterfat, Oceania. u) f.o.b. export price, cheddar cheese, 39% moisture, Oceania. v) f.o.b. export price, non-fat dry milk, 1.25% butterfat, Oceania. w) f.o.b. export price, WMP 26% butterfat, Oceania. x) Edible dry whey, Wisconsin, plant. y) Export price, New Zealand. z) Brazil, Sao Paulo (ex-distillery). aa) Central Europe FOB price net of biodiesel tariff. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/383803078767

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

161

ANNEX A

Table A.3. World trade projections Average 2002-06

IMPORTS Wheat

Coarse grains

Rice

Oilseeds

Oilseed meals

Vegetable oils

Sugar

Beefa

Pigmeata

Poultry

Butter

Cheese

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

World trade

kt 109 363 111 003 121 070 115 943 116 958 118 354 120 578 120 885 122 913 124 106 125 294 126 465

OECD

kt

24 907

25 144

26 484

24 906

24 424

24 152

24 818

24 698

24 853

Developing

kt

85 114

87 062

96 495

92 824

94 400

95 863

97 699

97 976

99 778 100 858 101 793 102 849

Least Developed Countries

kt

10 445

10 590

13 271

11 822

11 853

12 292

12 710

12 809

13 009

World trade

kt 105 924 119 616 111 697 111 197 111 423 112 858 114 921 116 832 119 567 122 072 125 101 126 943

OECD

kt

49 923

59 088

49 298

50 523

50 116

49 694

49 646

50 033

50 097

50 593

51 179

51 448

Developing

kt

73 297

76 900

79 529

78 276

78 858

80 639

83 000

84 940

87 352

90 165

92 497

94 151

Least Developed Countries

kt

2 553

2 057

2 287

2 506

2 655

2 885

3 156

3 409

3 692

3 715

4 025

4 277

World trade

kt

29 641

31 245

30 844

31 901

32 486

33 422

34 414

35 167

36 090

36 791

37 485

38 082

OECD

kt

4 242

4 436

4 463

4 510

4 793

4 812

4 861

4 954

5 116

5 252

5 421

5 475

Developing

kt

25 171

26 568

26 014

27 091

27 371

28 225

29 152

29 829

30 655

31 273

31 874

32 440

Least Developed Countries

kt

6 279

7 051

7 516

8 319

8 201

8 083

8 170

8 552

8 770

9 055

9 199

9 374

World trade

kt

71 937

83 620

80 052

82 152

83 945

85 127

86 578

88 186

90 512

92 514

94 802

97 488

OECD

kt

33 788

34 199

30 982

30 855

31 084

30 188

29 397

29 141

29 427

29 751

30 261

31 280

Developing

kt

45 609

57 178

56 601

59 084

60 808

62 997

65 395

67 367

69 555

71 317

73 205

74 999

Least Developed Countries

kt

238

270

261

264

277

295

310

323

337

352

368

383

World trade

kt

52 056

61 773

64 787

66 941

69 238

70 192

71 501

72 734

73 614

74 249

74 866

75 329

OECD

kt

32 007

35 142

36 685

37 228

37 263

37 179

37 222

37 299

37 081

36 586

36 054

35 181

Developing

kt

20 873

27 347

29 091

30 619

32 902

34 061

35 422

36 535

37 680

38 993

40 142

41 555

Least Developed Countries

kt

271

408

444

494

510

535

567

604

626

642

659

678

World trade

kt

38 655

45 805

48 889

50 596

52 408

54 340

56 270

58 012

59 616

61 029

62 238

63 175

OECD

kt

9 275

11 883

14 075

15 495

16 874

17 547

18 434

19 290

19 831

20 480

20 833

21 141

Developing

kt

29 182

33 768

34 623

34 755

35 136

36 349

37 333

38 176

39 182

39 902

40 706

41 290

Least Developed Countries

kt

3 316

3 875

4 001

4 118

4 264

4 413

4 563

4 721

4 883

5 049

5 213

5 390

World trade

kt

46 908

44 096

48 656

50 624

51 560

51 916

52 588

53 901

54 780

56 260

57 842

59 657

OECD

kt

11 261

10 130

10 911

11 764

12 120

12 481

12 631

12 845

13 023

13 239

13 495

13 768

Developing

kt

30 732

30 589

33 960

35 257

36 108

36 484

37 220

38 500

39 438

41 002

42 633

44 405

Least Developed Countries

kt

3 513

3 702

3 821

4 045

4 247

4 409

4 430

4 657

4 705

4 872

5 040

5 283

World trade

kt

6 232

7 071

7 675

7 594

7 789

8 075

8 442

8 707

9 033

9 250

9 529

9 787

OECD

kt

3 536

3 478

3 692

3 853

3 930

4 052

4 216

4 317

4 407

4 444

4 441

4 509

Developing

kt

2 393

2 977

3 313

3 223

3 328

3 489

3 649

3 770

3 996

4 118

4 323

4 497

Least Developed Countries

kt

102

135

219

188

201

214

232

249

263

277

294

305

World trade

kt

4 263

4 798

5 184

5 408

5 507

5 615

5 757

5 909

6 065

6 208

6 410

6 601

OECD

kt

2 407

2 544

2 608

2 712

2 832

2 922

3 000

3 069

3 136

3 190

3 282

3 368

Developing

kt

1 464

1 818

2 060

2 295

2 305

2 290

2 367

2 442

2 541

2 630

2 764

2 883

Least Developed Countries

kt

44

57

70

71

82

95

101

112

121

132

139

153

World trade

kt

7 635

8 568

8 827

9 277

9 682

9 778

9 977

10 258

10 409

10 544

10 831

11 102

OECD

kt

2 021

2 150

2 326

2 205

2 416

2 277

2 336

2 427

2 442

2 387

2 391

2 377

Developing

kt

4 248

4 906

5 131

5 537

5 835

5 968

6 150

6 393

6 509

6 652

6 949

7 238

Least Developed Countries

kt

420

453

479

542

571

587

596

593

594

617

632

652

World trade

kt

738

735

745

761

778

800

817

835

856

875

897

916

OECD

kt

144

144

138

137

138

139

138

137

136

134

133

133

Developing

kt

436

458

443

457

471

482

490

500

512

522

534

544

Least Developed Countries

kt

12

14

14

20

21

22

24

26

29

31

33

35

World trade

kt

1 418

1 564

1 623

1 680

1 732

1 799

1 854

1 902

1 949

1 995

2 046

2 113

OECD

kt

754

778

792

809

833

857

881

903

925

948

971

994

Developing

kt

567

618

626

656

693

721

742

770

795

824

851

896

Least Developed Countries

kt

17

20

14

24

31

28

29

34

35

37

37

40

kt

1 382

1 400

1 625

1 661

1 723

1 785

1 856

1 924

1 984

2 049

2 126

2 197

Whole milk powder World trade

24 913 13 173

25 070 13 369

25 127 13 605

OECD

kt

85

76

77

78

78

78

78

78

78

78

78

79

Developing

kt

1 312

1 331

1 545

1 583

1 645

1 706

1 779

1 847

1 908

1 973

2 038

2 107

Least Developed Countries

kt

124

139

153

164

176

187

197

208

220

232

245

259

For notes, see end of the table.

162

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.3. World trade projections (cont.) Average 2002-06

IMPORTS Skim milk powder

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

World trade

kt

1 220

1 207

1 192

1 217

1 236

1 270

1 319

1 367

1 418

1 463

1 510

OECD

kt

211

210

213

216

209

212

216

219

220

224

227

1 549 230

Developing

kt

1 081

1 052

1 038

1 064

1 092

1 125

1 172

1 219

1 266

1 311

1 357

1 395

Least Developed Countries

kt

56

32

32

33

35

37

39

41

43

45

47

49

For notes, see end of the table.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

163

ANNEX A

Table A.3. world trade projections (cont.) Average 2002-06

EXPORTS Wheat

Coarse grains

Rice

Oilseed meals

Vegetable oils

Pigmeata

Poultry

Butter

Cheese

2010

2011

2012

2013

2014

2015

2016

2017

kt kt

71 994

64 315

81 900

75 891

75 752

76 396

77 232

75 394

75 600

74 946

74 731

74 776

Developing

kt

19 101

18 735

19 856

18 486

18 860

18 866

19 895

20 738

21 288

21 799

22 419

22 663

Least Developed Countries kt

145

88

71

55

56

56

57

57

58

58

59

109 363 111 003 121 070 115 943 116 958 118 354 120 578 120 885 122 913 124 106 125 294 126 465

59

World trade

kt

OECD

kt

72 984

86 515

76 856

72 763

72 300

73 485

76 506

77 500

79 184

81 871

84 160

84 694

Developing

kt

28 286

32 390

29 258

29 547

27 888

27 932

27 850

29 240

29 845

30 025

30 368

31 359

Least Developed Countries kt

2 007

3 547

3 591

3 656

4 119

4 035

3 739

3 712

3 628

3 152

3 059

105 924 119 616 111 697 111 197 111 423 112 858 114 921 116 832 119 567 122 072 125 101 126 943

3 084

29 641

31 245

30 844

31 901

32 486

33 422

34 414

35 167

36 090

36 791

37 485

38 082

World trade

kt

OECD

kt

3 991

3 814

3 647

4 204

4 340

4 115

4 238

4 437

4 607

4 712

4 800

4 905

Developing

kt

24 544

26 540

27 167

27 676

28 124

29 284

30 153

30 707

31 459

32 055

32 660

33 152

537

1 652

1 825

1 336

1 432

1 768

2 188

2 023

2 210

2 255

2 439

2 213

World trade

kt

71 937

83 620

80 052

82 152

83 945

85 127

86 578

88 186

90 512

92 514

94 802

97 488

OECD

kt

35 321

35 086

35 024

32 612

32 586

31 097

29 875

29 789

30 089

30 347

30 356

30 479

Developing

kt

33 134

41 996

42 741

46 122

47 386

49 826

52 277

53 959

55 708

57 372

59 433

61 682

Least Developed Countries kt

18

18

34

29

28

27

25

23

21

20

19

18

52 056

61 773

64 787

66 941

69 238

70 192

71 501

72 734

73 614

74 249

74 866

75 329

World trade

kt

OECD

kt

8 795

10 656

9 842

11 348

12 375

12 660

13 174

13 343

13 302

13 090

12 931

12 567

Developing

kt

45 705

50 494

52 415

52 999

54 120

54 784

55 716

56 601

57 504

58 335

59 039

59 833

Least Developed Countries kt

18

19

19

19

19

20

20

20

20

20

21

21

38 655

45 805

48 889

50 596

52 408

54 340

56 270

58 012

59 616

61 029

62 238

63 175

World trade

kt

OECD

kt

2 579

2 631

2 308

2 459

2 696

2 897

3 220

3 459

3 607

3 642

3 735

3 718

Developing

kt

35 859

42 512

44 085

45 549

46 984

48 545

50 008

51 352

52 702

53 928

54 921

55 741

81

96

89

90

91

93

94

95

96

97

98

99

World trade

kt

48 322

49 287

48 656

50 624

51 560

51 916

52 588

53 901

54 780

56 260

57 842

59 657

OECD

kt

10 299

5 735

5 813

6 340

6 639

7 005

7 160

7 534

7 683

7 752

7 854

7 845

Developing

kt

36 247

41 731

41 193

42 836

43 625

44 029

44 611

45 619

46 209

47 563

49 079

50 873

Least Developed Countries kt Beefa

2009

OECD

Least Developed Countries kt Sugar

2008

World trade

Least Developed Countries kt Oilseeds

2007 est.

566

688

708

810

847

851

861

877

912

934

969

1 011

World trade

kt

6 232

7 071

7 675

7 594

7 789

8 075

8 442

8 707

9 033

9 250

9 529

9 787

OECD

kt

3 427

3 291

3 300

3 212

3 216

3 298

3 436

3 508

3 607

3 631

3 644

3 714

Developing

kt

3 286

4 136

4 284

4 452

4 657

4 899

5 189

5 394

5 634

5 848

6 167

6 384

Least Developed Countries kt

2

2

3

3

11

3

3

3

3

3

3

3

World trade

kt

4 263

4 798

5 184

5 408

5 507

5 615

5 757

5 909

6 065

6 208

6 410

6 601

OECD

kt

3 468

3 854

3 979

4 160

4 247

4 273

4 312

4 402

4 486

4 551

4 684

4 789

Developing

kt

1 225

1 380

1 461

1 575

1 601

1 680

1 779

1 843

1 918

2 000

2 075

2 154

Least Developed Countries kt

0

0

4

1

2

1

1

1

1

2

2

2

World trade

kt

7 635

8 568

8 827

9 277

9 682

9 778

9 977

10 258

10 409

10 544

10 831

11 102

OECD

kt

3 716

3 877

3 961

3 962

4 123

4 113

4 231

4 340

4 325

4 301

4 341

4 355

Developing

kt

4 094

4 974

4 822

5 272

5 513

5 617

5 696

5 868

6 035

6 192

6 439

6 695

Least Developed Countries kt

7

11

10

10

10

10

11

11

12

12

13

13

World trade

kt

738

735

745

761

778

800

817

835

856

875

897

916

OECD

kt

749

616

537

545

560

573

582

586

599

608

617

627

Developing

kt

66

104

113

121

124

132

140

147

156

165

172

180

Least Developed Countries kt

1

1

3

1

1

1

1

1

1

1

1

1

World trade

kt

1 418

1 564

1 623

1 680

1 732

1 799

1 854

1 902

1 949

1 995

2 046

2 113

OECD

kt

1 194

1 232

1 213

1 245

1 267

1 288

1 302

1 311

1 308

1 311

1 313

1 320

Developing

kt

176

234

289

281

296

315

345

376

413

450

486

527

Least Developed Countries kt

0

0

0

0

0

0

1

0

0

0

0

0

kt

1 382

1 400

1 625

1 661

1 723

1 785

1 856

1 924

1 984

2 049

2 126

2 197

OECD

kt

1 231

1 140

1 043

1 056

1 093

1 107

1 134

1 154

1 166

1 184

1 200

1 219

Developing

kt

442

449

545

571

597

644

690

736

783

830

879

929

Least Developed Countries kt

3

4

4

5

5

6

7

7

8

8

9

9

Whole milk powder World trade

For notes, see end of the table.

164

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.3. world trade projections (cont.) Average 2002-06

EXPORTS Skim milk powder

Biofuelb

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

World trade

kt

1 220

1 207

1 192

1 217

1 236

1 270

1 319

1 367

1 418

1 463

1 510

1 549

OECD

kt

951

907

881

851

848

860

880

898

930

968

1 015

1 053

Developing

kt

121

108

140

171

191

202

212

222

231

245

257

269

Least Developed Countries kt

2

1

1

1

1

1

1

1

1

1

1

1

Ethanol world trade

mn l

6 363

4 752

4 613

5 998

6 237

5 175

5 478

6 366

7 065

7 831

8 842

10 384

Biodiesel world trade

mn l

563

1 554

1 790

2 360

2 491

2 296

2 104

2 011

1 999

2 034

2 115

2 187

a) Excludes trade of live animals. b) Sum of all positive net trade positions. est.: estimate. Source: OECD and FAO Secretariats.

1 2 http://dx.doi.org/10.1787/383803202427

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

165

ANNEX A

Table A.4. Main policy assumptions for cereal markets Average 02/0306/07

Crop yeara

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

ARGENTINA Crops export tax

%

20

20

27

27

27

27

27

27

27

27

27

27

Rice export tax

%

10

10

10

10

10

10

10

10

10

10

10

10

CANADA Tariff-quotasb Wheat

kt

350

350

350

350

350

350

350

350

350

350

350

350

in-quota tariff

%

1.1

1.1

1.1

1.1

1.1

1.1

1.1

1.1

1.1

1.1

1.1

1.1

out-of-quota tariff

%

62

62

62

62

62

62

62

62

62

62

62

62

kt

399

399

399

399

399

399

399

399

399

399

399

399

in-quota tariff

%

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

0.7

out-of-quota tariff

%

58

58

58

58

58

58

58

58

58

58

58

58 101

Barley

EUROPEAN UNIONc, d Cereal support pricee

EUR/t

101

101

101

101

101

101

101

101

101

101

101

Cereal compensationf, g

EUR/ha

209

31

31

31

31

31

31

31

31

31

31

31

Rice support priceh

EUR/t

210

150

150

150

150

150

150

150

150

150

150

150

Compulsory set-aside rate

%

10

10

0

10

10

10

10

10

10

10

10

10

Set-aside paymentg

EUR/ha

209

31

31

31

31

31

31

31

31

31

31

31

Direct payment for rice

EUR/ha

592

470

470

470

470

470

470

470

470

470

470

470

Wheat tariff-quotab

kt

3 184

3 780

3 780

3 780

3 780

3 780

3 780

3 780

3 780

3 780

3 780

3 780

Coarse grain tariff-quotab

kt

3 409

3 469

3 469

3 469

3 469

3 469

3 469

3 469

3 469

3 469

3 469

3 469

Wheat

mt

15.4

15.4

15.4

15.4

15.4

15.4

15.4

15.4

15.4

15.4

15.4

15.4

Coarse grainsi

mt

10.8

10.8

10.8

10.8

10.8

10.8

10.8

10.8

10.8

10.8

10.8

10.8

Wheat support pricej

'000 JPY/t

133

120

120

120

120

120

120

120

120

120

120

120

Barley support pricek

'000 JPY/t

114

0

0

0

0

0

0

0

0

0

0

0

Wheat tariff-quota

kt

5 740

5 740

5 740

5 740

5 740

5 740

5 740

5 740

5 740

5 740

5 740

5 740 0.0

Subsidised export limitsb

JAPAN

in-quota tariff

'000 JPY/t

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

out-of-quota tariff

'000 JPY/t

55

55

55

55

55

55

55

55

55

55

55

55

1 369

1 369

1 369

1 369

1 369

1 369

1 369

1 369

1 369

1 369

1 369

1 369

Barley tariff-quota

kt

in-quota tariff

'000 JPY/t

0

0

0

0

0

0

0

0

0

0

0

0

out-of-quota tariff

'000 JPY/t

39

39

39

39

39

39

39

39

39

39

39

39 682

Rice tariff-quotal

682

682

682

682

682

682

682

682

682

682

682

in-quota tariff

kt '000 JPY/t

0

0

0

0

0

0

0

0

0

0

0

0

out-of-quota tariff

'000 JPY/t

341

341

341

341

341

341

341

341

341

341

341

341

KOREA Wheat tariff

%

5.9

5.4

5.4

5.4

5.4

5.4

5.4

5.4

5.4

5.4

5.4

5.4

Maize tariff-quota

kt

6 102

6 102

6 102

6 102

6 102

6 102

6 102

6 102

6 102

6 102

6 102

6 102

in-quota tariff

%

1.7

1.7

1.7

1.7

1.7

1.7

1.7

1.7

1.7

1.7

1.7

1.7

out-of-quota tariff

%

406

404

404

404

404

404

404

404

404

404

404

404

Barley tariff-quota

kt

53

54

54

54

54

54

54

54

54

54

54

54

in-quota tariff

%

23

23

23

23

23

23

23

23

23

23

23

23

out-of-quota tariff

%

362

359

359

359

359

359

359

359

359

359

359

359

kt

195

205

205

205

205

205

205

205

205

205

205

205

%

5

5

5

5

5

5

5

5

5

5

5

5

Wheat tariff

%

11

10

10

10

10

10

10

10

10

10

10

10

Coarse grain tariff

%

8

8

8

8

8

8

8

8

8

8

8

8

Rice tariff

%

11

10

10

10

10

10

10

10

10

10

10

10

Rice quotal in-quota tariff MERCOSUR

For notes, see end of the table.

166

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.4. Main policy assumptions for cereal markets (cont.) Average 02/0306/07

Crop yeara

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

MEXICO Wheat NAFTA tariff

%

0.3

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Fidelist social program

MXN mn

176

0

0

0

0

0

0

0

0

0

0

0

Tortilla consumption subsidy

MXN mn

0

0

0

0

0

0

0

0

0

0

0

0

Maize tariff-quota

kt

2 501

2 501

2 501

2 501

2 501

2 501

2 501

2 501

2 501

2 501

2 501

2 501

in-quota tariff

%

50

50

50

50

50

50

50

50

50

50

50

50

out-of-quota tariff

%

195

194

194

194

194

194

194

194

194

194

194

194

Barley tariff-quota

kt

5

5

5

5

5

5

5

5

5

5

5

5

in-quota tariff

%

50

50

50

50

50

50

50

50

50

50

50

50

out-of-quota tariff

%

116

115

115

115

115

115

115

115

115

115

115

115

UNITED STATES Wheat loan rate

USD/t

101.8

101.0

101.0

101.0

101.0

101.0

101.0

101.0

101.0

101.0

101.0

101.0

Maize loan rate

USD/t

77.2

76.8

76.8

76.8

76.8

76.8

76.8

76.8

76.8

76.8

76.8

76.8

Wheat

USD/t

16.9

16.9

16.9

16.9

16.9

16.9

16.9

16.9

16.9

16.9

16.9

16.9

Maize

USD/t

10.3

10.3

10.3

10.3

10.3

10.3

10.3

10.3

10.3

10.3

10.3

10.3

CRP areasm

mha

6.2

7.1

6.7

6.6

6.4

6.3

6.4

6.4

6.6

6.8

7.0

7.1

Wheat

mha

2.9

3.6

3.4

3.3

3.2

3.2

3.2

3.2

3.3

3.4

3.5

3.6

Coarse grains

mha

3.3

3.5

3.3

3.2

3.2

3.1

3.1

3.2

3.2

3.4

3.5

3.5

Prod. flex. contract payment

Subsidised export limitsb Wheat

mt

14.5

14.5

14.5

14.5

14.5

14.5

14.5

14.5

14.5

14.5

14.5

14.5

Coarse grains

mt

1.6

1.6

1.6

1.6

1.6

1.6

1.6

1.6

1.6

1.6

1.6

1.6

USD/t

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Wheat support price

CNY/t

0

0

0

0

0

0

0

0

0

0

0

0

Coarse grains support price

CNY/t

0

0

0

0

0

0

0

0

0

0

0

0

Rice support price

CNY/t

0

0

0

0

0

0

0

0

0

0

0

0

Wheat tariff-quota

kt

9 286

9 636

9 636

9 636

9 636

9 636

9 636

9 636

9 636

9 636

9 636

9 636

Wheat EEP paymentn CHINA

in-quota tariff

%

2.3

2.3

2.3

2.3

2.3

2.3

2.3

2.3

2.3

2.3

2.3

2.3

out-of-quota tariff

%

66.4

65.0

65.0

65.0

65.0

65.0

65.0

65.0

65.0

65.0

65.0

65.0

Coarse grains tariff

%

2

2

2

2

2

2

2

2

2

2

2

2

Maize tariff-quota

kt

6 795

7 200

7 200

7 200

7 200

7 200

7 200

7 200

7 200

7 200

7 200

7 200

in-quota tariff

%

3.7

3.7

3.7

3.7

3.7

3.7

3.7

3.7

3.7

3.7

3.7

3.7

out-of-quota tariff

%

43.9

41.7

41.7

41.7

41.7

41.7

41.7

41.7

41.7

41.7

41.7

41.7 5 320

Rice tariff-quota

kt

4 921

5 320

5 320

5 320

5 320

5 320

5 320

5 320

5 320

5 320

5 320

in-quota tariff

%

2.3

2.3

2.3

2.3

2.3

2.3

2.3

2.3

2.3

2.3

2.3

2.3

out-of-quota tariff

%

53.2

51.7

51.7

51.7

51.7

51.7

51.7

51.7

51.7

51.7

51.7

51.7 1 254

INDIA Input subsidy rate coarse grainso INR/t

1 452

1 254

1 254

1 254

1 254

1 254

1 254

1 254

1 254

1 254

1 254

Input subsidy rate riceo

INR/t

729

641

641

641

641

641

641

641

641

641

641

641

Input subsidy rate wheato

INR/t

1 854

1 772

1 772

1 772

1 772

1 772

1 772

1 772

1 772

1 772

1 772

1 772

Maize

INR/t

5 190

5 400

5 400

5 400

5 400

5 400

5 400

5 400

5 400

5 400

5 400

5 400

Rice

INR/t

5 190

5 700

5 700

5 700

5 700

5 700

5 700

5 700

5 700

5 700

5 700

5 700

Wheat

INR/t

6 300

6 400

6 400

6 400

6 400

6 400

6 400

6 400

6 400

6 400

6 400

6 400

Minimum support price

For notes, see end of the table.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

167

ANNEX A

Table A.4. Main policy assumptions for cereal markets (cont.) Crop yeara

Average 02/0306/07

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

Wheat export subsidy

INR/t

1 940

1 941

1 941

1 941

1 941

1 941

1 941

1 941

1 941

1 941

1 941

1 941

Wheat tariff

%

88

88

88

88

88

88

88

88

88

88

88

88

Maize tariff

%

50

50

50

50

50

50

50

50

50

50

50

50

Rice tariff

%

30

30

30

30

30

30

30

30

30

30

30

30

Barley tariff

%

100

100

100

100

100

100

100

100

100

100

100

100

a) b) c) d)

Beginning crop marketing year. Year beginning 1 July. Prices and payments in market Euro. EU farmers also benefit from the Single Farm Payment (SFP) Scheme, which provides flat-rate payments independent from current production decisions and market developments. For the accession countries, payments are phased in with the assumption of maximum top-ups from national budgets up to 2011 through the Single Area Payment (SAP) and from 2012 through the SFP. Due to modulation, between 2.7% and 4.6% of the total SFP will go to rural development spending rather than directly to the farmers in the 15 former member states. From 2013, 4.6% of the total SFP will go to rural development spending in the accession countries. e) Common intervention price for soft wheat, barley, maize and sorghum. f) Compensatory area payments. g) Actual payments made per hectare based on program yields. h) Subject to a purchase limit of 75 000 tonnes per year. i) The export volume excludes 0.4 mt of exported potato starch. The original limit on subsidised exports is 10.8 mt. j) Government purchase price, domestic wheat. k) Government purchase price, barley, 2nd grade, 1st class. l) Husked rice basis. m) Includes wheat, barley, maize, oats and sorghum. n) Average per tonne of total exports. o) Indian input subsidies consist of those for electricty, fertiliser and irrigation. Note: The source for tariffs and Tariff Rate Quotas is AMAD (Agricultural market access database). The tariff and TRQ data are based on Most Favoured Nation rates scheduled with the WTO and exclude those under preferential or regional agreements, which may be substantially different. Tariffs are simple averages of several product lines. Specific rates are converted to ad valorem rates using world prices in the Outlook. Import quotas are based on global commitments scheduled in the WTO rather than those allocated to preferential partners under regional or other agreements. For Mexico, the NAFTA in-quota tariff on maize and barley is zero, while the tariff-rate quota becomes unlimited in 2003 for barley and 2008 for maize. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/383821625435

168

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.5. World cereal projections Crop yeara

Average 02/0306/07

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

WHEAT OECDb Production

mt

250.8

234.2

283.3

272.8

271.6

276.8

280.7

281.1

283.5

285.7

287.9

290.5

Consumption

mt

205.4

205.7

212.6

218.9

222.0

225.6

228.7

231.8

234.3

236.4

239.0

241.3

Closing stocks

mt

54.6

39.3

54.6

57.4

55.6

54.6

54.2

52.9

51.4

50.7

49.9

49.4

Production

mt

345.7

368.2

375.8

372.9

376.0

376.9

381.9

386.5

388.3

392.3

394.7

398.9

Consumption

mt

406.5

415.8

422.9

423.4

428.3

429.5

432.8

436.0

438.7

441.9

444.8

448.1

Closing stocks

mt

128.1

115.7

124.1

124.6

123.6

123.3

124.9

126.1

126.4

126.9

126.5

126.9

Production

mt

596.5

602.4

659.2

645.7

647.5

653.7

662.7

667.6

671.8

678.0

682.6

689.4

Consumption

mt

611.9

621.5

635.5

642.3

650.3

655.0

661.5

667.7

673.0

678.3

683.7

689.4

Closing stocks

mt

182.7

155.0

178.6

182.0

179.2

177.9

179.1

179.0

177.9

177.6

176.4

176.4

Priced

USD/t

167.8

318.6

267.0

233.6

225.9

229.7

231.0

231.2

230.2

230.9

231.6

230.6

Production

mt

508.6

567.2

567.8

576.2

590.1

601.2

608.1

611.8

617.4

625.3

630.2

637.2

Consumption

mt

488.7

546.7

549.8

556.1

563.2

571.9

577.6

581.9

585.5

591.4

595.4

600.8

Closing stocks

mt

102.1

79.9

70.3

68.2

72.9

78.4

82.0

84.4

87.2

89.8

91.7

94.8

Production

mt

456.3

491.9

507.3

514.6

523.1

534.1

539.9

545.5

551.7

562.0

571.3

579.5

Consumption

mt

482.2

516.6

532.8

542.8

547.9

553.3

564.4

573.3

582.4

591.3

602.2

611.3

Closing stocks

mt

126.3

123.7

125.7

119.8

117.2

121.8

124.2

123.9

122.2

124.1

126.2

127.7

Production

mt

964.9

1 059.1

1 075.0

1 090.8

1 113.3

1 135.2

1 148.0

1 157.4

1 169.0

1 187.3

1 201.5

1 216.7

Consumption

mt

970.9

1 063.4

1 082.6

1 098.9

1 111.1

1 125.1

1 142.0

1 155.3

1 168.0

1 182.7

1 197.6

1 212.1

Closing stocks

mt

228.3

203.6

196.1

188.0

190.1

200.3

206.2

208.3

209.3

213.9

217.8

222.4

Pricee

USD/t

113.2

181.3

185.3

185.0

189.0

188.4

178.5

173.0

173.2

170.9

166.6

164.6

Non-OECD

WORLDc

COARSE GRAINS OECDb

Non-OECD

WORLDc

RICE OECDb Production

mt

22.2

21.0

21.9

22.3

22.3

21.9

21.8

21.9

21.9

21.9

21.8

21.7

Consumption

mt

22.8

23.0

22.6

22.6

22.6

22.6

22.5

22.5

22.5

22.4

22.4

22.4

Closing stocks

mt

6.8

5.3

5.4

5.3

5.4

5.4

5.3

5.2

5.1

5.1

5.0

5.0

Production

mt

387.5

410.8

416.9

424.2

426.4

429.0

434.0

437.6

442.2

446.9

450.4

453.2

Consumption

mt

399.2

416.5

415.1

418.1

426.2

431.8

434.4

437.0

441.4

445.9

449.7

452.8

Closing stocks

mt

85.7

73.6

74.5

80.3

80.1

76.6

75.6

75.7

76.0

76.5

76.6

76.4

Production

mt

409.7

431.8

438.8

446.5

448.7

450.9

455.9

459.5

464.1

468.7

472.2

475.0

Consumption

mt

422.0

439.5

437.8

440.8

448.8

454.4

456.9

459.4

463.8

468.4

472.1

475.2

Closing stocks

mt

92.5

78.8

79.9

85.6

85.5

81.9

80.9

80.9

81.2

81.5

81.6

81.4

Pricef

USD/t

262.3

361.0

390.6

367.9

330.7

326.7

337.2

340.3

335.6

333.8

332.5

334.5

Non-OECD

WORLDc

a) Beginning crop marketing year. b) Excludes Iceland but includes the 8 EU members that are not members of the OECD. c) Source of historic data is USDA. d) No. 2 hard red winter wheat, ordinary protein, USA f.o.b. Gulf Ports (June/May), less EEP payments where applicable. e) No. 2 yellow corn, US f.o.b. Gulf Ports (September/August). f) Milled, 100%, grade b, Nominal Price Quote, NPQ, f.o.b. Bangkok (August/July) est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/383822472634

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

169

ANNEX A

Table A.6. Wheat projections Growthb (%)

PRODUCTION (kt) Crop yeara

WORLD

Average 2005-07 2008 est.

2017

Growthb (%)

IMPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

EXPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

608 070

659 171

689 357

0.46

0.67

110 255

121 070

126 465

0.79

0.82

107 941

121 070

126 465

0.51

0.82

317 250

357 754

373 162

0.15

0.72

22 583

24 575

23 616

0.21

0.00

90 330

101 214

103 802

0.29

0.53

77 976

89 472

84 268

–1.56

–0.25

2 686

2 747

3 288

–1.06

2.19

44 427

43 077

42 204

0.10

0.15

Canada

23 689

24 744

26 320

–0.81

0.99

26

25

22

–11.27

–0.69

16 426

15 656

15 675

–0.09

0.78

United States

54 287

64 728

57 948

–1.90

–0.78

2 661

2 722

3 266

–0.84

2.21

28 001

27 422

26 529

0.08

–0.21

130 809

147 772

157 811

–0.22

1.04

8 332

9 664

8 422

4.82

–0.44

12 970

18 892

12 993

–4.93

–3.61

126 735

143 633

152 874

–0.12

1.01

6 472

7 683

6 716

5.49

–0.18

12 785

18 752

12 838

–4.85

–3.66

89 463

92 596

101 862

4.19

1.18

4 676

4 881

4 914

–5.17

0.04

22 350

21 368

31 374

13.82

4.20

Russian Federation

46 867

48 006

51 773

5.40

0.97

1 048

1 181

1 214

–12.03

0.18

11 154

12 319

15 159

32.21

3.30

Ukraine

15 403

14 883

17 768

–1.31

2.17

71

0

0

–16.95

0.00

3 773

814

6 147

5.50

15.55

16 173

25 141

26 477

–5.92

0.40

389

397

395

10.66

–0.01

10 432

17 746

17 101

–7.82

–0.45

15 868

24 834

26 170

–6.02

0.41

0

0

0

0.00

0.00

10 432

17 746

17 101

–7.82

–0.45

New Zealand

305

307

307

–1.31

0.00

389

397

395

10.66

–0.01

0

0

0

21.66

0.00

OTHER DEVELOPED

2 829

2 773

2 745

0.69

–0.36

6 499

6 887

6 596

0.80

–0.42

151

130

130

7.90

0.00 0.00

DEVELOPED NORTH AMERICA

EUROPE EU(27) CIS

OCEANIA DEVELOPED Australia

Japan

881

901

936

5.30

0.41

5 455

5 618

5 216

–0.37

–0.84

0

0

0

0.00

1 947

1 872

1 809

–1.07

–0.74

1 044

1 269

1 381

8.91

1.34

151

130

130

7.90

0.00

290 820

301 417

316 195

0.79

0.62

87 673

96 495

102 849

0.95

1.01

17 611

19 856

22 663

1.64

2.22

AFRICA

20 285

20 750

26 449

4.86

2.82

28 619

31 899

34 169

1.91

0.88

966

713

1 620

15.21

9.10

NORTH AFRICA

18 766

18 939

24 200

4.94

2.84

17 686

19 837

19 127

0.22

–0.42

400

183

480

12.81

10.49

Algeria

2 650

3 025

4 459

8.17

4.31

5 000

4 819

3 712

0.96

–2.50

0

0

0

0.00

0.00

Egypt

7 946

7 485

8 898

3.11

2.06

7 300

8 488

8 961

1.89

0.34

0

0

0

–13.69

0.00

1 518

1 811

2 248

3.95

2.60

10 932

12 062

15 042

5.15

2.77

566

530

1 140

17.09

8.56

24 615

25 564

30 075

1.66

2.12

20 207

22 821

20 868

1.28

–0.37

9 072

10 200

13 315

0.27

3.69

13 895

15 164

18 679

0.12

2.79

0

0

0

0.00

0.00

7 891

9 309

12 088

–0.74

3.88

Brazil

4 318

3 819

4 533

8.45

1.88

6 517

7 730

4 907

–0.82

–2.92

219

0

0

11.80

0.00

Chile

1 526

1 255

1 202

0.15

–0.35

780

1 352

1 387

4.71

1.17

0

0

0

–24.58

0.00

Mexico

3 253

3 399

3 387

–0.49

0.12

3 624

3 866

3 561

4.33

–1.49

415

402

415

4.04

0.15

555

783

895

6.04

1.36

23

0

0

–21.07

0.00

125

221

336

8.55

2.38

ASIA and PACIFIC

245 920

255 103

259 672

0.41

0.26

38 847

41 775

47 813

0.12

1.78

7 572

8 943

7 728

2.59

–0.81

Bangladesh c China

872

819

918

–10.48

1.24

1 899

3 045

3 299

0.83

1.77

0

0

0

–55.14

0.00

102 343

103 702

95 963

–0.73

–0.88

507

347

2 046

–4.92

17.11

2 395

2 910

1 442

18.57

–7.78

70 997

76 225

81 421

0.23

0.91

3 054

1 863

3 090

14.17

4.80

433

295

250

10.25

–1.84

0

0

0

0.00

0.00

5 006

5 329

5 534

4.80

0.68

30

32

47

5.96

4.29

14 603

15 327

16 390

5.98

0.80

767

800

1 000

–35.11

2.55

147

403

432

50.54

0.76

Korea

6

6

9

6.85

3.93

3 561

3 935

3 741

–1.41

–0.40

11

11

11

–12.29

0.00

Malaysia

0

0

0

0.00

0.00

1 437

1 372

1 472

1.96

0.12

80

83

20

–1.83

–15.13

Pakistan

21 920

22 755

25 318

1.98

1.21

932

1 639

2 400

–0.25

6.87

733

1 500

1 500

–7.20

1.00

2 583

2 509

564

4.83

–16.19

54

202

2 569

5.71

25.39

30

33

55

33.97

5.81

19 603

19 879

21 581

–0.37

1.03

1 300

1 800

1 800

–3.33

2.06

1 800

1 857

2 152

–0.87

4.91

7 303

7 717

10 030

2.59

3.04

10 564

13 271

13 605

2.61

1.09

110

71

59

–19.36

–0.55

OECD

245 525

283 347

290 490

–0.99

0.56

24 013

26 484

25 127

1.41

–0.15

69 939

81 900

74 776

–2.13

–0.63

NON-OECD

362 545

375 823

398 867

1.53

0.76

86 243

94 586

101 337

0.65

1.07

38 002

39 170

51 689

7.40

3.28

South Africa DEVELOPING

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN Argentina

Uruguay

India Indonesia Iran, Islamic Republic of

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC)

For notes, see end of the table.

170

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.6. Wheat projections (cont.) CONSUMPTION (kt) Crop yeara

WORLD DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS

Average 2005-07 2008 est.

2017

Growthb (%)

Growthb (%)

FOOD USE (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

PER CAPITA (kg)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

620 173

635 547

689 394

0.79

0.89

451 838

465 596

494 400

1.08

0.70

68.4

68.8

66.1

–0.15

–0.41

257 900

263 304

293 353

0.61

1.12

136 232

139 295

142 892

0.34

0.27

101.8

103.4

103.6

–0.05

0.01

39 490

41 214

46 035

–1.53

1.07

28 402

28 993

31 607

0.18

0.93

85.6

85.7

86.2

–0.82

0.04

8 296

8 645

10 593

0.43

1.92

3 108

3 160

3 843

1.32

2.08

95.3

95.1

107.3

0.33

1.24

31 194

32 569

35 442

–2.00

0.83

25 295

25 833

27 764

0.05

0.78

84.5

84.6

84.0

–0.96

–0.11

129 039

131 790

153 228

0.80

1.62

65 607

67 446

68 259

0.56

0.13

124.1

127.1

127.4

0.26

0.03

123 128

125 826

146 715

0.89

1.64

61 359

63 110

63 644

0.64

0.07

124.8

127.8

127.8

0.34

–0.02 0.17

72 793

73 464

75 318

1.13

0.16

31 980

32 206

32 606

–0.22

0.06

115.2

116.4

119.1

–0.02

Russian Federation

37 331

36 824

37 822

0.65

0.18

14 528

14 258

14 110

–0.79

–0.22

102.0

101.2

104.8

–0.35

0.28

Ukraine

11 367

11 811

11 502

–2.36

–0.43

5 767

5 885

5 327

–1.23

–1.12

123.9

128.3

124.7

–0.41

–0.33

7 335

7 291

9 553

5.19

2.96

2 108

2 309

2 331

2.57

0.96

85.2

91.5

85.0

1.39

0.04

6 641

6 589

8 851

5.27

3.23

1 773

1 931

1 953

3.01

1.16

86.1

91.8

85.3

1.81

0.21

New Zealand

694

702

702

4.45

0.00

335

378

378

0.44

0.00

80.8

89.6

83.5

–0.65

–0.78

OTHER DEVELOPED

OCEANIA DEVELOPED Australia

9 243

9 544

9 219

0.62

–0.41

8 135

8 341

8 089

0.90

–0.36

46.2

47.2

45.9

0.52

–0.34

Japan

6 327

6 515

6 162

0.20

–0.64

5 319

5 494

5 214

0.26

–0.59

41.6

43.0

41.5

0.14

–0.41

South Africa

2 916

3 029

3 057

1.57

0.06

2 816

2 847

2 875

2.21

0.07

58.3

58.3

56.8

1.11

–0.33

362 273

372 243

396 041

0.93

0.73

315 605

326 301

351 507

1.41

0.88

59.9

60.2

57.7

–0.04

–0.44

AFRICA

48 483

50 944

58 792

3.13

1.56

44 088

46 432

53 913

3.03

1.64

49.3

49.5

47.0

0.64

–0.60

NORTH AFRICA

36 519

38 153

42 677

2.54

1.22

32 695

34 309

38 515

2.47

1.26

138.7

140.2

134.0

0.55

–0.53

Algeria

7 450

7 651

8 160

2.41

0.71

6 900

7 099

7 611

2.18

0.77

206.9

206.5

194.5

0.71

–0.68

Egypt

15 213

15 927

17 723

2.55

1.14

14 146

14 838

16 523

2.40

1.15

190.7

193.1

186.0

0.59

–0.46

SUB-SAHARAN AFRICA

11 964

12 790

16 116

5.12

2.53

11 393

12 123

15 398

4.80

2.62

17.3

17.5

17.9

2.23

0.24

LATIN AMERICA and CARIBBEAN

35 572

37 783

37 554

1.91

0.25

30 913

32 805

32 760

2.02

0.34

55.0

57.0

51.4

0.74

–0.80

DEVELOPING

Argentina

5 817

6 005

6 541

0.99

0.65

4 613

4 736

5 596

1.32

1.37

118.0

119.0

129.6

0.34

0.46

Brazil

10 674

11 603

9 439

2.16

–0.67

10 034

10 911

8 868

2.16

–0.69

53.2

56.6

41.5

0.79

–1.85

Chile

2 271

2 401

2 582

1.87

0.70

1 996

2 101

2 275

1.56

0.78

121.2

125.0

124.8

0.43

–0.12

Mexico

6 461

6 862

6 533

1.85

–0.79

4 863

5 149

4 716

1.96

–1.09

47.3

48.9

41.0

1.10

–2.06

475

489

558

3.46

1.36

366

380

432

1.98

1.37

109.7

113.3

125.0

1.85

1.03

ASIA and PACIFIC

278 217

283 516

299 694

0.46

0.63

240 604

247 064

264 834

1.06

0.80

63.1

63.3

61.4

–0.20

–0.31

Bangladesh c China

3 171

3 339

4 196

–0.39

2.23

3 051

3 299

4 152

0.47

2.24

19.6

20.4

22.4

–1.41

0.69

100 849

100 092

96 665

–1.13

–0.36

87 936

87 566

85 865

–0.38

–0.15

66.4

65.3

60.4

–1.04

–0.81

73 684

76 704

83 960

1.21

1.06

66 618

69 454

76 660

1.82

1.16

57.8

58.6

57.5

0.20

–0.14

4 959

5 098

5 499

4.21

0.79

4 253

4 399

4 768

3.11

0.87

18.6

18.8

18.6

1.80

–0.11

15 383

15 646

16 983

0.92

0.90

11 883

12 144

13 377

1.24

1.07

169.0

168.2

164.3

0.21

–0.26

Korea

3 586

3 756

3 755

–1.30

–0.11

2 503

2 728

2 764

1.95

0.12

51.8

56.1

55.9

1.45

–0.07

Malaysia

1 279

1 347

1 460

1.57

0.83

1 054

1 120

1 254

2.24

1.19

40.4

41.5

40.6

0.27

–0.28

Pakistan

21 662

22 764

26 286

1.22

1.61

20 562

21 645

25 058

1.73

1.65

127.7

129.6

126.7

–0.15

–0.24

2 706

2 716

3 126

5.41

1.62

2 293

2 410

2 846

4.55

1.90

94.9

95.3

93.6

2.03

–0.14

19 670

19 824

21 252

0.22

0.79

14 250

14 699

16 192

1.46

1.09

192.8

193.8

193.3

0.08

–0.02

18 128

19 135

23 449

3.62

2.16

16 765

17 868

22 119

3.42

2.27

23.8

24.2

24.5

1.03

0.02

OECD

207 332

212 615

241 344

0.42

1.33

119 808

123 432

127 388

0.72

0.34

98.7

100.6

99.6

0.10

–0.11

NON-OECD

412 841

422 932

448 050

0.99

0.66

332 029

342 164

367 012

1.22

0.83

61.6

61.8

59.2

–0.16

–0.43

Uruguay

India Indonesia Iran, Islamic Republic of

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC)

a) Beginning crop marketing year – see Glossary of Terms for definitions. b) Least-squares growth rate (see glossary). c) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384007548283

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

171

ANNEX A

Table A.7. Coarse grain projections Growthb (%)

PRODUCTION (kt) Crop yeara

WORLD

Average 2005-07 2008 est.

2017

1 012 565 1 075 021 1 216 671

Growthb (%)

IMPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

EXPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

2.01

1.34

111 416

111 697

126 943

1.41

1.59

115 073

111 697

126 943

1.12

1.59

562 557

604 675

678 419

1.39

1.22

35 399

32 167

32 792

1.12

0.00

88 726

82 438

95 584

0.26

1.84

335 294

358 809

415 119

2.19

1.46

4 263

4 935

6 680

0.13

1.49

67 934

62 562

65 286

1.61

1.45

25 303

26 188

27 502

0.09

0.78

2 057

2 431

4 176

4.70

2.68

4 994

5 027

4 804

2.43

–0.07

309 991

332 621

387 617

2.37

1.51

2 207

2 504

2 504

–2.06

0.00

62 940

57 535

60 482

1.55

1.59

150 104

162 541

172 404

–0.79

0.88

8 440

4 630

3 920

7.58

–1.36

8 766

8 219

11 697

–9.55

2.94

138 891

150 992

159 914

–0.87

0.89

7 496

3 900

3 200

7.67

–1.63

8 333

7 818

11 296

–9.88

3.06

57 474

59 872

64 334

3.84

0.67

1 326

1 674

2 039

–3.72

3.61

7 016

4 769

9 464

12.66

4.21

Russian Federation

28 925

30 117

30 239

2.98

–0.11

550

774

1 186

–10.74

4.94

1 720

1 208

1 128

28.19

–7.39

Ukraine

17 618

19 074

22 261

5.07

1.76

157

270

353

8.72

2.96

4 618

3 361

7 821

10.83

6.87

10 352

13 362

15 666

–1.62

1.64

123

82

169

11.13

7.40

3 826

6 232

7 671

–5.38

1.82 1.82

DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS

OCEANIA DEVELOPED Australia

9 867

12 890

15 205

–1.63

1.70

0

0

0

–7.11

0.00

3 826

6 232

7 671

–5.36

New Zealand

485

472

462

–2.35

–0.24

123

82

169

12.32

7.40

0

0

0

–69.17

0.00

OTHER DEVELOPED

9 332

10 091

10 895

–0.39

0.45

21 246

20 847

19 983

–0.56

–0.48

1 184

657

1 467

–1.85

3.73 0.00

Japan

217

214

221

0.69

0.37

20 376

19 991

19 183

–0.81

–0.49

0

0

0

0.00

9 116

9 877

10 673

–0.41

0.45

870

855

800

9.39

–0.37

1 184

657

1 467

–1.85

3.73

450 008

470 345

538 253

2.83

1.49

76 018

79 529

94 151

1.51

2.19

26 347

29 258

31 359

4.24

0.87

AFRICA

92 688

97 476

114 215

3.49

1.77

14 892

15 825

21 371

2.78

3.62

3 060

4 030

4 435

13.79

0.02

NORTH AFRICA

23 555

24 690

29 390

4.48

1.97

11 328

12 249

16 133

3.02

3.31

403

497

1 379

62.05

13.59

Algeria

1 318

1 435

1 484

15.36

0.35

2 403

2 330

2 965

3.39

2.82

0

0

0

0.00

0.00

Egypt

8 189

8 018

8 231

1.14

0.36

4 758

5 335

6 698

2.11

2.72

0

0

0

0.00

0.00

69 133

72 786

84 824

3.17

1.70

3 564

3 576

5 238

1.98

4.65

2 656

3 532

3 057

12.31

–3.14 1.41

South Africa DEVELOPING

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

114 406

119 794

137 296

3.92

1.60

23 238

23 651

27 983

1.59

2.02

18 379

21 955

24 093

7.38

Argentina

24 274

22 891

30 277

3.59

3.13

0

0

0

0.00

0.00

13 214

12 124

16 492

4.26

3.22

Brazil

45 317

49 961

57 815

4.76

1.80

1 231

1 231

1 373

–2.26

0.56

3 893

8 054

5 357

76.74

–2.69 5.70

Chile

2 034

2 186

2 328

9.18

0.70

1 514

1 622

2 081

3.15

3.45

102

124

208

8.52

28 459

29 386

29 365

2.23

0.01

10 477

10 362

11 361

0.43

1.05

109

169

258

10.27

1.86

765

965

972

7.49

0.18

61

10

12

–26.01

1.08

110

190

10

1.61

–26.59

242 914

253 076

286 742

2.09

1.33

37 888

40 053

44 796

0.98

1.68

4 908

3 274

2 830

–8.01

–1.74

519

547

541

30.30

0.57

50

17

150

–0.65

17.81

0

0

0

0.00

0.00

151 069

158 254

180 122

1.76

1.44

1 627

1 489

2 044

–6.41

3.37

3 403

1 869

1 175

–11.64

–5.47

India

33 833

35 307

40 371

1.38

1.14

93

69

80

–17.03

1.64

325

444

455

79.67

0.27

Indonesia

12 193

12 726

13 630

3.28

0.68

1 121

575

904

7.29

10.24

100

102

120

–2.19

1.80

4 893

4 872

5 424

4.94

1.25

2 967

3 442

4 541

6.74

3.61

0

0

0

–10.65

0.00

309

315

413

–3.19

2.93

8 740

8 989

9 681

0.80

1.03

0

0

0

69.46

0.00

Malaysia

79

85

104

4.78

2.51

2 676

2 797

2 941

1.00

0.85

9

7

0

15.35

–25.06

Pakistan

3 503

3 874

4 135

6.42

0.64

26

40

22

6.89

–3.22

0

74

0

–1.26

–31.26

418

445

518

–0.28

1.53

7 528

8 742

9 060

2.03

0.82

0

0

0

0.00

0.00

13 294

13 155

14 930

2.32

1.33

618

705

849

–11.96

2.26

292

76

184

–12.95

9.65

42 683

45 299

51 315

3.93

1.39

2 281

2 287

4 277

1.56

6.94

2 625

3 591

3 084

13.78

–2.60

OECD

528 348

567 762

637 158

1.27

1.24

52 417

49 298

51 448

0.79

0.34

80 495

76 856

84 694

–0.49

1.67

NON-OECD

484 218

507 258

579 514

2.87

1.45

58 999

62 399

75 495

1.96

2.53

34 577

34 840

42 249

5.81

1.46

Mexico Uruguay ASIA and PACIFIC Bangladesh c China

Iran, Islamic Republic of Korea

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC)

For notes, see end of the table.

172

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.7. Coarse grain projections (cont.) CONSUMPTION (kt) Crop yeara

WORLD

Average 2005-07 2008 est.

2017

1 024 628 1 082 562 1 212 060

Growthb (%)

Growthb (%)

FEED USE (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

PER CAPITA (kg)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

2.21

1.25

626 360

634 481

688 037

1.20

0.98

30.5

30.5

30.8

0.53

0.14

527 324

562 186

612 585

1.87

0.95

356 291

354 967

363 240

0.43

0.40

32.7

31.3

30.8

0.47

–0.16

278 889

314 601

356 868

2.62

1.29

175 745

172 824

183 351

0.07

0.75

25.2

21.3

21.4

0.76

–0.04

23 156

23 474

26 828

0.03

1.29

19 088

18 430

18 758

–0.64

0.31

51.9

36.9

46.8

–1.26

2.29

255 732

291 126

330 040

2.88

1.29

156 657

154 395

164 593

0.16

0.80

22.3

19.6

18.6

1.32

–0.60

158 558

155 829

161 454

0.93

0.57

120 650

120 726

116 748

0.26

–0.16

46.9

45.5

45.0

1.05

–0.07

146 576

144 049

148 645

0.98

0.54

110 591

110 573

105 805

0.26

–0.25

49.4

48.0

47.4

1.07

–0.08

52 686

54 823

56 907

2.24

0.55

35 199

37 188

39 833

3.60

0.95

19.9

20.2

19.1

–2.16

–0.70

Russian Federation

28 232

29 265

30 273

1.05

0.52

18 617

19 466

21 385

2.19

1.24

23.3

24.2

21.1

–2.71

–1.63

Ukraine

13 511

14 635

14 814

3.11

0.30

9 271

10 448

10 405

4.68

0.17

25.8

25.5

28.9

–1.48

1.50

6 868

7 067

8 063

0.52

1.48

5 419

5 485

5 242

–0.15

0.24

8.5

9.4

7.4

–1.14

–1.00

DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS

OCEANIA DEVELOPED Australia

6 265

6 508

7 432

0.60

1.49

4 886

4 954

4 653

–0.25

0.15

9.5

10.7

8.3

–1.00

–0.98

New Zealand

602

559

631

–0.50

1.34

533

531

589

0.55

1.06

3.6

3.4

3.0

–3.32

–1.35

OTHER DEVELOPED

30 323

29 866

29 294

–0.03

–0.25

19 277

18 744

18 066

–0.21

–0.46

28.1

28.3

29.0

0.48

0.32

20 653

20 156

19 284

–0.45

–0.54

15 268

14 733

13 947

–0.56

–0.67

1.7

1.7

1.7

1.51

0.08

9 670

9 710

10 009

0.95

0.32

4 009

4 012

4 118

1.23

0.28

98.0

98.0

96.8

–0.27

–0.08

497 304

520 377

599 474

2.58

1.56

270 069

279 514

324 798

2.28

1.68

29.9

30.3

30.8

0.57

0.21

103 211

109 098

131 230

3.11

2.11

20 486

21 318

25 469

4.28

2.04

77.0

78.0

79.5

0.00

0.28

NORTH AFRICA

34 268

36 668

44 192

3.88

2.14

16 517

17 227

20 944

4.11

2.26

65.0

68.0

71.1

1.75

0.55

Algeria

3 590

3 750

4 453

5.75

1.96

2 788

2 928

3 522

7.38

2.10

20.0

20.0

20.4

0.00

0.27

Egypt

12 919

13 247

14 935

1.78

1.40

8 684

8 852

9 965

1.89

1.38

49.6

49.9

49.6

–0.03

0.00

68 943

72 430

87 038

2.75

2.10

3 969

4 091

4 525

5.06

1.09

81.4

81.6

82.3

–0.52

0.18

Japan South Africa DEVELOPING AFRICA

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

118 155

124 701

140 951

2.64

1.44

70 257

73 350

84 211

1.72

1.70

55.0

58.4

59.1

2.56

0.07

Argentina

10 808

11 953

13 485

2.27

2.06

8 694

9 413

10 799

2.27

2.19

7.7

9.0

11.4

2.75

2.66

Brazil

42 107

45 030

53 876

2.55

1.89

30 524

31 699

37 584

2.28

1.90

33.2

40.3

45.7

1.07

0.99

Chile

3 313

3 634

4 198

5.61

1.80

2 631

2 877

3 361

5.35

1.96

18.7

19.4

20.1

2.83

0.45

38 883

39 641

40 458

1.81

0.27

16 172

16 354

16 417

–1.58

0.10

152.7

155.3

147.3

4.12

–0.53

Mexico

709

822

977

7.22

1.94

286

293

312

2.11

0.73

33.3

33.9

35.0

1.65

0.41

ASIA and PACIFIC

Uruguay

275 939

286 578

327 294

2.37

1.39

179 326

184 846

215 118

2.29

1.63

15.2

14.7

13.7

–0.54

–0.77

Bangladesh c China

569

565

691

18.21

2.58

283

248

330

21.73

3.78

1.8

2.0

1.9

19.96

0.03

149 280

156 099

179 474

2.26

1.34

104 635

107 783

125 012

1.68

1.50

13.4

12.1

10.1

–1.36

–1.99

India

33 500

34 628

40 094

1.23

1.64

8 000

9 026

13 095

2.50

4.14

20.5

19.9

18.7

–0.58

–0.65

Indonesia

12 934

13 241

14 432

3.28

1.01

3 933

4 020

4 674

5.57

1.72

28.0

28.3

28.0

0.71

–0.03

Iran, Islamic Republic of

7 860

8 284

9 958

5.46

2.27

7 395

7 800

9 465

5.64

2.39

1.5

1.4

1.4

–0.28

–0.31

Korea

9 107

9 269

10 092

0.92

1.10

6 895

6 781

7 021

1.39

0.59

6.9

7.5

9.1

–1.03

2.23

Malaysia

2 715

2 853

3 046

1.10

0.94

2 552

2 633

2 814

1.65

0.97

1.8

1.8

1.8

–0.68

0.18

Pakistan

3 395

3 874

4 170

5.60

0.95

1 362

1 472

1 597

10.85

0.94

8.7

10.6

9.8

–0.89

–0.59 –0.41

Saudi Arabia

8 322

8 749

9 594

2.63

1.10

8 110

8 533

9 364

2.73

1.10

4.0

3.9

3.7

–1.28

14 003

13 132

15 545

3.15

1.62

11 333

10 466

12 319

3.44

1.48

16.5

16.2

17.1

0.07

0.62

41 225

43 844

52 509

3.22

2.06

3 435

3 583

3 941

7.51

1.17

45.0

45.7

46.6

0.06

0.26

OECD

516 841

549 777

600 809

1.89

0.97

343 108

338 903

345 779

0.13

0.35

41.6

40.3

39.7

1.89

–0.11

NON-OECD

507 787

532 785

611 251

2.55

1.52

283 251

295 578

342 258

2.60

1.67

28.0

28.4

29.0

0.15

0.26

Turkey LEAST DEVELOPED COUNTRIES (LDC)

a) Beginning crop marketing year – see Glossary of Terms for definitions. b) Least-squares growth rate (see glossary). c) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384058720185

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

173

ANNEX A

Table A.8. Rice projections Growthb (%)

PRODUCTION (kt) Crop yeara

WORLD DEVELOPED

Average 2005-07 2008 est.

2017

Growthb (%)

IMPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

EXPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

430 259

438 824

474 998

0.91

0.86

30 052

30 844

38 082

1.99

2.36

29 930

30 844

38 082

3.03

2.36

17 651

17 557

17 846

–0.37

0.05

4 562

4 830

5 641

2.41

1.82

3 816

3 677

4 930

–1.28

2.64

6 467

6 340

7 440

0.70

1.48

962

1 059

1 327

6.85

2.54

3 318

3 191

3 936

2.48

2.02

0

0

0

0.00

0.00

339

365

421

4.64

1.71

0

0

0

0.00

0.00

6 467

6 340

7 440

0.70

1.48

623

695

906

8.25

2.96

3 318

3 191

3 936

2.48

2.02

1 705

1 714

1 747

–0.06

0.26

1 236

1 415

1 655

0.72

1.86

159

201

223

–1.60

1.00

1 693

1 703

1 736

–0.03

0.26

1 104

1 282

1 506

0.40

1.93

158

200

222

–1.43

1.00

954

947

1 096

3.18

1.28

585

724

871

–1.79

2.58

31

32

27

0.72

0.18

422

410

517

4.45

2.05

255

381

302

–7.27

–1.44

19

20

10

7.25

–3.78

60

60

59

3.27

–0.66

107

104

140

6.84

3.29

0

0

0

–5.88

19.51

284

740

927

–30.10

2.54

178

100

154

10.40

4.77

142

93

585

–28.44

13.18 13.18

NORTH AMERICA Canada United States EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED Australia

284

740

927

–30.10

2.54

141

63

104

12.40

5.76

142

93

585

–28.44

New Zealand

0

0

0

0.00

0.00

37

38

49

3.89

2.93

0

0

0

0.00

0.00

OTHER DEVELOPED

8 241

7 815

6 636

–0.34

–1.85

1 601

1 532

1 635

2.49

0.64

166

160

160

–13.64

0.00

8 239

7 813

6 634

–0.34

–1.85

859

799

799

0.54

0.00

166

160

160

–13.64

0.00

2

2

2

0.00

0.00

742

733

836

5.03

1.30

0

0

0

0.00

0.00

412 608

421 266

457 152

0.97

0.89

25 491

26 014

32 440

1.92

2.46

26 114

27 167

33 152

3.76

2.33

13 977

14 716

18 494

3.18

2.50

8 923

8 989

12 248

6.80

3.27

1 043

1 097

857

12.35

–3.09

4 486

4 706

5 065

3.12

0.72

355

322

477

6.04

4.18

1 036

1 093

855

13.34

–3.08

1

1

1

0.00

–0.04

95

95

123

7.24

2.75

0

0

0

0.00

0.00

4 464

4 688

5 043

3.13

0.71

34

0

0

7.09

0.00

1 036

1 093

855

13.34

–3.08

Japan South Africa DEVELOPING AFRICA NORTH AFRICA Algeria Egypt SUB-SAHARAN AFRICA

9 492

10 010

13 430

3.24

3.25

8 568

8 667

11 771

6.84

3.23

7

5

2

–20.48

–6.69

17 149

17 497

20 108

2.10

1.37

3 603

3 384

4 512

0.27

3.55

2 123

1 902

2 606

4.12

3.08

973

1 012

1 606

3.81

4.20

15

15

15

–4.66

0.00

708

722

1 266

8.19

4.94

Brazil

8 220

8 397

8 284

2.45

–0.19

725

425

1 246

–8.15

13.66

275

161

185

31.88

4.18

Chile

94

88

87

4.93

–0.42

87

96

140

1.31

4.03

1

1

2

–10.05

9.04

217

213

188

–1.86

–1.83

719

703

750

4.37

0.70

2

2

2

–2.09

–0.55

LATIN AMERICA and CARIBBEAN Argentina

Mexico

852

778

1 057

1.27

3.45

0

0

0

3.94

0.00

728

737

947

0.06

3.40

ASIA and PACIFIC

Uruguay

381 482

389 054

418 549

0.85

0.80

12 964

13 641

15 681

0.03

1.61

22 948

24 168

29 689

3.45

2.46

Bangladesh c China

26 466

26 746

31 455

2.36

1.73

1 094

1 880

1 536

4.73

–2.55

1

1

1

0.84

0.00

127 146

126 683

126 855

–1.00

–0.03

650

686

761

15.54

1.26

1 410

2 244

2 221

–9.89

0.25

India

92 629

95 191

103 070

0.73

0.90

61

50

50

3.33

0.00

3 995

3 660

3 750

7.98

0.27

Indonesia

34 787

36 214

38 231

1.36

0.65

933

1 501

2 083

–19.36

3.93

0

0

0

–0.31

0.00

Iran, Islamic Republic of

2 003

2 283

2 782

4.17

2.00

1 000

833

661

0.44

–1.67

0

0

0

0.00

0.00

Korea

4 783

4 761

4 398

–1.82

–0.91

270

189

337

12.92

6.38

0

0

0

0.00

0.00

Malaysia

1 454

1 498

1 867

1.50

2.12

820

780

746

4.11

–1.05

0

0

0

0.00

0.00

Pakistan

5 491

5 482

6 003

2.06

1.17

1

0

0

–14.30

0.00

2 998

2 791

2 790

6.07

0.40

0

0

0

0.00

0.00

1 030

1 020

1 504

3.29

4.14

0

0

0

0.00

0.00

359

330

427

7.77

2.89

226

244

500

–2.91

7.70

1

0

0

–17.86

4.16

60 136

62 335

74 173

3.85

1.99

6 664

7 516

9 374

5.14

2.11

1 079

1 825

2 213

17.19

5.34

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC) OECD NON-OECD

22 042

21 901

21 749

–0.75

–0.18

4 404

4 463

5 475

3.12

2.30

3 787

3 647

4 905

–1.30

2.66

408 217

416 922

453 249

1.01

0.91

25 649

26 381

32 606

1.82

2.38

26 143

27 197

33 177

3.76

2.32

For notes, see end of the table.

174

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.8. Rice projections (cont.) Growthb (%)

CONSUMPTION (kt) Crop yeara

Growthb (%)

PER CAPITA (kg)

Average 200 5-07 est.

2008

2017

432 403

437 763

475 241

1.06

0.91

57.3

56.5

56.5

–0.12

0.00

18 928

18 501

18 619

0.75

0.05

14.1

13.7

13.4

0.35

–0.22

4 249

4 274

4 838

1.00

1.37

12.8

12.6

13.2

–0.01

0.49

339

365

421

4.64

1.71

10.4

11.0

11.8

3.64

0.88

3 909

3 910

4 417

0.72

1.34

13.1

12.8

13.4

–0.29

0.45

2 840

2 975

3 153

0.84

0.62

5.4

5.6

5.9

0.55

0.51

2 700

2 831

2 994

0.71

0.59

5.5

5.7

6.0

0.41

0.49

1 537

1 609

1 940

2.44

2.01

5.5

5.7

7.0

2.60

2.14

Russian Federation

687

741

808

1.33

0.96

4.8

5.3

6.0

1.77

1.46

Ukraine

167

164

199

5.53

1.99

3.6

3.6

4.6

6.35

2.77

437

441

577

2.20

3.14

17.7

17.5

21.1

1.02

2.22 2.21

WORLD DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS

OCEANIA DEVELOPED Australia

1998-2007

2008-17

Average 200 5-07 est.

2008

2017

1998-2007

2008-17

399

403

528

2.05

3.16

19.4

19.2

23.1

0.85

New Zealand

37

38

49

3.89

2.93

9.0

9.0

10.9

2.79

2.15

OTHER DEVELOPED

9 866

9 202

8 111

0.31

–1.44

55.8

51.9

45.7

–0.07

–1.43

9 113

8 467

7 273

0.00

–1.71

71.3

66.3

57.9

–0.12

–1.53

752

735

838

4.67

1.29

14.6

14.1

15.7

3.94

0.97

413 474

419 262

456 622

1.08

0.95

68.2

67.1

66.2

–0.33

–0.15

21 992

22 579

29 870

4.29

3.07

21.8

21.4

23.9

2.07

1.15

3 836

3 873

4 670

1.36

2.01

13.6

13.2

14.0

0.50

0.58

96

96

124

7.23

2.75

2.9

2.8

3.2

5.75

1.30

3 489

3 535

4 172

1.05

1.77

38.5

37.5

39.7

0.33

0.52

SUB-SAHARAN AFRICA

18 156

18 706

25 200

5.00

3.28

24.8

24.4

27.2

2.33

1.19

LATIN AMERICA and CARIBBEAN

19 134

19 028

21 966

1.45

1.74

32.3

31.5

33.0

0.20

0.68

280

304

360

0.47

1.88

7.1

7.6

8.3

–0.52

0.97

Brazil

9 020

8 732

9 302

0.29

1.12

47.8

45.3

43.5

–1.07

–0.04

Chile

179

185

226

2.42

2.13

10.8

10.9

12.3

1.31

1.24

Mexico

912

902

938

2.15

0.32

8.9

8.6

8.2

1.29

–0.66

Japan South Africa DEVELOPING AFRICA NORTH AFRICA Algeria Egypt

Argentina

103

102

107

5.82

0.57

10.1

10.1

11.5

–0.24

1.45

ASIA and PACIFIC

Uruguay

372 348

377 655

404 786

0.89

0.76

84.4

83.3

82.4

–0.34

–0.14

Bangladesh c China

27 992

28 944

33 014

2.86

1.50

149.0

147.9

150.6

0.98

0.24

128 383

125 920

125 531

–0.65

–0.03

79.1

76.1

74.1

–1.22

–0.29

India

87 095

89 964

98 919

0.74

1.02

73.5

73.7

72.2

–0.58

–0.25

Indonesia

35 987

37 342

40 356

0.12

0.86

151.5

151.5

150.5

–0.11

–0.07

Iran, Islamic Republic of

2 986

3 128

3 462

2.87

1.22

36.3

36.8

36.8

2.33

0.10

Korea

5 088

5 055

4 751

–0.54

–0.69

82.2

81.1

74.9

–1.04

–0.87

Malaysia

2 272

2 276

2 614

1.86

1.14

84.1

82.0

82.8

–0.17

–0.31

Pakistan

2 494

2 688

3 207

–1.04

1.90

14.0

14.5

14.9

–2.43

0.19

Saudi Arabia

1 060

1 036

1 506

3.01

4.09

40.8

39.0

47.9

0.80

2.22

589

580

925

3.08

5.19

7.5

7.1

10.4

1.54

4.20

65 611

68 551

81 703

4.12

1.95

74.3

73.6

74.7

0.91

0.16

Turkey LEAST DEVELOPED COUNTRIES (LDC) OECD NON-OECD

23 171

22 637

22 399

0.35

–0.13

18.1

17.5

16.7

–0.23

–0.57

409 231

415 126

452 842

1.11

0.96

66.1

65.1

64.7

–0.22

–0.08

a) Beginning crop marketing year – see Glossary of Terms for definitions. b) Least-squares growth rate (see glossary). c) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384080323752

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

175

ANNEX A

Table A.9. Main policy assumptions for oilseed markets Average 02/0306/07

Crop yeara

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

14/16

16/17

17/18

ARGENTINA Oilseed export tax

%

24.3

27.5

44.1

44.1

44.1

44.1

44.1

44.1

44.1

44.1

44.1

44.1

Oilseed meal export tax

%

20.8

24.0

41.1

41.1

41.1

41.1

41.1

41.1

41.1

41.1

41.1

41.1

Oilseed oil export tax

%

20.8

24.0

39.6

39.6

39.6

39.6

39.6

39.6

39.6

39.6

39.6

39.6

Soybean oil

%

8.0

8.0

8.0

8.0

8.0

8.0

8.0

8.0

8.0

8.0

8.0

8.0

Rapeseed oil

%

8.0

8.0

8.0

8.0

8.0

8.0

8.0

8.0

8.0

8.0

8.0

8.0

%

6.4

6.4

6.4

6.4

6.4

6.4

6.4

6.4

6.4

6.4

6.4

6.4

AUSTRALIA Tariffs

CANADA Tariffs Rapeseed oil EUROPEAN UNIONb Oilseed compensationc, d

EUR/ha

209

31

31

31

31

31

31

31

31

31

31

31

Compulsory set-aside rate

%

10.0

10

0

10

10

10

10

10

10

10

10

10

Set-aside paymentd

EUR/ha

208.7

31

31

31

31

31

31

31

31

31

31

31

Tariffs Soybean oil

%

6.0

6.0

6.0

6.0

6.0

6.0

6.0

6.0

6.0

6.0

6.0

6.0

Rapeseed oil

%

6.0

6.0

6.0

6.0

6.0

6.0

6.0

6.0

6.0

6.0

6.0

6.0

bn. JPY

24.9

23.5

23.5

23.5

23.5

23.5

23.5

23.5

23.5

23.5

23.5

23.5

Soybean oil

JPY/kg

10.9

10.9

10.9

10.9

10.9

10.9

10.9

10.9

10.9

10.9

10.9

10.9

Rapeseed oil

JPY/kg

10.9

10.9

10.9

10.9

10.9

10.9

10.9

10.9

10.9

10.9

10.9

10.9 1 032

JAPAN New output payments Soybeans Tariffs

KOREA Soybean tariff-quota

kt

1 032

1 032

1 032

1 032

1 032

1 032

1 032

1 032

1 032

1 032

1 032

in-quota tariff

%

5

5

5

5

5

5

5

5

5

5

5

5

out-of-quota tariff

%

490

487

487

487

487

487

487

487

487

487

487

487

183

185

162

161

160

158

156

155

155

155

155

154

MXN/ha

906

980

1 013

1 045

1 078

1 111

1 145

1 180

1 217

1 254

1 293

1 332

Soybeans

%

33.2

33.0

33.0

33.0

33.0

33.0

33.0

33.0

33.0

33.0

33.0

33.0

Soybean meal

%

24.6

23.8

23.8

23.8

23.8

23.8

23.8

23.8

23.8

23.8

23.8

23.8

Soybean oil

%

45.3

45.0

45.0

45.0

45.0

45.0

45.0

45.0

45.0

45.0

45.0

45.0

183.7

183.7

183.7

183.7

183.7

183.7

183.7

183.7

183.7

183.7

183.7

183.7

mha

2.1

2.4

2.2

2.2

2.1

2.1

2.0

2.0

1.9

1.8

1.8

1.7

Rapeseed

%

3.0

3.0

3.0

3.0

3.0

3.0

3.0

3.0

3.0

3.0

3.0

3.0

Soybean meal

%

2.2

2.2

2.2

2.2

2.2

2.2

2.2

2.2

2.2

2.2

2.2

2.2

Rapeseed meal

%

1.2

1.2

1.2

1.2

1.2

1.2

1.2

1.2

1.2

1.2

1.2

1.2

Soybean oil

%

12.7

12.7

12.7

12.7

12.7

12.7

12.7

12.7

12.7

12.7

12.7

12.7

Rapeseed oil

%

3.2

3.2

3.2

3.2

3.2

3.2

3.2

3.2

3.2

3.2

3.2

3.2

141

141

141

141

141

141

141

141

141

141

141

141

Soybean (for food) mark up '000 KRW/t MEXICO Soybeans income paymente Tariffs

UNITED STATES Soybeans loan rate

USD/t

CRP area Soybeans Tariffs

Subsidised export limits Oilseed oils

kt

For notes, see end of the table.

176

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.9. Main policy assumptions for oilseed markets (cont.) Crop yeara

Average 02/0306/07

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

14/16

16/17

17/18

1 422.4

1 610.6

1 672.9

1 725.6

1 776.0

1 832.7

1 891.0

1 950.9

2 014.5

2 080.3

2 149.9

2 219.6

CHINA Soybeans support price

CNY/t

Tariffs Soybeans

%

2.4

2.4

2.4

2.4

2.4

2.4

2.4

2.4

2.4

2.4

2.4

2.4

Soybean meal

%

6.3

6.3

6.3

6.3

6.3

6.3

6.3

6.3

6.3

6.3

6.3

6.3

Soybean oil in-quota tariff %

9.0

9.0

9.0

9.0

9.0

9.0

9.0

9.0

9.0

9.0

9.0

9.0

7 034.9

7 998.1

7 998.1

7 998.1

7 998.1

7 998.1

7 998.1

7 998.1

7 998.1

7 998.1

7 998.1

7 998.1

Vegetable oil tariff-quota

kt

INDIA Input subsidy rate, oilseedsf

R/T

5 663

4 883

4 883

4 883

4 883

4 883

4 883

4 883

4 883

4 883

4 883

4 883

Soybean tariff

%

35

30

30

30

30

30

30

30

30

30

30

30

Rapeseed tariff

%

35

30

30

30

30

30

30

30

30

30

30

30

Sunflower tariff

%

35

30

30

30

30

30

30

30

30

30

30

30

Oilseed tariff

%

35

30

30

30

30

30

30

30

30

30

30

30

Soybean meal tariff

%

100

100

100

100

100

100

100

100

100

100

100

100

Rapeseed meal tariff

%

100

100

100

100

100

100

100

100

100

100

100

100

Sunflower meal tariff

%

100

100

100

100

100

100

100

100

100

100

100

100

Soybean oil tariff

%

45

45

45

45

45

45

45

45

45

45

45

45

Rapeseed oil tariff

%

45

45

45

45

45

45

45

45

45

45

45

45

Sunflower oil tariff

%

75

60

60

60

60

60

60

60

60

60

60

60

Palm oil tariff

%

80

50

50

50

50

50

50

50

50

50

50

50

Vegetables oil tariff

%

100

48

48

48

48

48

48

48

48

48

48

48

a) Beginning crop marketing year. b) EU farmers also benefit from the Single Farm Payment (SFP) Scheme, which provides flat-rate payments independent from current production decisions and market developments. For the accession countries, payments are phased in with the assumption of maximum top-ups from national budgets up to 2011 through the Single Area Payment (SAP) and from 2012 through the SFP. Due to modulation, between 2.7% and 4.6% of the total SFP will go to rural development spending rather than directly to the farmers in the 15 former member states. From 2013, 4.6% of the total SFP will go to rural development spending in the accession countries. c) Compensatory area payments, before penalties. d) Payments made per hectare based on regional yields. e) Weighted average of autumn/winter and spring/summer. f) Indian input subsidies consist of those for electricty, fertiliser and irrigation. Note: The source for tariffs and Tariff Rate Quotas is AMAD (Agricultural market access database). The tariff and TRQ data are based on Most Favoured Nation rates scheduled with the WTO and exclude those under preferential or regional agreements, which may be substantially different. Tariffs are simple averages of several product lines. Specific rates are converted to ad valorem rates using world prices in the Outlook. Import quotas are based on global commitments scheduled in the WTO rather than those allocated to preferential partners under regional or other agreements. For Mexico, the NAFTA tariffs on soybeans, oil meals and soybean oil are zero after 2003. est.: estimate. Source: OECD and FAO Secretariats.

1 2 http://dx.doi.org/10.1787/384084020440

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

177

ANNEX A

Table A.10. World oilseed projections Average 02/0306/07

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

14/16

16/17

17/18

OILSEEDS (crop yeara) OECDb Production

mt

115.5

109.6

123.9

125.9

127.7

128.9

130.3

131.5

133.7

135.1

136.8

138.6

Consumption

mt

111.5

121.3

120.4

123.5

126.2

127.8

129.4

130.8

132.9

134.5

136.7

139.1

crush

mt

100.5

110.2

109.6

112.9

115.6

117.2

118.6

120.0

122.1

123.6

125.8

128.1

Closing stocks

mt

17.5

13.2

12.6

13.2

13.2

13.4

13.9

13.9

14.0

13.9

13.9

14.3

Production

mt

162.0

184.7

191.9

200.7

206.4

212.4

217.9

222.9

228.2

233.4

238.9

244.6

Consumption

mt

164.9

191.8

196.5

202.8

207.9

212.7

218.1

223.3

228.8

233.9

238.8

243.9

crush

mt

139.0

162.5

166.5

172.3

177.5

182.1

187.0

191.8

196.8

201.5

206.2

210.9

Closing stocks

mt

9.5

8.4

7.9

7.5

7.5

8.1

8.4

8.6

8.6

8.7

8.9

8.7

Production

mt

277.5

294.3

315.8

326.5

334.2

341.3

348.2

354.4

361.8

368.5

375.7

383.2

Consumption

mt

276.4

313.1

316.9

326.3

334.1

340.6

347.4

354.1

361.8

368.4

375.5

383.0

crush

mt

239.5

272.7

276.1

285.2

293.1

299.3

305.6

311.8

318.9

325.1

331.9

339.0

Closing stocks

mt

27.0

21.6

20.5

20.7

20.7

21.5

22.3

22.5

22.6

22.7

22.8

23.0

Priced

USD/t

293.4

485.8

481.9

470.6

468.3

464.2

455.8

452.4

453.2

455.6

457.6

457.2

Non-OECD

WORLDc

OILSEED MEALS (marketing year) OECDb Production

mt

73.0

79.2

78.9

81.2

83.1

84.2

85.2

86.2

87.6

88.7

90.1

91.6

Consumption

mt

96.2

103.8

105.8

107.1

108.0

108.7

109.3

110.2

111.4

112.2

113.2

114.2

Closing stocks

mt

2.2

2.2

2.1

2.1

2.1

2.1

2.1

2.1

2.1

2.1

2.1

2.1

Production

mt

101.0

116.0

120.5

124.6

128.4

131.8

135.4

138.9

142.5

146.0

149.4

152.9

Consumption

mt

73.3

89.4

94.0

98.9

103.5

107.2

111.3

115.0

118.7

122.5

126.2

130.2

Closing stocks

mt

4.1

4.9

4.5

4.3

4.3

4.3

4.4

4.4

4.4

4.4

4.4

4.5

Production

mt

174.0

195.2

199.4

205.8

211.5

216.0

220.6

225.1

230.2

234.6

239.5

244.5

Consumption

mt

169.5

193.1

199.8

206.0

211.5

215.9

220.6

225.1

230.2

234.6

239.5

244.4

Closing stocks

mt

6.3

7.1

6.6

6.4

6.3

6.4

6.5

6.4

6.4

6.5

6.5

6.5

Pricee

USD/t

219.5

365.7

348.2

331.5

328.4

321.6

308.4

302.6

303.4

304.0

305.8

307.0

Non-OECD

WORLDc

VEGETABLE OILS (marketing year) OECDb Production

mt

24.8

27.3

27.6

28.4

29.1

29.6

29.9

30.3

31.0

31.5

32.1

32.8

Consumption

mt

31.4

37.0

39.4

41.5

43.3

44.2

45.2

46.2

47.2

48.3

49.2

50.2

Closing stocks

mt

2.4

2.4

2.4

2.3

2.4

2.4

2.3

2.3

2.3

2.2

2.2

2.3

Production

mt

65.8

78.8

82.9

86.1

89.3

92.3

95.4

98.5

101.6

104.7

107.7

110.7

Consumption

mt

57.7

67.7

70.7

72.9

74.9

77.6

80.1

82.6

85.3

87.7

90.5

93.2

Closing stocks

mt

5.2

5.6

6.0

6.1

6.3

6.4

6.5

6.6

6.7

6.8

6.9

7.0

Production

mt

90.6

106.1

110.5

114.5

118.4

121.8

125.3

128.8

132.6

136.1

139.8

143.5

of which palm oil

mt

33.5

41.9

44.0

45.8

47.7

49.6

51.4

53.3

55.1

56.9

58.7

60.5

Consumption

mt

89.1

104.7

110.1

114.4

118.2

121.8

125.3

128.8

132.5

136.1

139.7

143.4

Closing stocks

mt

Oil pricef

USD/t

Non-OECD

WORLDc

7.6

7.9

8.4

8.5

8.7

8.8

8.8

8.9

8.9

9.0

9.1

9.3

587.5

1 015.1

986.9

1 017.9

1 026.3

1 031.2

1 043.8

1 048.0

1 050.9

1 055.9

1 060.3

1 055.1

a) Beginning crop marketing year. b) Excludes Iceland but includes the 8 EU members that are not members of the OECD. c) Source of historic data is USDA. d) Weighted average oilseed price, European port. e) Weighted average meal price, European port. f) Weighted average price of oilseed oils and palm oil, European port. est: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384102346200

178

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.11. Oilseed projections Growthb (%)

PRODUCTION (kt) Crop yeara

WORLD DEVELOPED NORTH AMERICA

Average 2005-07 2008 est.

2017

Growthb (%)

IMPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

EXPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

299 791

315 785

383 185

3.95

2.06

80 131

80 052

97 488

5.35

2.10

76 732

80 052

97 488

5.00

2.10

135 444

140 543

162 627

1.72

1.54

26 953

23 451

22 489

–0.06

–0.88

37 999

37 311

35 806

0.90

–0.45

94 505

94 834

99 507

0.88

0.55

1 405

1 409

1 227

5.00

–0.76

35 099

33 423

28 220

2.09

–1.67

Canada

12 306

12 613

14 735

2.59

1.55

575

562

662

–0.41

0.89

6 996

7 651

6 449

5.15

–1.64

United States

82 199

82 220

84 772

0.67

0.38

830

847

565

11.28

–2.21

28 103

25 773

21 770

1.48

–1.67

23 889

26 749

35 830

2.24

3.02

18 869

15 316

14 866

0.13

–1.06

690

795

795

–18.19

0.00

23 215

26 046

35 085

2.25

3.08

18 295

14 731

14 217

0.16

–1.16

672

777

777

–18.73

0.00

14 973

16 322

23 271

10.06

3.58

212

194

101

–4.95

–7.34

1 664

2 263

5 024

–0.25

6.60

Russian Federation

7 467

7 720

10 807

8.99

3.28

33

33

37

–15.06

0.56

430

476

1 716

–7.78

9.11

Ukraine

6 136

7 073

10 409

10.43

3.97

10

8

15

15.84

7.32

1 032

1 514

2 915

4.95

5.96

1 059

1 571

2 305

–10.78

4.11

27

8

8

1.78

0.00

514

820

1 481

–16.94

6.44

EUROPE EU(27) CIS

OCEANIA DEVELOPED Australia

1 055

1 567

2 301

–10.81

4.12

26

6

6

2.43

0.00

513

819

1 480

–16.95

6.44

New Zealand

4

4

4

0.00

0.00

2

2

2

5.71

0.00

0

0

0

–4.73

–0.22

OTHER DEVELOPED

24.40

1 018

1 066

1 714

–2.31

4.85

6 440

6 524

6 287

–1.37

–0.36

32

10

286

–13.46

Japan

228

230

228

1.70

–0.08

6 408

6 506

6 234

–1.35

–0.42

0

0

0

9.87

0.00

South Africa

790

837

1 486

–3.22

5.84

32

18

53

–6.11

10.45

32

10

286

–13.54

24.42

164 346

175 242

220 558

6.06

2.46

53 178

56 601

74 999

9.22

3.13

38 733

42 741

61 682

10.70

3.88

1 328

1 378

1 654

2.42

1.96

1 823

2 028

2 271

16.32

1.27

59

86

88

5.42

–0.17

NORTH AFRICA

329

342

470

2.78

3.46

1 761

1 981

2 206

16.55

1.20

3

3

8

0.10

10.87

Algeria

100

101

101

0.00

–0.05

47

49

72

70.95

4.50

0

0

0

0.00

0.00

Egypt

116

124

202

7.11

5.23

1 072

1 257

1 373

21.83

1.00

3

3

3

0.00

0.00

998

1 037

1 184

2.31

1.42

61

48

65

11.06

3.98

55

83

80

5.98

–0.86

DEVELOPING AFRICA

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

113 683

124 159

159 104

8.01

2.68

7 287

7 378

8 718

0.69

1.46

38 054

42 134

61 094

10.81

3.93

Argentina

49 407

53 618

61 744

8.02

1.57

633

874

1 000

8.47

1.01

9 800

12 409

12 586

9.11

0.54

Brazil

55 381

59 641

82 594

7.92

3.48

157

26

340

–25.91

14.04

23 750

23 673

40 005

12.04

5.36

Chile

77

84

93

0.00

1.00

237

265

369

12.17

3.72

7

7

7

–3.38

0.00

Mexico

135

134

128

–0.54

–0.49

4 848

4 839

5 494

0.18

1.23

1

1

1

–3.69

0.36

Uruguay

796

960

1 500

29.71

4.84

4

3

9

24.37

11.69

658

781

1 194

42.32

4.58

ASIA and PACIFIC

49 335

49 705

59 799

2.43

1.93

44 068

47 195

64 011

11.05

3.44

620

520

500

6.03

–0.43

Bangladesh c China

229

239

245

–0.96

0.20

157

169

266

–5.70

5.10

0

0

0

0.00

0.00

29 981

29 277

34 594

1.78

1.65

30 878

33 652

48 418

15.94

4.11

480

416

394

9.86

–0.59

India

15 607

16 479

20 217

5.42

2.27

26

5

5

–2.49

0.00

35

5

5

8.23

0.00

Indonesia

739

651

690

–7.58

0.73

1 365

1 552

1 731

1.17

1.31

0

0

0

0.00

0.00

Iran, Islamic Republic of

157

169

273

–0.72

5.15

855

990

1 354

9.98

3.48

2

2

5

14.07

6.86

Korea

112

118

118

–1.61

0.00

1 294

1 250

1 446

–1.02

1.51

0

0

0

–1.84

0.00

Malaysia

0

0

0

0.00

0.45

580

533

521

–0.03

–0.25

27

28

13

–9.18

–8.24

Pakistan

437

454

624

–1.27

3.40

1 061

1 235

1 824

19.80

4.40

3

0

0

9.77

0.00

0

0

0

0.00

0.00

2

2

2

–13.08

2.56

0

0

0

46.58

0.00

764

892

1 172

–1.56

2.83

1 762

1 738

2 089

10.75

2.15

2

2

0

–10.80

–12.82

Saudi Arabia Turkey

1 048

1 078

1 122

2.96

0.41

274

261

383

–2.01

4.50

18

34

18

–3.17

–6.82

OECD

LEAST DEVELOPED COUNTRIES (LDC)

120 091

123 904

138 623

0.97

1.21

34 531

30 982

31 280

0.36

–0.21

36 288

35 024

30 479

0.99

–1.34

NON-OECD

179 700

191 881

244 561

6.32

2.58

45 600

49 070

66 208

10.94

3.34

40 444

45 028

67 009

9.94

4.08

For notes, see end of the table.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

179

ANNEX A

Table A.11. Oilseed projections (cont.) Growthb (%)

CONSUMPTION (kt) Crop yeara

Average 2005-07 est.

2008

2017

2.05

266 725

276 104

338 958

4.47

2.20

1.66

113 195

115 920

137 305

2.07

1.76

1.05

1.49

55 376

57 566

66 960

1.32

1.61

8 939

0.58

4.34

4 978

5 167

7 866

0.93

4.69

57 074

63 479

1.11

1.14

50 398

52 399

59 094

1.37

1.25

42 169

41 562

49 644

1.77

1.73

39 566

39 127

47 143

1.89

1.81

40 941

40 292

48 268

1.80

1.76

38 451

37 970

45 886

1.93

1.84

13 521

14 250

18 348

11.88

2.82

11 190

11 950

15 657

11.71

3.02

Russian Federation

7 083

7 273

9 128

11.16

2.57

6 551

6 707

8 508

11.37

2.69

Ukraine

5 094

5 567

7 509

12.30

3.32

3 731

4 302

6 009

11.96

3.70

582

759

832

–0.97

0.83

569

750

822

–0.87

0.84 0.84

WORLD DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS

OCEANIA DEVELOPED Australia

Average 2005-07 est.

2008

2017

305 338

316 885

382 983

4.22

125 445

127 253

148 955

1.96

61 625

63 095

72 418

5 976

6 021

55 649

Growthb (%)

DOMESTIC CRUSH (kt)

1998-2007

2008-17

1998-2007

2008-17

577

754

827

–0.99

0.83

565

745

818

–0.88

New Zealand

5

5

5

2.20

0.02

4

4

4

1.49

0.00

OTHER DEVELOPED

7 548

7 587

7 714

–1.02

0.23

6 494

6 528

6 724

–1.24

0.38

6 754

6 742

6 461

–0.81

–0.42

5 780

5 759

5 522

–1.05

–0.41

794

845

1 253

–2.76

4.37

714

769

1 202

–2.76

4.94

179 893

189 632

234 028

6.04

2.30

153 529

160 184

201 653

6.55

2.51

AFRICA

3 071

3 320

3 837

8.76

1.60

2 288

2 508

2 860

9.67

1.45

NORTH AFRICA

2 067

2 319

2 668

13.14

1.55

1 756

1 974

2 206

13.08

1.23

147

149

172

5.73

1.62

115

115

126

3.60

0.95

1 161

1 378

1 572

19.19

1.46

1 045

1 239

1 402

19.19

1.37

1 004

1 001

1 169

2.58

1.72

532

534

654

2.12

2.23

Japan South Africa DEVELOPING

Algeria Egypt SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

83 400

89 647

106 800

6.18

1.90

77 486

81 063

96 988

6.10

1.95

Argentina

40 047

42 022

50 189

7.83

1.84

39 557

41 350

49 114

8.25

1.82

Brazil

32 568

36 309

42 978

5.28

1.95

29 260

30 694

37 060

4.33

2.14

Chile

307

342

455

8.50

3.17

276

308

406

8.50

3.08

4 982

4 969

5 620

0.14

1.19

4 371

4 274

4 812

0.69

1.17

130

175

308

15.16

6.23

112

152

281

16.91

6.75

93 423

96 665

123 391

5.84

2.68

73 755

76 612

101 806

6.96

3.11

Mexico Uruguay ASIA and PACIFIC Bangladesh c China

386

409

511

–2.97

2.49

347

367

451

–2.97

2.28

61 016

62 847

82 709

7.14

3.01

49 679

51 481

70 769

8.45

3.46

India

15 557

16 479

20 218

5.29

2.28

14 325

15 171

18 654

5.27

2.31

Indonesia

2 104

2 171

2 420

–2.50

1.20

5

5

5

–0.81

–0.07

Iran, Islamic Republic of

1 007

1 157

1 622

7.58

3.74

906

1 045

1 502

7.58

4.01

Korea

1 406

1 368

1 564

–1.08

1.39

992

936

1 117

–1.70

1.82

Malaysia

553

505

507

0.63

0.07

498

447

443

0.63

–0.08

Pakistan

1 501

1 679

2 446

8.44

4.16

1 351

1 518

2 265

8.44

4.43

2

2

2

–13.72

2.71

2

2

2

–10.93

2.86

2 552

2 621

3 254

6.11

2.40

1 826

1 804

2 304

4.28

2.71

1 303

1 305

1 487

1.91

1.46

949

955

1 080

1.02

1.38

OECD

119 405

120 425

139 060

1.19

1.49

107 914

109 630

128 055

1.35

1.59

NON-OECD

185 933

196 460

243 923

6.59

2.38

158 810

166 474

210 903

7.07

2.59

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC)

a) Beginning crop marketing year – see Glossary of Terms for definitions. b) Least-squares growth rate (see glossary). c) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384128100717

180

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.12. Oilseed meal projections Growtha (%)

PRODUCTION (kt) Marketing year

WORLD

Average 2005-07 2008 est.

2017

Growtha (%)

IMPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growtha (%)

EXPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

192 837

199 364

244 505

4.66

2.20

57 468

64 787

75 329

5.37

1.61

63 564

64 787

75 329

7.05

1.61

78 321

80 044

93 733

1.75

1.64

32 632

35 696

33 774

4.18

–0.59

12 681

12 372

15 495

5.17

2.02

42 671

44 006

50 772

1.25

1.52

3 112

3 093

2 872

6.27

–0.78

9 352

8 595

11 138

2.27

2.24

3 107

2 900

4 415

–0.66

4.69

1 452

1 672

1 576

7.13

–0.66

1 661

1 492

2 616

5.09

6.27

39 564

41 106

46 357

1.41

1.25

1 661

1 421

1 296

5.61

–0.93

7 692

7 103

8 522

1.70

1.27

26 039

25 709

30 994

1.90

1.83

24 825

27 446

24 541

2.80

–1.23

1 046

1 191

1 191

10.36

0.00

25 384

25 031

30 255

1.95

1.85

24 290

26 900

23 921

2.71

–1.29

855

1 000

1 000

12.35

0.00

4 850

5 447

6 972

11.91

2.88

1 378

1 449

1 778

12.92

2.44

2 274

2 580

3 160

21.84

2.06

Russian Federation

2 798

3 080

3 760

11.10

2.49

737

737

871

12.56

2.52

832

880

869

39.48

–0.69

Ukraine

1 565

1 853

2 588

12.53

3.70

90

104

135

34.38

2.95

1 290

1 546

2 137

16.58

3.58

334

438

468

–1.16

0.53

670

858

1 024

13.02

2.21

2

0

0

–0.75

0.00 0.00

DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS

OCEANIA DEVELOPED Australia

332

435

465

–1.19

0.53

538

713

878

13.79

2.62

2

0

0

–0.72

New Zealand

2

2

2

3.30

0.00

132

145

145

10.25

0.00

0

0

0

–5.42

0.00

OTHER DEVELOPED

4 427

4 445

4 527

–1.29

0.25

2 647

2 849

3 559

8.92

2.47

6

6

6

15.37

0.00

4 019

4 007

3 842

–1.31

–0.41

1 724

1 799

2 224

8.71

2.35

0

0

0

6.39

0.00

408

438

685

–1.21

4.94

923

1 050

1 334

9.63

2.66

6

6

6

17.24

0.00

114 516

119 320

150 772

7.06

2.56

24 835

29 091

41 555

6.54

3.81

50 884

52 415

59 833

7.24

1.50

AFRICA

1 678

1 850

2 108

10.70

1.45

2 613

3 021

4 797

6.26

5.03

34

35

27

–0.79

–2.75

NORTH AFRICA

1 303

1 473

1 648

14.58

1.24

2 405

2 758

4 452

6.14

5.24

4

6

4

0.00

–2.58

Algeria

73

73

79

4.40

0.95

665

676

1 016

11.66

4.43

0

0

0

0.00

0.00

Egypt

804

958

1 083

20.03

1.37

951

1 197

1 940

1.03

5.35

2

2

2

0.00

0.00

375

377

461

2.17

2.22

209

263

345

7.76

2.54

30

29

23

–0.89

–2.77

Japan South Africa DEVELOPING

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

59 029

61 392

73 420

6.68

1.95

5 463

6 070

8 694

6.04

4.14

44 589

46 234

53 328

7.42

1.59

Argentina

30 055

31 012

36 835

9.15

1.82

0

0

0

0.00

0.00

29 012

29 709

34 771

9.34

1.60

Brazil

22 455

23 585

28 462

4.77

2.13

147

111

230

–4.30

7.94

13 628

14 563

16 454

4.11

1.68

Chile

199

223

295

9.69

3.08

755

848

1 052

7.37

2.81

2

2

5

6.72

9.04

3 261

3 192

3 584

0.65

1.14

189

428

626

23.67

5.77

0

0

0

–54.00

18.22

Mexico Uruguay ASIA and PACIFIC

62

86

159

18.21

6.75

94

90

114

5.88

2.60

6

5

0

–11.97

–16.49

53 809

56 078

75 243

7.38

3.22

16 759

20 000

28 064

6.74

3.52

6 261

6 146

6 478

6.03

0.82 0.00

Bangladesh b China

208

220

270

–2.97

2.28

227

324

522

19.10

5.27

0

0

0

0.00

37 022

38 419

53 464

9.00

3.60

849

1 790

3 861

6.42

6.60

673

0

0

3.48

0.00

India

10 114

10 770

13 244

5.21

2.31

2

0

0

9.82

0.00

4 758

5 221

4 961

6.76

–0.28

Indonesia

1

2

2

–3.04

–0.07

2 403

2 655

3 458

8.95

2.82

10

10

10

–6.49

0.00

Iran, Islamic Republic of

701

810

1 164

7.82

4.01

776

984

926

8.94

–0.69

65

105

145

53.96

3.63

Korea

774

730

871

–1.67

1.82

2 013

2 202

2 286

4.87

0.74

0

0

0

0.00

0.00

Malaysia

393

352

350

0.66

–0.08

908

1 070

1 627

6.57

4.50

47

42

145

5.14

13.41

Pakistan

844

964

1 438

8.80

4.43

317

397

487

19.67

2.28

65

62

82

20.05

3.03

1

1

1

–13.82

0.00

710

808

1 110

3.45

3.55

0

0

0

0.00

0.00

1 035

1 062

1 356

6.29

2.71

1 022

1 049

1 799

6.32

5.76

76

91

273

30.56

11.85

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC) OECD NON-OECD

553

555

632

1.08

1.46

334

444

678

9.03

4.55

19

19

21

1.68

1.06

77 891

78 894

91 625

1.30

1.53

33 365

36 685

35 181

3.91

–0.42

10 442

9 842

12 567

3.59

2.15

114 946

120 471

152 880

7.51

2.62

24 103

28 102

40 148

6.98

3.78

53 122

54 945

62 762

7.58

1.50

For notes, see end of the table.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

181

ANNEX A

Table A.12. Oilseed meal projections (cont.) Growthb (%)

CONSUMPTION (kt) Marketing year

Average 2005-07 est.

2008

2017

1998-2007

2008-17

186 623

199 830

244 445

4.21

2.18

98 239

103 447

112 010

2.30

0.86

36 384

38 574

42 506

1.38

1.16

2 890

3 094

3 375

–0.33

0.98

33 494

35 480

39 131

1.53

1.17

49 808

51 973

54 344

2.46

0.36

48 809

50 940

53 176

2.46

0.34

3 956

4 316

5 590

9.11

3.23

2 703

2 937

3 762

8.48

3.37

375

410

586

7.05

3.95

1 002

1 296

1 491

6.72

1.65

Australia

867

1 148

1 343

6.28

1.85

New Zealand

134

148

148

10.10

0.00

7 090

7 288

8 079

1.93

1.18

Japan

5 767

5 806

6 066

1.25

0.53

South Africa

1 322

1 482

2 013

5.42

3.40

DEVELOPING

88 384

96 383

132 435

6.85

3.43

AFRICA

4 238

4 836

6 879

7.92

3.85

NORTH AFRICA

3 691

4 225

6 096

8.58

4.02

738

749

1 095

10.75

4.14

1 740

2 153

3 021

6.78

3.76

547

611

783

4.13

2.55

19 796

21 619

28 728

5.18

3.14

959

1 152

2 006

5.30

6.01

Brazil

9 002

9 670

12 238

6.27

2.56

Chile

946

1 069

1 342

7.72

2.85

3 449

3 625

4 210

1.18

1.70

151

171

273

12.61

5.11

64 350

69 928

96 829

7.33

3.49

WORLD DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED

OTHER DEVELOPED

Algeria Egypt SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN Argentina

Mexico Uruguay ASIA and PACIFIC Bangladesh

435

544

793

3.11

4.17

37 198

40 209

57 326

8.81

3.76

India

5 558

5 549

8 283

4.33

4.23

Indonesia

2 328

2 647

3 450

8.72

2.82

Iran, Islamic Republic of

1 388

1 690

1 945

7.48

1.56

Korea

2 772

2 934

3 157

2.43

1.02

Malaysia

1 254

1 381

1 832

4.37

3.02

Pakistan

1 096

1 293

1 842

10.73

3.90

711

808

1 111

3.38

3.55

1 974

2 019

2 882

5.61

3.84

869

980

1 289

3.26

3.00

100 758

105 822

114 239

2.04

0.82

85 865

94 008

130 207

7.38

3.53

Chinab

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC) OECD NON-OECD

a) Least-squares growth rate (see glossary). b) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384208071684

182

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.13. Vegetable oil projections Growtha (%)

PRODUCTION (kt) Marketing year

WORLD

Average 2005-07 2008 est.

2017

Growtha (%)

IMPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growtha (%)

EXPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

102 453

110 506

143 499

5.63

2.86

44 169

48 889

63 175

7.34

2.93

45 740

48 889

63 176

7.47

2.93

30 026

31 212

37 566

2.61

1.96

11 445

14 265

21 885

8.56

4.51

4 788

4 804

7 434

1.50

5.13

11 632

12 179

14 559

1.30

1.94

1 734

1 843

2 232

10.32

2.17

2 114

1 756

3 055

0.27

6.66

Canada

1 634

1 833

2 799

0.51

4.86

261

307

323

14.38

0.56

1 062

1 036

1 575

4.90

5.32

United States

9 998

10 346

11 760

1.43

1.34

1 473

1 536

1 909

9.98

2.47

1 052

720

1 479

–3.21

8.23

11 986

12 009

14 466

2.19

1.80

6 717

9 091

15 420

9.71

5.44

170

99

99

–30.79

0.00

11 711

11 723

14 156

2.22

1.82

6 344

8 694

15 007

9.67

5.61

71

0

0

–76.51

0.00

4 458

4 951

6 333

11.64

2.88

1 348

1 441

2 137

3.12

4.44

2 136

2 505

3 765

19.85

4.64

Russian Federation

2 523

2 787

3 367

11.72

2.37

649

649

635

–2.26

–0.09

614

859

1 155

25.22

3.90

Ukraine

1 613

1 837

2 569

11.58

3.72

284

352

727

24.68

7.97

1 462

1 586

2 518

18.74

5.01

222

292

322

–0.39

0.93

386

542

589

11.33

1.06

55

55

55

1.79

0.00 0.00

DEVELOPED NORTH AMERICA

EUROPE EU(27) CIS

OCEANIA DEVELOPED Australia

221

292

322

–0.37

0.93

224

380

427

7.60

1.49

55

55

55

1.78

New Zealand

1

0

0

0.64

0.00

162

162

162

18.30

0.00

0

0

0

–4.39

0.00

OTHER DEVELOPED

1 728

1 780

1 887

–0.77

0.68

1 260

1 349

1 507

7.05

1.26

311

388

461

5.82

1.90

1 530

1 567

1 553

–0.36

–0.06

583

611

713

6.19

1.72

251

333

358

5.09

0.79

198

213

333

–3.72

4.94

677

738

793

7.85

0.86

60

55

103

9.79

6.88

72 427

79 294

105 933

7.10

3.20

32 723

34 623

41 290

6.95

2.17

40 952

44 085

55 741

8.32

2.66

Japan South Africa DEVELOPING AFRICA

2 317

2 556

3 218

2.57

2.57

5 155

5 541

7 653

6.78

3.64

362

385

549

4.55

3.96

NORTH AFRICA

367

413

460

10.43

1.20

2 578

2 824

3 929

4.26

3.72

108

137

238

6.78

6.06

Algeria

39

39

43

1.96

0.95

598

645

900

7.38

3.70

54

69

144

49.71

8.05

Egypt

197

236

267

17.88

1.36

1 270

1 420

2 018

3.34

3.89

50

66

90

–7.34

3.44

1 949

2 143

2 758

1.49

2.81

2 577

2 717

3 724

9.84

3.56

254

247

312

4.29

2.59 1.47

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

17 616

18 904

23 438

5.74

2.35

2 970

3 204

4 370

4.84

3.86

11 046

11 451

12 885

7.33

Argentina

8 200

8 651

10 698

6.30

2.27

0

0

0

0.00

0.00

7 408

7 755

9 372

6.81

1.96

Brazil

5 749

6 053

7 324

5.09

2.14

95

74

31

–12.18

–7.52

2 383

2 296

1 367

7.76

–4.16

Chile

65

72

95

5.92

3.08

301

309

372

10.02

2.05

3

1

4

2.54

12.49

Mexico

926

922

1 114

1.19

1.96

590

616

618

3.28

0.79

40

43

43

–3.09

0.00

Uruguay

32

42

77

15.92

6.75

40

40

45

17.12

1.34

2

2

2

5.00

1.80

ASIA and PACIFIC

52 495

57 835

79 277

7.84

3.49

24 599

25 878

29 267

7.27

1.59

29 544

32 249

42 307

8.78

3.03

Bangladesh b China

132

139

171

–2.97

2.28

1 194

1 311

1 823

8.19

3.65

0

0

0

0.00

0.00

11 315

11 954

16 826

7.77

3.71

7 646

8 524

8 414

18.70

0.65

161

90

78

3.93

–1.75 0.00

India Indonesia

3 825

4 011

4 970

5.37

2.41

5 235

5 243

6 276

0.36

1.80

147

0

0

44.94

17 302

20 043

27 940

12.67

3.70

55

67

113

14.07

5.83

13 018

15 151

20 315

16.39

3.32

169

194

279

7.18

4.01

1 128

1 136

1 312

0.85

1.55

113

90

0

–10.07

–66.19 16.47

Iran, Islamic Republic of Korea

178

168

200

–1.61

1.81

521

540

561

7.28

0.57

4

6

28

–1.94

Malaysia

16 187

17 599

23 835

5.40

3.38

576

554

533

5.87

–0.43

14 275

15 100

19 903

5.17

3.05

Pakistan

412

454

677

8.57

4.43

1 778

1 828

2 067

2.68

1.35

117

90

0

72.27

–38.56

Saudi Arabia

0

0

0

–5.94

0.00

411

417

631

8.12

4.56

9

9

9

3.34

–0.12

621

602

775

2.40

2.80

957

959

1 135

8.23

2.06

87

35

101

2.52

11.41

802

852

1 065

1.22

2.49

3 780

4 001

5 390

9.38

3.34

86

89

99

4.73

1.21

OECD

26 942

27 579

32 818

1.56

1.79

11 362

14 075

21 141

9.11

4.31

2 703

2 308

3 718

–4.50

5.73

NON-OECD

75 511

82 927

110 681

7.44

3.20

32 806

34 813

42 033

6.79

2.29

43 037

46 581

59 457

8.70

2.77

Turkey LEAST DEVELOPED COUNTRIES (LDC)

For notes, see end of the table.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

183

ANNEX A

Table A.13. Vegetable oil projections (cont.) Growtha (%)

CONSUMPTION (kt) Marketing year

Average 2005-07 est.

2008

2017

100 916

110 074

143 356

5.70

2.88

36 723

40 694

51 986

4.46

2.54

11 207

12 332

13 704

2.79

864

1 097

1 546

10 343

11 234

18 541 17 993

2017

15.3

16.3

19.2

4.46

1.77

27.4

30.2

37.7

4.07

2.28

1.09

33.7

36.4

37.4

1.79

0.20

–1.23

3.43

26.5

33.0

43.2

–2.23

2.59

12 158

3.18

0.83

34.5

36.8

36.8

2.17

–0.06

20 977

29 783

5.71

3.57

35.1

39.5

55.6

5.41

3.47

20 393

29 159

5.74

3.64

36.6

41.3

58.5

5.44

3.54

3 743

3 860

4 705

5.75

2.27

13.5

14.0

17.2

5.95

2.38

2 562

2 576

2 847

5.40

1.23

18.0

18.3

21.1

5.85

1.73

508

577

779

5.13

3.27

10.9

12.6

18.2

5.95

4.05

555

779

856

6.60

1.08

22.4

30.9

31.2

5.42

0.16

Australia

392

617

694

3.62

1.34

19.0

29.4

30.3

2.42

0.40

New Zealand

163

162

162

18.00

0.00

39.3

38.4

35.8

16.90

–0.78

OTHER DEVELOPED

2 678

2 746

2 938

1.82

0.78

15.2

15.6

16.7

1.44

0.80

1 869

1 851

1 915

0.88

0.40

14.6

14.5

15.2

0.76

0.58

809

896

1 023

4.25

1.53

16.8

18.3

20.2

3.16

1.13

64 193

69 380

91 371

6.45

3.08

12.2

12.8

15.0

5.00

1.77

AFRICA

7 094

7 666

10 316

5.32

3.30

7.9

8.2

9.0

2.93

1.07

NORTH AFRICA

2 826

3 072

4 149

4.79

3.33

12.0

12.6

14.4

2.88

1.54

585

615

799

5.83

2.90

17.5

17.9

20.4

4.35

1.46

1 414

1 591

2 195

5.10

3.56

19.0

20.7

24.7

3.29

1.95

SUB-SAHARAN AFRICA

4 268

4 594

6 166

5.68

3.29

6.5

6.6

7.2

3.11

0.90

LATIN AMERICA and CARIBBEAN

9 611

10 453

14 890

3.98

3.75

17.1

18.2

23.4

2.70

2.60

796

893

1 330

1.97

4.80

20.4

22.4

30.8

0.98

3.89

Brazil

3 563

3 720

5 980

3.20

4.63

18.9

19.3

28.0

1.83

3.47

Chile

363

380

462

9.53

2.19

22.0

22.6

25.3

8.40

1.29

1 476

1 495

1 689

2.15

1.56

14.3

14.2

14.7

1.29

0.58

70

80

120

18.34

4.49

20.9

23.8

34.6

18.22

4.14

ASIA and PACIFIC

47 488

51 260

66 165

7.19

2.91

12.5

13.1

15.3

5.92

1.80

Bangladesh b China

1 355

1 451

1 994

6.89

3.53

8.7

9.0

10.8

5.02

1.98

18 794

20 402

25 164

11.16

2.58

14.2

15.2

17.7

10.49

1.92

India

8 922

9 254

11 246

2.34

2.07

7.7

7.8

8.4

0.72

0.76

Indonesia

4 255

4 972

7 717

5.82

4.84

18.6

21.2

30.2

4.51

3.87

Iran, Islamic Republic of

1 179

1 241

1 592

3.33

2.78

16.8

17.2

19.6

2.30

1.45

695

702

733

4.40

0.58

14.4

14.4

14.8

3.89

0.39

Malaysia

2 555

2 913

4 440

8.42

4.65

97.8

107.8

143.9

6.45

3.18

Pakistan

2 059

2 190

2 732

2.72

2.48

12.8

13.1

13.8

0.84

0.59

401

408

622

8.11

4.64

16.6

16.1

20.5

5.59

2.60

1 501

1 508

1 802

5.39

2.02

20.3

19.9

21.5

4.01

0.92

4 471

4 756

6 354

7.57

3.24

6.4

6.5

7.0

5.18

0.99

OECD

35 584

39 377

50 203

4.30

2.52

29.3

32.1

39.3

3.68

2.06

NON-OECD

65 332

70 697

93 154

6.52

3.09

12.1

12.8

15.0

5.14

1.83

DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED

Japan South Africa DEVELOPING

Algeria Egypt

Argentina

Mexico Uruguay

Korea

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC)

2008-17

Average 2005-07 est.

2008

WORLD

1998-2007

Growtha (%)

PER CAPITA (kg)

1998-2007

2008-17

a) Least-squares growth rate (see glossary). b) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384215854413

184

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.14. Main policy assumptions for sugar markets Crop yeara

06/07

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

MAIN ASSUMPTIONS FOR SUGAR MARKETS ARGENTINA Tariff, sugar

ARS/t

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

Cane allocation to sugar

%

49.5

49.0

48.5

48.0

47.5

47.0

46.5

46.0

45.5

45.0

44.5

44.5

Tariff, raw sugar

%

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

Tariff, white sugar

%

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

35.0

Ethanol blending ratio with gazoline %

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

BRAZIL

CANADA Tariff, raw sugar

CAD/t

24.7

24.7

24.7

24.7

24.7

24.7

24.7

24.7

24.7

24.7

24.7

24.7

Tariff, white sugar

CAD/t

30.9

30.9

30.9

30.9

30.9

30.9

30.9

30.9

30.9

30.9

30.9

30.9

CHINAb TRQ sugar

kt

1 954

1 954

1 954

1 954

1 954

1 954

1 954

1 954

1 954

1 954

1 954

1 954

Tariff, in-quota, raw sugar

%

15.0

15.0

15.0

15.0

15.0

15.0

15.0

15.0

15.0

15.0

15.0

15.0

Tariff, in-quota, white sugar

%

50.0

50.0

50.0

50.0

50.0

50.0

50.0

50.0

50.0

50.0

50.0

50.0

Tariff, over-quota

%

50.0

50.0

50.0

50.0

50.0

50.0

50.0

50.0

50.0

50.0

50.0

50.0

EUc Reference price, white sugard

EUR/t

632

632

542

404

404

404

404

404

404

404

404

405

Effective quotae

kt rse

19 459

16 848

16 510

16 470

15 806

15 807

15 808

15 809

15 810

15 811

15 812

15 813

Quantity Limit

kt rse

1 431

1 431

1 431

1 431

1 431

1 431

1 431

1 431

1 431

1 431

1 431

1 431

Value Limit

000 EUR 534 426 534 426 534 426 534 426 534 426 534 426 534 426 534 426 534 426 534 426 534 426 534 426

Subsidised export limits

Tariff, raw sugar

EUR/t

339

339

339

339

339

339

339

339

339

339

339

339

Tariff, white sugar

EUR/t

419

419

419

419

419

419

419

419

419

419

419

419

INDIA Intervention price, sugar cane

INR/t

750

750

750

750

750

750

750

750

750

750

750

750

Applied tariff, raw sugar

%

60.0

60.0

60.0

60.0

60.0

60.0

60.0

60.0

60.0

60.0

60.0

60.0

%

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

%

40.0

40.0

40.0

40.0

40.0

40.0

40.0

40.0

40.0

40.0

40.0

40.0

Minimum stabilisation price, raw sugar

JPY/kg

152

152

152

152

152

152

152

152

152

152

152

152

Tariff, raw sugar

JPY/kg

71.8

71.8

71.8

71.8

71.8

71.8

71.8

71.8

71.8

71.8

71.8

71.8

Tariff, white sugar

JPY/kg

103.1

103.1

103.1

103.1

103.1

103.1

103.1

103.1

103.1

103.1

103.1

103.1

18.0

18.0

18.0

18.0

18.0

18.0

18.0

18.0

18.0

18.0

18.0

18.0

INDONESIA Tariff, white sugar JAMAICA Applied tariff, white sugar JAPAN

KOREA Tariff, raw sugar

%

MEXICO Mexico common external tariff, raw sugar

MXN/t

4 305

4 325

4 403

4 462

4 521

4 572

4 621

4 669

4 718

4 767

4 816

4 867

Mexico common external tariff, white sugar

MXN/t

4 305

4 325

4 403

4 462

4 521

4 572

4 621

4 669

4 718

4 767

4 816

4 867

RUSSIA Tariff, raw sugarf

%

66.6

84.8

95.0

85.8

66.3

53.9

42.6

45.5

41.5

40.5

41.0

43.9

Tariff, white sugarf

USD/t

48.5

67.1

79.1

71.7

53.2

39.3

31.4

32.5

28.1

28.0

28.5

29.9

For notes, see end of the table.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

185

ANNEX A

Table A.14. Main policy assumptions for sugar markets (cont.) Crop yeara

06/07

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

UNITED STATESc Loan rate, cane sugar

USD/t

397

397

397

397

397

397

397

397

397

397

397

397

Loan rate, beet sugar

USD/t

504.9

504.9

504.9

504.9

504.9

504.9

504.9

504.9

504.9

504.9

504.9

504.9

TRQ, raw sugar

kt rse

1 701

1 650

1 201

1 203

1 205

1 207

1 212

1 214

1 216

1 219

1 223

1 226

TRQ, refined sugar

kt rse

49

49

49

49

49

49

49

49

49

49

49

49

Raw sugar 2nd tier WTO tariff

USD/t

339

339

339

339

339

339

339

339

339

339

339

339

White sugar 2nd tier WTO tariff

USD/t

357

357

357

357

357

357

357

357

357

357

357

357

Raw sugar 2nd tier NAFTA tariff

USD/t

67

33

0

0

0

0

0

0

0

0

0

0

%

105.0

105.0

105.0

105.0

105.0

105.0

105.0

105.0

105.0

105.0

105.0

105.0

%

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

25.0

%

40.0

40.0

40.0

40.0

40.0

40.0

40.0

40.0

40.0

40.0

40.0

40.0

SOUTH AFRICA Tariff, raw sugar TANZANIA Applied tariff, white sugar VIETNAM Applied tariff, white sugar

a) Beginning crop marketing year. b) Refers to mainland only. c) In addition, price based special safeguard actions may apply. d) Reference price for consumers. e) Production that receives official support. Includes the 10 new member countries from May 2004, Bulgaria and Romania. f) Assumes a wholesale price target of USD 470 per tonne as the basis for setting the floating tariff duty. The source for tariffs (except United States and Russia) is AMAD. The source for Russia and United States tariffs is ERS, USDA. est: estimate. rse : raw sugar equivalent. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384227810354

186

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.15. World sugar projections (in raw sugar equivalent) Crop yeara

Average 02/0306/07

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

OECD Production

kt rse

39,783

36 558

35 876

35 765

35 533

35 601

35 306

36 022

36 366

36 653

36 871

37 047

Consumption

kt rse

40,280

40 911

41 072

41 202

41 022

41 175

41 249

41 539

41 824

42 139

42 464

42 728

Closing stocks

kt rse

17,373

16 887

16 789

16 776

16 768

16 669

16 197

15 991

15 872

15 873

15 921

16 164

Production

kt rse

110,890

129 481

130 610

133 043

134 872

136 321

138 209

141 017

142 735

145 772

148 742

151 997

Consumption

kt rse

105,108

117 474

123 657

126 728

129 105

130 709

132 746

135 997

138 647

141 218

143 504

146 055

Closing stocks

kt rse

50,127

66 667

68 490

69 351

69 611

69 746

69 770

69 524

68 324

67 464

67 153

67 281

Production

kt rse

150,674

166 039

166 487

168 808

170 405

171 922

173 515

177 039

179 101

182 425

185 613

189 044

Consumption

kt rse

145,389

158 385

164 729

167 930

170 126

171 884

173 995

177 535

180 472

183 357

185 968

188 782

Closing stocks

kt rse

67,710

83 554

85 279

86 127

86 379

86 415

85 967

85 515

84 197

83 337

83 074

83 445

Price, raw sugarb

USD/t

237.1

229.3

216.0

228.0

257.6

280.4

304.5

298.0

307.1

309.6

308.2

301.7

Price, white sugarc USD/t

291.2

289.1

268.1

280.8

317.8

351.8

374.5

371.3

384.9

385.0

383.4

379.1

NON-OECD

WORLD

a) Beginning crop marketing year. b) Raw sugar world price, ICE Inc. No. 11, f.o.b. stowed Caribbean port (including Brazil), bulk spot price, October/September. c) Refined sugar price, London No. 5 , f.o.b. Europe, spot, October/September. est: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384250803044

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

187

ANNEX A

Table A.16. World sugar projections (in raw sugar equivalent) Growthb (%)

PRODUCTION (kt) Crop yeara

WORLD

Average 2005-07 2008 est.

2017

Growthb (%)

IMPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

EXPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

161 564

166 487

189 044

2.45

1.39

45 333

48 656

59 657

1.29

2.05

49 123

48 656

59 657

2.60

2.05

41 526

39 211

42 052

–0.34

0.87

14 428

14 697

15 251

–1.86

0.11

10 181

7 463

8 784

–3.93

1.84

7 456

7 865

8 052

–0.72

0.48

3 671

3 659

4 871

3.82

2.78

334

257

257

11.60

0.00

113

94

141

1.19

4.73

1 324

1 310

1 569

1.76

1.84

65

30

30

17.26

0.00

7 344

7 771

7 912

–0.75

0.42

2 348

2 348

3 302

5.18

3.25

269

227

227

10.86

0.00

19 527

17 500

16 923

–1.79

–0.49

4 272

4 258

5 560

–2.37

2.62

4 116

1 876

1 981

–10.37

0.28

18 554

16 510

15 813

–2.16

–0.58

3 164

3 231

4 692

–4.12

3.64

3 590

1 349

1 435

–13.55

0.34

6 283

5 999

8 348

6.71

3.87

4 630

5 034

2 965

–4.99

–6.02

1 074

1 128

1 505

7.69

3.89

Russian Federation

3 229

3 111

4 026

9.86

2.87

3 287

3 455

2 351

–6.40

–4.15

238

201

294

–3.26

4.10

Ukraine

2 332

2 202

3 066

3.09

3.81

53

361

49

–24.68

–22.94

97

198

601

–6.76

15.49

4 899

4 358

5 098

–1.03

2.33

237

259

276

0.14

0.70

3 598

3 096

4 014

–0.98

3.22

4 899

4 358

5 098

–1.03

2.33

7

5

5

9.89

0.00

3 577

3 077

3 995

–0.99

3.24

New Zealand

0

0

0

0.00

0.00

230

254

271

–0.05

0.71

21

19

19

1.01

0.00

OTHER DEVELOPED

3 361

3 489

3 631

–0.22

0.35

1 618

1 488

1 580

–1.36

0.30

1 060

1 106

1 026

–3.44

–1.87

DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS

OCEANIA DEVELOPED Australia

Japan South Africa DEVELOPING

903

940

939

0.72

0.00

1 433

1 287

1 321

–1.29

–0.13

4

2

2

–2.99

0.00

2 457

2 549

2 692

–0.55

0.48

184

201

258

–1.39

2.80

1 055

1 104

1 024

–3.46

–1.87

120 039

127 276

146 992

3.56

1.54

30 906

33 960

44 405

2.98

2.82

38 942

41 193

50 873

4.62

2.09

AFRICA

7 669

8 244

9 460

2.60

1.58

7 700

8 049

10 904

3.60

3.16

2 685

2 986

3 558

4.98

1.81

NORTH AFRICA

2 321

2 320

2 835

2.39

2.21

3 564

3 833

4 723

1.55

2.24

281

292

333

7.30

1.36

0

0

0

0.00

0.00

1 138

1 186

1 382

2.05

1.83

21

10

10

40.12

0.00

1 849

1 840

2 243

3.68

2.04

973

1 067

1 489

–1.66

3.60

165

184

224

0.72

2.04

5 041

5 534

6 213

2.59

1.38

4 135

4 225

6 150

5.70

3.87

2 256

2 479

2 977

4.08

1.93

51 647

51 646

65 346

3.73

2.56

1 963

1 868

1 870

3.93

–0.25

25 571

25 393

36 059

5.04

3.74

2 488

2 678

3 278

5.34

2.55

0

1

0

–12.10

–17.32

643

775

1 205

18.06

4.79

Brazil

32 226

31 475

41 467

6.69

2.91

0

0

0

0.00

0.00

19 076

18 831

27 323

9.29

4.00

Chile

402

412

540

–2.76

3.34

286

292

261

3.05

–1.59

1

0

0

–39.74

0.00

5 566

5 948

6 889

1.56

1.69

262

210

18

31.68

–28.51

450

711

1 640

–3.91

7.60

7

10

10

–13.13

0.00

107

116

118

–0.15

0.06

5

6

6

1.59

0.00

59 874

66 400

71 374

3.49

0.72

21 023

23 915

31 213

2.75

2.83

10 612

12 745

11 199

3.51

–2.03 0.00

Algeria Egypt SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN Argentina

Mexico Uruguay ASIA and PACIFIC Bangladesh c China

158

152

164

0.22

0.95

980

1 091

1 396

3.73

2.57

0

0

0

0.00

12 198

14 123

15 694

5.52

1.20

1 233

2 811

3 800

7.86

3.22

189

128

133

–8.84

0.41

India

26 759

28 547

28 970

3.93

0.12

13

65

1 257

–48.68

33.90

2 092

2 200

33

37.80

–38.27

Indonesia

2 567

2 791

3 659

6.34

3.16

1 515

1 862

2 143

–2.66

1.41

3

1

1

–20.00

0.00

Iran, Islamic Republic of

1 290

1 448

1 857

5.21

2.87

805

877

776

–4.57

–1.37

0

0

0

0.00

0.00

0

0

0

0.00

0.00

1 647

1 841

2 142

1.98

1.59

341

309

407

0.38

3.36

Malaysia

63

67

79

–7.42

2.26

1 440

1 554

1 932

2.38

2.37

400

424

530

5.28

2.43

Pakistan

3 722

4 343

5 163

1.80

1.97

794

412

574

25.30

3.53

38

43

52

–25.92

1.97

0

0

0

0.00

0.00

1 229

1 263

1 538

7.33

2.27

412

417

492

17.10

1.83

2 129

2 206

2 493

–2.61

1.51

26

27

70

16.99

7.60

66

22

25

–32.47

1.51

2 951

3 239

3 949

4.38

2.29

3 512

3 821

5 283

2.41

3.26

615

708

1 011

10.97

3.13

Korea

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC) OECD NON-OECD

37 609

35 876

37 047

–1.11

0.45

10 882

10 911

13 768

0.47

2.21

8 405

5 813

7 845

–5.75

3.21

123 955

130 610

151 997

3.73

1.63

34 426

37 718

45 819

1.54

2.00

40 652

42 821

51 787

4.91

1.88

For notes, see end of the table.

188

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.16. World sugar projections (in raw sugar equivalent) (cont.) Growthb (%)

CONSUMPTION (kt) Crop yeara

Growthb (%)

PER CAPITA (kg)

Average 2005-07 est.

2008

2017

1998-2007

2008-17

Average 2005-07 est.

2008

2017

153 272

164 729

188 782

2.25

1.50

23.2

24.4

45 967

46 555

48 298

0.33

0.41

34.3

34.5

10 742

11 152

12 509

0.46

1.30

32.4

Canada

1 365

1 384

1 680

1.34

2.09

United States

9 377

9 768

10 829

0.34

20 087

20 024

20 323

0.36

18 647

18 569

18 784

0.31

0.13

37.9

37.6

37.7

0.00

0.03

9 839

9 944

9 761

0.12

–0.20

35.5

35.9

35.6

0.32

–0.10

Russian Federation

6 350

6 353

6 077

0.09

–0.46

44.6

45.1

45.1

0.54

0.04

Ukraine

2 241

2 337

2 474

0.43

0.57

48.1

51.0

57.9

1.25

1.36

1 423

1 460

1 551

2.56

0.70

57.6

57.9

56.6

1.38

–0.22

1 192

1 225

1 299

2.65

0.68

57.9

58.3

56.8

1.46

–0.26

231

235

252

2.08

0.76

55.8

55.7

55.7

0.98

–0.02

3 875

3 975

4 154

–0.36

0.50

22.0

22.5

23.6

–0.74

0.52

2 284

2 331

2 259

–0.79

–0.33

17.9

18.2

18.0

–0.91

–0.15

WORLD DEVELOPED NORTH AMERICA

EUROPE EU(27) CIS

OCEANIA DEVELOPED Australia New Zealand OTHER DEVELOPED Japan South Africa

1998-2007

2008-17

25.3

1.02

0.39

35.0

–0.06

0.15

32.9

34.1

–0.54

0.41

41.9

41.7

46.9

0.35

1.25

1.18

31.3

32.0

32.7

–0.67

0.29

0.16

38.0

37.7

37.9

0.06

0.06

1 591

1 644

1 895

0.32

1.58

33.0

33.7

37.4

–0.78

1.17

DEVELOPING

107 306

118 174

140 484

3.15

1.90

20.4

21.8

23.0

1.70

0.59

AFRICA

12 568

13 241

16 587

2.99

2.39

14.0

14.1

14.5

0.60

0.16

5 563

5 788

7 074

2.11

2.13

23.6

23.6

24.6

0.19

0.34

Algeria

1 103

1 153

1 348

1.90

1.68

33.1

33.6

34.4

0.42

0.24

Egypt

2 599

2 678

3 384

2.33

2.49

35.0

34.9

38.1

0.51

0.88

6 842

7 282

9 318

3.92

2.60

10.4

10.5

10.9

1.35

0.22

26 367

27 868

30 954

2.51

1.18

46.9

48.4

48.5

1.23

0.03

1 737

1 815

2 036

2.05

1.24

44.4

45.6

47.2

1.07

0.34

Brazil

11 481

12 546

14 116

3.19

1.32

60.9

65.1

66.0

1.82

0.16

Chile

695

723

803

0.58

1.13

42.2

43.0

44.0

–0.55

0.23

5 536

5 476

5 297

2.58

–0.22

53.8

52.0

46.1

1.71

–1.20

NORTH AFRICA

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN Argentina

Mexico

116

120

122

0.23

0.06

34.8

35.9

35.3

0.10

–0.29

ASIA and PACIFIC

Uruguay

67 397

76 013

91 769

3.47

2.08

17.7

19.5

21.3

2.21

0.97

Bangladesh

1 130

1 216

1 526

2.78

2.39

7.2

7.5

8.2

0.91

0.83

Chinac

13 366

16 803

19 252

6.10

1.50

10.1

12.5

13.5

5.43

0.84

India

22 175

25 494

31 532

3.15

2.41

19.2

21.5

23.6

1.52

1.11

Indonesia

4 349

4 559

5 726

3.06

2.48

19.0

19.5

22.4

1.75

1.51

Iran, Islamic Republic of

2 165

2 257

2 620

1.69

1.57

30.8

31.3

32.2

0.66

0.24

Korea

1 366

1 494

1 715

4.54

1.33

28.3

30.7

34.7

4.04

1.15

Malaysia

1 129

1 207

1 476

1.60

2.16

43.2

44.7

47.8

–0.37

0.69

Pakistan

4 325

4 607

5 501

3.41

1.91

26.9

27.6

27.8

1.53

0.02

767

837

1 038

3.66

2.46

31.7

33.1

34.1

1.14

0.41

2 090

2 184

2 495

1.50

1.53

28.3

28.8

29.8

0.11

0.42

5 916

6 312

8 089

3.37

2.62

8.4

8.6

9.0

0.98

0.38

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC) OECD NON-OECD

40 586

41 072

42 728

0.78

0.46

33.4

33.5

33.4

0.17

0.00

112 686

123 657

146 055

2.81

1.83

20.9

22.3

23.6

1.44

0.57

a) Beginning crop marketing year – see the Glossary of Terms for definitions. b) Least-squares growth rate (see glossary). c) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384374482442

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

189

ANNEX A

Table A.17. Main policy assumptions for meat markets Average 2002-06

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

7

15

15

15

15

15

15

15

15

15

15

15 76

ARGENTINA Beef export tax

%

CANADA Beef tariff-quota

76

76

76

76

76

76

76

76

76

76

76

in-quota tariff

%

0

0

0

0

0

0

0

0

0

0

0

0

out-of-quota tariff

%

27

27

27

27

27

27

27

27

27

27

27

27

kt pw

45

Poultry meat tariff-quota

kt pw

45

45

45

45

45

45

45

45

45

45

45

in-quota tariff

%

2

2

2

2

2

2

2

2

2

2

2

2

out-of-quota tariff

%

197

197

197

197

197

197

197

197

197

197

197

197

Beef basic priceb, c, d

EUR/kg dw

2.22

2.22

2.22

2.22

2.22

2.22

2.22

2.22

2.22

2.22

2.22

2.23

Beef buy-in priced, e

EUR/kg dw

1.56

1.56

1.56

1.56

1.56

1.56

1.56

1.56

1.56

1.56

1.56

1.56

Pig meat basic pricec

EUR/kg dw

1.51

1.51

1.51

1.51

1.51

1.51

1.51

1.51

1.51

1.51

1.51

1.51

Sheep meat basic price

EUR/kg dw

5.04

5.04

5.04

5.04

5.04

5.04

5.04

5.04

5.04

5.04

5.04

5.04

Sheep basic ratef

EUR/head

21.00

21.00

21.0

21.0

21.0

21.0

21.0

21.0

21.0

21.0

21.0

21.0

Male bovine premiumg

EUR/head

137

0

0

0

0

0

0

0

0

0

0

0

Adult bovine slaughter premiumh EUR/head

61

0

0

0

0

0

0

0

0

0

0

0

Calf slaughter premium

EUR/head

30

0

0

0

0

0

0

0

0

0

0

0

Suckler cow premium

EUR/head

120

0

0

0

0

0

0

0

0

0

0

0

Beef tariff-quota

kt pw

216

216

216

216

216

216

216

216

216

216

216

216

Pig meat tariff-quota

kt pw

167

167

167

167

167

167

167

167

167

167

167

167

Poultry meat tariff-quota

kt pw

623

623

623

623

623

623

623

623

623

623

623

623

Sheep meat tariff-quota

kt cwe

285

285

285

285

285

285

285

285

285

285

285

285

Beefi

kt cwe

990

990

990

990

990

990

990

990

990

990

990

990

Pig meati

kt cwe

588

588

588

588

588

588

588

588

588

588

588

589

Poultry meat

kt cwe

431

431

431

431

431

431

431

431

431

431

431

431

EUROPEAN UNIONa

Subsidised export limitsc

JAPANj Beef stabilisation prices Upper price

JPY/kg dw

1 010

1 010

1 010

1 010

1 010

1 010

1 010

1 010

1 010

1 010

1 010

1 010

Lower price

JPY/kg dw

780

780

780

780

780

780

780

780

780

780

780

780

39

39

39

39

39

39

39

39

39

39

39

39

Beef tariff

%

Pig meat stabilisation prices Upper price

JPY/kg dw

480

480

480

480

480

480

480

480

480

480

480

480

Lower price

JPY/kg dw

365

365

365

365

365

365

365

365

365

365

365

365

Pig meat import systemk Tariff

%

Standard import price

JPY/kg dw

4

4

4

4

4

4

4

4

4

4

4

4

410

410

410

410

410

410

410

410

410

410

410

410

%

7

7

7

7

7

7

7

7

7

7

7

7

Beef tariff

%

40

40

40

40

40

40

40

40

40

40

40

40

Beef mark-up

%

0

0

0

0

0

0

0

0

0

0

0

0

Pig meat tariff

%

22

22

22

22

22

22

22

22

22

22

22

22

Poultry meat tariff

%

21

21

21

21

21

21

21

21

21

21

21

21

Pig meat tariff

%

45

45

45

45

45

45

45

45

45

45

45

45

Pig meat NAFTA tariff

%

0

0

0

0

0

0

0

0

0

0

0

0

Poultry meat tariff-quota

kt pw

41

41

41

41

41

41

41

41

41

41

41

41

Poultry meat tariff KOREA

MEXICO

in-quota tariff

%

50

50

50

50

50

50

50

50

50

50

50

50

out-of-quota tariff

%

229

228

228

228

228

228

228

228

228

228

228

228

For notes, see end of the table.

190

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.17. Main policy assumptions for meat markets (cont.) Average 2002-06

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

RUSSIA Beef tariff-quota

459

468

474

480

480

480

480

480

480

480

480

480

in-quota tariff

%

15

15

15

15

15

15

15

15

15

15

15

15

out-of-quota tariff

%

54

52

50

40

40

40

40

40

40

40

40

40

467

485

494

502

502

502

502

502

502

502

502

502 15

Pigmeat tariff-quota

kt pw

kt pw

in-quota tariff

%

15

15

15

15

15

15

15

15

15

15

15

out-of-quota tariff

%

76

55

60

60

60

60

60

60

60

60

60

60

844

1 171

1 212

1 252

1 252

1 252

1 252

1 252

1 252

1 252

1 252

1 252

25

25

25

25

25

25

25

25

25

25

25

25 697

Poultry meat tariff-quota in-quota tariff

kt pw %

UNITED STATES Beef tariff-quota

697

697

697

697

697

697

697

697

697

697

697

in-quota tariff

kt pw %

5

5

5

5

5

5

5

5

5

5

5

5

out-of-quota tariff

%

26

26

26

26

26

26

26

26

26

26

26

26

Beef tariff

%

18

16

16

16

16

16

16

16

16

16

16

16

Pig meat tariff

%

16

16

16

16

16

16

16

16

16

16

16

16

Sheep meat tariff

%

16

15

15

15

15

15

15

15

15

15

15

15

Poultry meat tariff

%

19

19

19

19

19

19

19

19

19

19

19

19

Beef tariff

%

102

100

100

100

100

100

100

100

100

100

100

100

Pig meat tariff

%

102

100

100

100

100

100

100

100

100

100

100

100

Sheep meat tariff

%

94

92

92

92

92

92

92

92

92

92

92

92

Poultry meat tariff

%

90

87

87

87

87

87

87

87

87

87

87

87

Eggs tariff

%

150

150

150

150

150

150

150

150

150

150

150

150

CHINA

INDIA

SOUTH AFRICA Sheepmeat tariff-quota

6

6

6

6

6

6

6

6

6

6

6

6

in-quota tariff

kt pw %

20

20

20

20

20

20

20

20

20

20

20

20

out-of-quota tariff

%

103

96

96

96

96

96

96

96

96

96

96

96

a) EU farmers also benefit from the Single Farm Payment (SFP) Scheme, which provides flat-rate payments independent from current production decisions and market developments. For the accession countries, payments are phased in with the assumption of maximum top-ups from national budgets up to 2011 through the Single Area Payment (SAP) and from 2012 through the SFP. Due to modulation, between 2.7% and 4.6% of the total SFP will go to rural development spending rather than directly to the farmers in the 15 former member states. From 2013, 4.6% of the total SFP will go to rural development spending in the accession countries. b) Price for R3 grade male cattle. c) Year beginning 1 July, except for E10 which is calendar year. Poland has a commitment on export subsidies on unspecified meat. d) Ending 1 July 2002, replaced by basic price for storage. e) Starting 1 July 2002. f) A supplementary payment of 7 euro per head is provided for Less Favoured Areas. g) Weighted average of all bull and steers payments. h) Includes national envelopes for beef. i) Includes live trade. j) Year beginning 1 April. k) Pig carcass imports. Emergency import procedures triggered from November 1995 to March 1996, from July 1996 to June 1997, from August 2001 to March 2002, from August 2002 to March 2003 and from August 2003 to March 2004. Note: The source for tariffs and Tariff Rate Quotas (excluding Russia) is AMAD (Agricultural market access database). The tariff and TRQ data are based on Most Favoured Nation rates scheduled with the WTO and exclude those under preferential or regional agreements, which may be substantially different. Tariffs are simple averages of several product lines. Specific rates are converted to ad valorem rates using world prices in the Outlook. Import quotas are based on global commitments scheduled in the WTO rather than those allocated to preferential partners under regional or other agreements. For Mexico, the NAFTA in-quota tariff on poultry meat is zero and the tariffrate quota is unlimited from 2003. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384415613442

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

191

ANNEX A

Table A.18. World meat projections Calendar yeara

Average 2002-06

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

OECDb BEEF AND VEALc Production

kt cwe

26 465

26 872

26 576

26 287

26 280

26 448

26 500

26 585

26 759

26 900

27 075

27 200

Consumption

kt cwe

26 771

27 081

26 967

26 910

26 986

27 198

27 268

27 389

27 551

27 691

27 860

28 028

Ending stocks

kt cwe

1 014

1 010

1 008

1 023

1 029

1 031

1 041

1 043

1 048

1 068

1 077

1 051

Per capita consumption kg rwt

15.6

15.5

15.4

15.3

15.2

15.3

15.2

15.2

15.3

15.3

15.3

15.3

Price, Australiad

AUD/100 kg dw

295

282

312

302

296

289

276

288

300

308

319

333

Price, EUe

EUR/100 kg dw

257

276

275

279

281

283

286

289

295

300

303

306

Price, USAf

USD/100 kg dw

291

327

327

323

325

323

311

317

321

323

323

329

Price, Argentinag

USD/100 kg dw

121

152

143

142

139

138

136

138

143

144

148

147

PIG MEATh Production

kt cwe

37 113

38 140

37 939

37 890

37 958

38 130

38 037

38 166

38 709

38 979

39 455

39 797

Consumption

kt cwe

35 842

36 661

36 396

36 253

36 381

36 590

36 523

36 693

37 170

37 434

37 876

38 194

Ending stocks

kt cwe

801

811

809

827

817

834

862

827

838

843

840

840

Per capita consumption kg rwt

23.3

23.4

23.1

22.9

22.9

22.9

22.8

22.8

22.9

23.0

23.2

23.3

Price, EUi

EUR/100 kg dw

131

131

149

150

150

148

151

150

148

151

148

152

Price, USAj

USD/100 kg dw

137

143

143

156

172

177

165

170

167

163

161

159

POULTRY MEAT Production

kt rtc

36 287

37 785

38 632

39 055

39 403

39 682

39 980

40 532

40 865

41 283

41 781

42 380

Consumption

kt rtc

34 590

36 081

36 945

37 299

37 696

37 848

38 088

38 622

38 984

39 370

39 833

40 404

Ending stocks

kt rtc

1 128

1 081

1 125

1 124

1 124

1 122

1 120

1 118

1 116

1 115

1 113

1 111

Per capita consumption kg rwt

25.4

26.0

26.5

26.6

26.8

26.7

26.8

27.0

27.2

27.3

27.5

27.8

Price, EUk

EUR/100 kg rtc

102

112

116

119

121

118

116

120

121

123

124

125

Price, USAl

USD/100 kg rtc

144

168

167

161

166

169

164

168

170

172

174

177

SHEEP MEAT Production

kt cwe

2 762

2 904

2 802

2 762

2 748

2 751

2 749

2 749

2 751

2 750

2 750

2 748

Consumption

kt cwe

2 417

2 482

2 465

2 404

2 392

2 381

2 366

2 360

2 356

2 349

2 345

2 340

Ending stocks

kt cwe

522

533

514

514

514

514

514

514

514

514

514

518

Per capita consumption kg rwt

1.8

1.8

1.8

1.7

1.7

1.7

1.7

1.7

1.6

1.6

1.6

1.6

Price, Australiam

AUD/100 kg dw

346

323

327

328

332

337

341

345

349

353

357

361

Price, Australian

AUD/100 kg dw

172

130

132

140

141

142

143

144

146

147

148

150

Price, New Zealando

NZD/100 kg dw

379

319

313

345

366

380

386

392

399

405

420

436

66.1

66.8

66.8

66.5

66.6

66.6

66.4

66.7

67.0

67.2

67.6

68.1

TOTAL MEAT Per capita consumption kg rwt Non-OECD BEEF AND VEAL Production

kt cwe

36 955

40 534

41 342

42 663

44 160

45 481

46 430

47 439

48 704

49 972

51 096

52 201

Consumption

kt cwe

36 452

40 042

41 150

42 184

43 580

44 867

45 762

46 733

47 996

49 255

50 388

51 489

Per capita consumption kg rwt

4.9

5.1

5.2

5.3

5.4

5.5

5.5

5.5

5.6

5.7

5.8

5.8

Ending stocks

kt cwe

66

60

60

58

58

58

58

58

58

58

58

58

Production

kt cwe

63 172

64 936

66 541

69 180

71 326

72 774

74 903

77 234

79 132

81 016

83 129

85 452

Consumption

kt cwe

63 946

65 916

67 826

70 503

72 593

73 969

76 054

78 400

80 307

82 193

84 341

86 681

Per capita consumption kg rwt

9.5

9.4

9.6

9.8

10.0

10.0

10.2

10.4

10.5

10.6

10.7

10.9

Ending stocks

48

51

51

51

51

51

51

51

51

51

51

51

PIG MEAT

kt cwe

POULTRY MEAT Production

kt rtc

43 596

47 908

49 715

51 650

52 940

53 937

55 625

57 314

58 959

60 403

61 938

63 327

Consumption

kt rtc

45 117

49 419

51 352

53 401

54 648

55 772

57 519

59 223

60 839

62 316

63 888

65 306

Per capita consumption kg rwt

7.6

8.0

8.2

8.4

8.5

8.5

8.7

8.8

9.0

9.1

9.2

9.3

Ending stocks

222

158

157

162

161

161

163

166

169

169

169

169

kt rtc

For notes, see end of the table.

192

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.18. World meat projections (cont.) Calendar yeara

Average 2002-06

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

SHEEP MEAT Production

kt cwe

10 935

10 828

11 022

11 319

11 575

11 831

12 084

12 329

12 583

12 839

13 100

13 358

Consumption

kt cwe

11 259

11 230

11 484

11 793

12 052

12 326

12 614

12 898

13 197

13 503

13 792

14 080

Per capita consumption kg rwt

1.9

1.8

1.8

1.9

1.9

1.9

1.9

1.9

1.9

2.0

2.0

2.0

kt cwe

5

5

5

5

5

5

5

5

5

5

5

5

Per capita consumption kg rwt

23.8

24.3

24.7

25.3

25.7

25.9

26.3

26.6

27.0

27.3

27.7

28.0

Ending stocks TOTAL MEAT

a) Year ending 30 September fo New Zealand b) Excludes Iceland but includes the 8 EU members that are not members of the OECD. Carcass weight to retail weight conversion factors of 0.7 for beef and veal, 0.78 for pig meat and 0.88 for sheep meat. Rtc to retail weight conversion factor 0.88 for poultry meat. c) Do not balance due to statistical differences in New Zealand. d) Weighted average price of cows 201-260 kg, steers 301-400 kg, yearling < 200 kg dw. e) Producer price. f) Choice steers, 1100-1300 lb lw, Nebraska - lw to dw conversion factor 0.63. g) Buenos Aires wholesale price linier, young bulls. h) Do not balance due to consumption in Canada which excludes non-food parts. i) Pig producer price. j) Barrows and gilts, No. 1-3, 230-250 lb lw, Iowa/South Minnesota – lw to dw conversion factor 0.74. k) Weighted average farmgate live fowls, top quality, (lw to rtc conversion of 0.75), EU15 starting in 1995. l) Wholesale weighted average broiler price 12 cities. m) Saleyard price, lamb, 16-20 kg dw. n) Saleyard price, wethers, < 22 kg dw. o) Lamb schedule price, all grade average. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384434060610

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

193

ANNEX A

Table A.19. Beef and veal projectionsa PRODUCTIONc (kt) Calendar yearb

WORLD DEVELOPED NORTH AMERICA

Average 2005-07 2008 est.

2017

IMPORTSf (kt)

Average 19982008-17 2005-07 2008 2007 est.

Growthd (%)

2017

EXPORTSf (kt)

Average 19982008-17 2005-07 2008 2007 est.

Growthd (%)

2017

19982008-17 2007

66 361

68 107

79 475

1.57

1.73

6 790

7 675

9 787

3.14

3.03

7 365

7 643

10 218

3.46

3.45

29 380

29 303

30 235

–0.40

0.44

4 042

4 363

5 290

1.23

2.41

3 229

3 359

3 835

–3.94

1.86

12 922

12 964

13 903

–0.25

0.95

1 650

1 752

1 959

0.86

1.50

1 001

1 299

1 858

–6.38

4.91

1 694

1 685

1 414

1.06

–1.39

159

227

337

–7.56

3.96

505

447

502

0.58

3.14

11 228

11 279

12 490

–0.43

1.26

1 491

1 525

1 623

2.06

1.06

496

851

1 356

–12.13

5.68

8 548

8 504

8 126

–1.04

–0.46

710

713

955

6.94

3.22

177

84

50

–21.14

–6.01

8 106

8 040

7 543

–1.02

–0.66

607

605

829

6.47

3.47

171

77

43

–21.56

–6.77

3 780

3 751

4 080

–1.00

0.91

978

1 149

1 660

5.27

4.75

88

76

133

–9.62

6.17

1 760

1 688

1 959

–1.84

1.79

834

836

871

5.94

0.24

4

4

4

–2.17

0.00

523

518

515

–5.26

–0.47

54

80

317

45.24

15.44

22

1

1

–49.95

0.00

2 962

2 888

2 876

0.94

–0.05

13

9

9

10.08

0.00

1 958

1 893

1 787

1.42

–0.65

Canada United States

Growthd (%)

EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED Australia

2 322

2 266

2 278

0.84

0.15

8

3

3

16.34

0.00

1 429

1 374

1 278

1.27

–0.66

New Zealand

640

622

598

1.30

–0.77

5

6

6

4.93

0.00

529

519

509

1.80

–0.62

OTHER DEVELOPED

1 168

1 196

1 248

1.69

0.50

692

739

706

–5.41

–0.55

6

7

7

0.33

0.00

Japan

507

499

526

–0.44

0.56

668

718

682

–5.47

–0.61

0

0

0

–20.78

0.00

South Africa

661

697

723

3.62

0.45

24

21

24

–2.46

1.38

6

7

7

1.32

0.00

36 981

38 804

49 241

3.36

2.60

2 747

3 313

4 497

6.55

3.83

4 135

4 284

6 384

14.45

4.52

AFRICA

4 416

4 403

5 380

2.09

2.22

558

797

903

11.10

2.50

50

44

41

–6.75

–3.52

NORTH AFRICA

1 239

1 173

1 446

3.56

2.28

377

486

583

10.40

3.01

1

1

3

7.98

–3.97

Algeria

99

101

115

–1.67

1.43

107

103

143

27.15

3.41

0

0

0

–5.51

29.92

Egypt

592

502

551

2.85

1.06

222

272

383

4.83

3.56

1

1

2

12.95

7.68

3 177

3 230

3 934

1.57

2.20

181

311

320

13.05

1.61

49

43

38

–6.99

–2.57

DEVELOPING

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

17 173

17 956

22 045

3.42

2.30

699

769

1 116

3.21

4.17

3 517

3 578

5 605

16.32

5.19

Argentina

3 099

3 107

3 458

2.57

1.16

4

4

3

–13.94

–3.66

617

507

818

10.18

6.32

Brazil

8 967

9 527

12 400

5.02

2.95

62

74

26

–6.21

–7.91

2 150

2 384

3 947

20.74

5.63

Chile

234

258

339

–0.23

3.01

170

177

241

7.51

3.57

15

14

27

65.68

6.92

1 528

1 574

1 565

1.69

–0.16

252

286

458

–0.97

4.63

22

23

24

28.46

–0.04

Mexico

527

517

585

2.26

1.39

10

12

27

51.09

9.01

431

382

470

10.66

2.34

ASIA and PACIFIC

Uruguay

15 393

16 445

21 815

3.68

3.01

1 490

1 747

2 478

6.90

4.21

568

662

737

9.08

0.92

Bangladesh e China

184

182

231

1.03

2.54

1

14

11

82.75

20.30

0

0

0

81.60

–6.32

7 486

8 044

11 660

5.66

3.89

3

6

23

–10.38

15.59

87

102

137

4.55

3.03

India

3 352

3 744

4 687

2.43

2.47

0

0

0

26.09

0.00

429

494

522

11.56

0.45

Indonesia

474

486

546

4.79

1.45

45

52

70

9.79

2.65

0

0

0

29.07

–1.36

Iran, Islamic Republic of

355

363

400

2.23

1.08

112

125

214

15.81

5.70

0

0

0

22.69

16.60

Korea

210

217

226

–6.77

0.34

245

293

543

3.68

6.26

0

0

0

–1.59

0.00

Malaysia

11

18

18

–0.61

–0.22

180

183

244

8.67

3.15

3

3

5

6.38

5.14

Pakistan

1 057

1 068

1 409

2.84

2.98

3

94

37

78.37

5.33

3

4

7

34.42

–4.77 –13.85

Saudi Arabia

20

21

25

0.15

1.98

137

155

229

13.06

4.39

2

2

0

–10.69

356

360

411

–0.06

1.50

0

0

0

16.57

–8.38

0

7

1

1.55

5.27

3 296

3 351

3 829

1.88

1.50

124

219

305

18.59

5.08

2

3

3

–18.38

–4.39

OECD

26 814

26 766

27 274

–0.33

0.30

3 461

3 692

4 509

0.22

2.23

3 152

3 300

3 714

–3.70

1.72

NON-OECD

39 547

41 342

52 201

3.02

2.55

3 329

3 984

5 278

7.07

3.78

4 212

4 343

6 505

13.13

4.57

Turkey LEAST DEVELOPED COUNTRIES (LDC)

For notes, see end of the table.

194

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.19. Beef and veal projectionsa (cont.) Growthd (%)

CONSUMPTION (kt) Calendar yearb

WORLD DEVELOPED NORTH AMERICA Canada

Average 2005-07 est.

2008

2017

1998-2007

Growthd (%)

PER CAPITA (kg)

2008-17

Average 2005-07 est.

2008

2017

1998-2007

2008-17

65 798

68 117

79 516

1.52

1.73

7.0

7.0

7.4

0.29

30 317

30 427

32 030

0.31

0.63

15.9

15.8

16.2

–0.08

0.61 0.37

13 849

13 684

14 325

0.60

0.59

29.2

28.3

27.4

–0.40

–0.30 –0.79

1 056

1 061

1 069

0.58

0.04

22.7

22.4

20.9

–0.41

12 793

12 623

13 256

0.60

0.63

29.9

28.9

28.1

–0.40

–0.26

9 081

9 155

9 192

0.34

0.05

12.0

12.1

12.0

0.03

–0.05

8 485

8 530

8 354

0.30

–0.22

12.1

12.1

11.7

–0.01

–0.31

4 683

4 837

5 622

0.19

1.81

11.8

12.2

14.4

0.39

1.91

2 596

2 529

2 835

–0.01

1.29

12.8

12.6

14.7

0.44

1.79

564

600

834

–1.87

3.49

8.5

9.2

13.7

–1.04

4.28

838

805

925

0.23

1.46

23.7

22.3

23.6

–0.95

0.54

Australia

724

700

825

0.30

1.82

24.6

23.3

25.2

–0.89

0.88

New Zealand

114

106

100

–0.38

–1.06

19.3

17.5

15.5

–1.47

–1.84

OTHER DEVELOPED

1 866

1 946

1 965

–1.32

0.11

7.4

7.7

7.8

–1.70

0.13

1 172

1 217

1 207

–3.40

–0.11

6.4

6.7

6.7

–3.52

0.07

694

729

758

3.13

0.48

10.1

10.5

10.5

2.04

0.07

35 481

37 689

47 487

2.65

2.54

4.7

4.9

5.5

1.19

1.22

AFRICA

4 959

5 216

6 333

2.91

2.38

3.9

3.9

3.9

0.52

0.15

NORTH AFRICA

1 632

1 687

2 063

4.34

2.56

4.9

4.8

5.0

2.43

0.77

Algeria

208

209

265

6.84

2.51

4.4

4.3

4.7

5.36

1.06

Egypt

826

790

955

2.89

2.05

7.8

7.2

7.5

1.08

0.44

3 326

3 528

4 270

2.28

2.30

3.5

3.6

3.5

–0.29

–0.08

United States EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED

Japan South Africa DEVELOPING

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

14 030

14 716

17 271

1.37

1.70

17.5

17.9

19.0

0.09

0.55

Argentina

2 486

2 604

2 643

1.18

–0.09

44.5

45.8

42.9

0.20

–1.00

Brazil

6 773

7 032

8 447

1.98

1.95

25.1

25.5

27.7

0.61

0.79

Chile

389

419

547

2.05

3.06

16.6

17.5

21.0

0.92

2.15

1 553

1 605

1 792

0.86

1.17

10.6

10.7

10.9

–0.01

0.20

103

141

136

–10.73

–0.43

21.6

29.4

27.5

–10.85

–0.78

16 492

Mexico Uruguay ASIA and PACIFIC

17 758

23 883

3.75

3.23

3.0

3.2

3.9

2.48

2.12

Bangladesh e China

185

196

242

1.10

2.87

0.8

0.8

0.9

–0.77

1.32

7 402

7 948

11 545

5.66

3.92

3.9

4.1

5.7

5.00

3.26

India

2 924

3 250

4 165

1.50

2.74

1.8

1.9

2.2

–0.13

1.43

Indonesia

568

597

694

4.96

1.69

1.7

1.8

1.9

3.66

0.72

Iran, Islamic Republic of

467

489

615

4.43

2.48

4.7

4.7

5.3

3.40

1.15

Korea

457

521

764

–2.38

4.09

6.6

7.5

10.8

–2.89

3.91

Malaysia

203

218

284

7.91

2.87

5.4

5.7

6.4

5.93

1.40

Pakistan

1 050

1 150

1 425

2.77

2.97

4.6

4.8

5.0

0.89

1.08

Saudi Arabia

158

179

261

11.20

4.25

4.6

4.9

6.0

8.68

2.21

Turkey

360

355

409

0.15

1.48

3.4

3.3

3.4

–1.23

0.38

3 335

3 505

4 128

2.32

1.95

3.3

3.3

3.2

–0.07

–0.29

OECD

26 962

26 967

28 028

0.24

0.46

15.6

15.4

15.3

–0.37

0.01

NON-OECD

38 836

41 150

51 489

2.48

2.48

5.0

5.2

5.8

1.11

1.23

LEAST DEVELOPED COUNTRIES (LDC)

a) Imports of meat do not equal exports because world market clearing is achieved on total trade, i.e including trade of live animals (in carcass weight equivalent). b) Year ending 30 June for Australia and 31 May for New Zealand. c) Gross indigenous production. d) Least-squares growth rate (see glossary). e) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. f) Excludes trade of live animals. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384445431007

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

195

ANNEX A

Table A.20. Pig meat projectionsa PRODUCTIONc (kt) Calendar yearb

WORLD

Average 2005-07 2008 est.

Growthd (%)

2017

IMPORTSf (kt)

Average 19982008-17 2005-07 2008 2007 est.

Growthd (%)

2017

EXPORTSf (kt)

Average 19982008-17 2005-07 2008 2007 est.

Growthd (%)

2017

19982008-17 2007

104 168

104 481

125 239

2.24

1.97

4 649

5 184

6 601

6.54

2.56

5 279

5 483

7 051

7.44

2.61

39 247

40 228

42 925

0.65

0.71

2 980

3 124

3 718

5.58

2.08

3 905

4 021

4 897

5.75

1.96

11 512

11 887

12 950

1.75

1.00

599

608

743

4.59

2.26

2 394

2 635

3 614

10.66

2.99

Canada

2 247

2 180

2 383

3.56

1.30

143

156

183

10.52

1.76

1 064

956

1 002

9.60

0.61

United States

9 265

9 707

10 567

1.34

0.93

456

452

561

3.17

2.43

1 330

1 680

2 612

11.59

4.07

22 891

22 903

23 780

0.05

0.42

220

179

179

10.63

0.00

1 350

1 216

1 052

–0.23

–1.30

21 883

21 856

22 791

0.08

0.46

76

44

44

10.24

0.00

1 333

1 198

1 034

–0.30

–1.32

3 017

3 649

4 622

1.45

2.39

819

914

1 123

6.11

2.36

94

96

162

10.91

5.83

1 672

2 147

2 894

1.49

2.88

634

645

656

3.32

0.29

14

13

15

11.83

0.99

629

730

897

–0.50

2.31

70

33

119

30.50

14.19

9

4

0

0.86

–10.26

426

417

394

0.43

–0.43

211

245

288

19.14

2.49

66

73

68

7.06

1.56

387

377

356

0.81

–0.41

176

205

232

21.66

2.32

65

73

68

7.07

1.56

New Zealand

39

40

38

–2.87

–0.58

35

40

56

11.30

3.27

0

0

0

2.60

2.96

OTHER DEVELOPED

1 400

1 373

1 179

0.16

–1.77

1 131

1 178

1 384

4.19

1.97

1

1

1

–5.25

–1.78

1 249

1 220

1 003

–0.24

–2.24

1 101

1 136

1 306

3.96

1.73

0

0

0

9.81

4.75

151

153

175

3.96

1.38

30

43

78

16.91

6.80

1

1

1

–6.56

–4.62

64 922

64 253

82 314

3.30

2.68

1 669

2 060

2 883

8.61

3.23

1 374

1 461

2 154

13.87

4.22

709

753

987

2.68

2.67

81

100

226

8.33

9.05

8

72

46

8.50

–4.29

NORTH AFRICA

5

6

7

–1.05

2.53

0

0

1

–7.16

10.09

0

0

0

16.03

20.32

Algeria

0

0

0

0.15

0.00

0

0

0

25.20

0.00

0

0

0

12.23

0.00

Egypt

2

3

4

–4.77

1.80

0

0

0

–29.14

9.71

0

0

0

–50.13

20.32 –4.30

DEVELOPED NORTH AMERICA

EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED Australia

Japan South Africa DEVELOPING AFRICA

SUB-SAHARAN AFRICA

704

747

980

2.71

2.68

81

100

225

8.91

9.05

8

72

46

8.48

5 908

6 389

8 772

4.23

3.41

486

479

622

7.33

2.44

765

808

1 360

23.90

5.45

255

295

632

2.54

8.85

23

12

5

–14.97

–8.12

2

3

109

–1.45

38.24

Brazil

2 868

3 161

4 630

5.47

4.00

6

2

2

21.27

–0.03

598

619

1 050

26.54

5.87

Chile

476

555

622

9.16

1.30

2

3

2

0.41

–4.78

125

136

95

29.92

–4.91

1 073

1 069

1 148

1.47

0.71

302

338

444

11.41

2.68

31

30

30

1.88

–0.06

20

22

37

–4.20

5.47

10

10

14

6.29

4.26

0

0

0

13.17

20.88

58 304

57 111

72 555

3.23

2.60

1 102

1 481

2 035

9.31

2.97

601

581

748

7.21

2.99

0

0

0

0.00

0.00

0

0

0

1.03

0.00

0

0

0

0.00

0.00

49 693

48 146

61 859

3.04

2.70

106

137

287

1.25

6.90

512

464

559

15.81

2.13

India

509

520

629

1.12

2.13

0

–1

1

46.50

–5.09

1

0

0

33.09

1.56

Indonesia

617

595

616

1.60

0.34

5

74

127

25.61

7.97

4

8

8

32.24

1.26

0

0

0

0.00

0.00

0

0

0

–1.40

0.00

0

0

0

34.69

0.00

1 092

1 139

1 148

2.17

0.34

262

223

528

11.17

7.40

18

34

34

–19.29

0.00

Malaysia

210

189

226

–0.34

1.63

35

104

139

15.98

4.78

1

1

1

–2.94

3.25

Pakistan

0

0

0

0.00

0.00

0

0

0

79.36

0.00

0

0

0

0.00

0.00

Saudi Arabia

0

0

0

0.00

0.00

5

5

5

18.60

0.03

0

0

0

–52.69

2.11

Turkey

0

0

0

3.65

1.43

0

0

0

–13.71

37.42

0

0

0

–3.37

1.37

731

771

978

1.90

2.33

52

70

153

13.76

9.04

0

4

2

0.39

–5.21

OECD

37 591

37 940

39 788

0.67

0.54

2 566

2 608

3 368

6.39

2.71

3 849

3 979

4 789

5.21

1.82

NON-OECD

66 577

66 541

85 452

3.22

2.70

2 083

2 576

3 233

6.82

2.41

1 430

1 504

2 262

16.23

4.45

LATIN AMERICA and CARIBBEAN Argentina

Mexico Uruguay ASIA and PACIFIC Bangladesh e China

Iran, Islamic Republic of Korea

LEAST DEVELOPED COUNTRIES (LDC)

For notes, see end of the table.

196

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.20. Pig meat projectionsa (cont.) Growthd (%)

CONSUMPTION (kt) Calendar yearb

WORLD DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED Australia

Growthd (%)

PER CAPITA (kg)

Average 2005-07 est.

2008

2017

103 491

104 222

124 875

2.18

1.97

12.2

12.0

13.0

0.95

38 124

39 154

41 559

0.54

0.69

22.2

22.7

23.5

0.15

0.43

9 519

9 702

9 887

0.37

0.44

22.4

22.4

21.0

–0.63

–0.44

1998-2007

2008-17

Average 2005-07 est.

2008

2017

1998-2007

2008-17 0.85

761

778

829

–2.10

0.93

18.2

18.3

18.1

–3.10

0.10

8 757

8 923

9 058

0.61

0.40

22.8

22.8

21.4

–0.40

–0.49

21 746

21 850

22 892

0.14

0.50

32.1

32.1

33.3

–0.16

0.40

20 595

20 670

21 770

0.13

0.55

32.7

32.7

34.1

–0.18

0.45

3 759

4 488

5 605

2.11

2.29

10.6

12.7

16.0

2.31

2.40

2 309

2 800

3 557

1.83

2.34

12.7

15.5

20.6

2.28

2.84

690

759

1 016

0.88

3.24

11.6

12.9

18.5

1.70

4.02

572

589

614

4.03

0.63

18.0

18.2

17.5

2.85

–0.28 –0.46

498

510

521

4.34

0.48

18.9

18.9

17.7

3.15

New Zealand

74

79

93

2.09

1.54

14.0

14.7

16.1

0.99

0.76

OTHER DEVELOPED

2 529

2 525

2 562

1.69

0.15

11.2

11.2

11.3

1.31

0.17

2 349

2 330

2 309

1.43

–0.11

14.3

14.2

14.3

1.32

0.07

180

195

253

5.51

2.83

2.9

3.1

3.9

4.42

2.43

65 366

65 068

83 316

3.24

2.66

9.7

9.4

10.7

1.79

1.34 2.02

Japan South Africa DEVELOPING AFRICA

773

757

1 164

2.96

4.25

0.7

0.6

0.8

0.56

NORTH AFRICA

5

6

8

–4.31

3.08

0.0

0.0

0.0

–6.22

1.29

Algeria

0

0

0

7.36

0.00

0.0

0.0

0.0

5.89

–1.44

Egypt

2

3

4

–10.10

2.17

0.0

0.0

0.0

–11.92

0.56

768

751

1 156

3.03

4.26

0.9

0.8

1.1

0.46

1.88

5 665

6 099

8 084

3.08

3.03

7.9

8.3

9.9

1.80

1.88

276

305

528

–0.23

6.45

5.5

6.0

9.5

–1.21

5.54

Brazil

2 276

2 544

3 582

2.90

3.51

9.4

10.3

13.1

1.54

2.35

Chile

353

422

529

5.75

2.93

16.7

19.6

22.7

4.63

2.03

1 381

1 417

1 612

3.13

1.28

10.5

10.5

10.9

2.27

0.30

30

32

51

–1.39

5.10

7.0

7.4

11.4

–1.51

4.76

ASIA and PACIFIC

58 928

58 212

74 068

3.27

2.60

12.1

11.6

13.4

2.00

1.49

Bangladesh e China

0

0

0

1.03

0.00

0.0

0.0

0.0

–38.47

–1.55

49 287

47 819

61 587

2.95

2.72

29.0

27.8

33.8

2.28

2.06

India

508

520

631

1.08

2.14

0.3

0.3

0.4

–0.54

0.84

Indonesia

601

647

721

1.67

1.34

2.0

2.2

2.2

0.36

0.36

0

0

0

0.00

0.00

0.0

0.0

0.0

0.00

0.00

1 325

1 328

1 642

4.45

2.12

21.4

21.3

25.9

3.94

1.93

Malaysia

244

292

364

2.41

2.66

7.3

8.4

9.2

0.44

1.19

Pakistan

0

0

0

79.36

0.00

0.0

0.0

0.0

139.03

0.00

Saudi Arabia

5

5

5

18.52

0.00

0.1

0.2

0.1

–15.44

–2.05

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN Argentina

Mexico Uruguay

Iran, Islamic Republic of Korea

Turkey

0

0

0

7.77

0.00

0.0

0.0

0.0

17.35

–1.10

784

778

1 126

2.47

3.66

0.9

0.8

1.0

0.08

1.42

OECD

36 104

36 396

38 194

0.58

0.57

23.2

23.1

23.3

–0.04

0.11

NON-OECD

67 387

67 826

86 681

3.13

2.64

9.7

9.6

10.9

1.75

1.39

LEAST DEVELOPED COUNTRIES (LDC)

a) Imports of meat do not equal exports because world market clearing is achieved on total trade, i.e including trade of live animals (in carcass weight equivalent). b) Year ending 30 June for Australia and 31 May for New Zealand. c) Gross indigenous production. d) Least-squares growth rate (see glossary). e) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. f) Excludes trade of live animals. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384463431521

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

197

ANNEX A

Table A.21. Poultry meat projections Growthb (%)

PRODUCTION (kt) Calendar yeara

WORLD

Average 2005-07 2008 est.

2017

Growthb (%)

IMPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

EXPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

83 794

88 346

105 707

3.33

1.97

8 139

8 827

11 102

3.01

2.30

8 355

8 828

11 102

3.78

2.30

37 048

38 731

43 593

2.37

1.29

3 605

3 697

3 864

4.06

0.48

3 811

4 006

4 407

0.33

1.15

19 805

20 849

22 974

2.31

1.02

236

261

256

6.82

–0.07

2 863

3 153

3 616

1.03

1.68

1 172

1 220

1 423

2.09

1.60

211

228

225

5.56

–0.14

154

180

210

3.34

1.70

18 632

19 629

21 552

2.32

0.99

26

33

30

28.09

0.50

2 709

2 973

3 406

0.90

1.68

11 657

11 724

12 640

1.18

0.83

897

948

1 053

9.03

1.10

866

771

652

–2.01

–2.05

11 413

11 468

12 345

1.18

0.81

745

785

863

10.18

0.97

853

755

624

–2.11

–2.29

2 319

2 874

4 047

10.39

3.92

1 835

1 728

2 141

3.28

2.09

41

49

90

10.21

6.82

1 528

1 973

2 776

10.34

3.79

1 332

1 212

1 252

0.89

0.18

5

7

7

4.51

0.00

535

621

856

13.83

3.90

156

134

358

15.54

9.97

14

15

36

43.03

9.18

1 000

1 053

1 134

4.51

0.91

0

0

0

0.00

0.00

28

20

36

1.90

6.39

Australia

833

882

953

4.08

0.96

0

0

0

0.00

0.00

28

20

36

1.90

6.39

New Zealand

168

170

181

6.82

0.60

0

0

0

0.00

0.00

0

0

0

0.00

0.00

OTHER DEVELOPED

2 267

2 231

2 798

2.14

2.38

637

760

414

0.32

–5.81

13

13

13

–2.94

0.00

1 320

1 220

1 337

1.23

0.74

397

544

317

–4.59

–4.83

2

2

2

–14.10

0.00

947

1 011

1 461

3.56

4.10

239

216

98

16.01

–8.24

11

11

11

–0.93

0.00

46 745

49 615

62 114

4.14

2.47

4 533

5 131

7 238

2.23

3.42

4 543

4 822

6 695

7.57

3.14

AFRICA

2 670

2 784

3 683

2.67

3.17

534

620

1 030

10.57

5.13

46

57

125

7.98

9.79

NORTH AFRICA

1 566

1 641

2 149

2.87

3.03

47

63

239

5.82

14.06

22

32

99

41.05

14.21

Algeria

262

272

343

1.41

2.68

8

5

11

5.68

13.40

0

0

32

–0.67

48.82

Egypt

753

789

1 006

3.97

2.75

25

39

157

16.54

13.89

21

27

55

51.23

7.67

1 104

1 143

1 534

2.38

3.38

487

557

791

11.01

3.33

24

25

26

–1.60

0.19

DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED

Japan South Africa DEVELOPING

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

18 072

18 951

23 970

5.89

2.57

1 182

1 199

2 060

9.20

4.27

3 212

3 332

4 753

18.47

2.82

Argentina

1 140

1 248

1 888

2.80

4.56

16

0

0

–14.89

0.00

102

71

131

26.68

4.38

Brazil

9 246

9 591

11 930

7.46

2.08

0

0

0

–24.59

0.52

2 971

3 080

4 409

18.89

2.77

Chile

593

656

741

5.23

1.58

23

26

54

49.06

8.27

89

121

85

15.74

–0.89

2 485

2 496

2 711

5.22

0.93

512

503

647

12.29

3.49

1

1

1

–19.10

2.17

54

60

85

–0.75

4.01

1

2

1

8.05

2.12

0

0

7

–68.90

26.01

26 004

27 881

34 461

3.20

2.34

2 817

3 312

4 148

–0.90

2.69

1 285

1 432

1 816

–4.76

3.76

125

128

183

1.97

4.02

3

6

4

7.67

–7.25

0

0

0

–13.00

0.00

14 103

15 218

18 181

2.59

1.79

583

913

1 141

–5.46

4.44

501

595

770

–0.93

2.73

India

2 086

2 318

3 690

11.66

5.15

0

0

0

54.32

0.00

4

10

129

–2.13

24.35

Indonesia

Mexico Uruguay ASIA and PACIFIC Bangladesh c China

1 079

1 240

1 450

5.97

1.88

3

1

52

–9.05

30.76

0

13

0

–62.03

–14.04

Iran, Islamic Republic of

841

903

1 003

1.34

1.34

23

26

64

7.69

6.11

21

22

43

15.64

7.11

Korea

435

473

560

0.97

1.92

91

114

130

6.90

1.25

2

2

3

3.29

2.76

Malaysia

1 046

1 077

1 223

3.83

1.56

28

23

0

–6.21

–42.86

95

94

17

–0.43

–18.29

Pakistan

390

401

596

3.31

4.53

1

23

30

1.44

1.63

4

5

8

20.21

6.62

Saudi Arabia

547

583

731

2.66

2.79

467

483

790

4.14

4.71

6

4

0

–15.71

–7.16

Turkey

937

976

1 221

7.04

2.58

78

77

122

30.45

4.16

37

28

72

16.19

10.30

1 114

1 182

1 593

2.33

3.52

444

479

652

10.79

2.59

9

10

13

–6.40

3.28

OECD

37 489

38 632

42 380

2.22

0.99

2 099

2 326

2 377

5.82

0.57

3 787

3 961

4 355

0.32

1.14

NON-OECD

46 305

49 715

63 327

4.29

2.67

6 040

6 501

8 725

2.16

2.83

4 568

4 867

6 747

7.52

3.13

LEAST DEVELOPED COUNTRIES (LDC)

For notes, see end of the table.

198

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.21. Poultry meat projections (cont.) Growthb (%)

CONSUMPTION (kt) Calendar yeara

WORLD

Average 2005-07 est.

2008

2017

1998-2007

2008-17

Growthb (%)

PER CAPITA (kg) Average 2005-07 est.

2008

2017

1998-2007

2008-17

83 663

88 297

105 709

3.28

1.97

11.1

11.5

12.4

2.05

0.86

36 854

38 373

43 052

2.77

1.23

24.2

25.1

27.5

2.38

0.97

17 192

17 903

19 614

2.61

0.91

45.6

46.5

47.1

1.60

0.02

1 229

1 266

1 438

2.49

1.31

33.2

33.5

35.3

1.49

0.47

15 963

16 637

18 176

2.62

0.88

46.9

48.0

48.4

1.61

–0.01

11 690

11 905

13 044

1.91

1.02

19.5

19.7

21.4

1.61

0.92

11 307

11 500

12 586

1.90

1.01

20.2

20.5

22.2

1.59

0.91

4 121

4 554

6 098

6.91

3.21

13.1

14.5

19.6

7.12

3.32

2 863

3 179

4 020

5.35

2.55

17.7

19.8

26.3

5.80

3.05

677

740

1 178

14.05

5.28

12.8

14.2

24.3

14.88

6.06

972

1 033

1 098

4.59

0.74

34.6

36.0

35.2

3.41

–0.18

Australia

805

862

917

4.17

0.77

34.4

36.1

35.3

2.97

–0.18

New Zealand

168

170

181

6.82

0.60

35.6

35.6

35.2

5.72

–0.18

OTHER DEVELOPED

2 879

2 978

3 199

1.72

0.86

14.4

14.8

16.0

1.35

0.87

1 704

1 761

1 651

–0.33

–0.62

11.7

12.1

11.6

–0.45

–0.44

DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED

Japan South Africa

1 175

1 217

1 548

5.39

2.67

21.4

21.9

26.9

4.30

2.27

46 809

49 924

62 657

3.69

2.51

7.8

8.1

9.0

2.24

1.19

AFRICA

3 160

3 346

4 588

3.70

3.44

3.1

3.1

3.5

1.30

1.21

NORTH AFRICA

1 590

1 671

2 289

2.77

3.47

5.9

6.0

7.0

0.85

1.68

Algeria

270

277

321

1.51

1.65

7.1

7.1

7.2

0.04

0.20

Egypt

757

801

1 108

3.86

3.61

9.0

9.2

11.0

2.04

2.00

1 570

1 675

2 299

4.71

3.40

2.1

2.1

2.4

2.14

1.02

DEVELOPING

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

16 041

16 817

21 277

4.51

2.66

25.1

25.7

29.4

3.23

1.51

Argentina

1 054

1 176

1 757

1.10

4.61

23.7

26.0

35.8

0.12

3.71

Brazil

6 276

6 511

7 522

4.13

1.72

29.3

29.7

31.0

2.77

0.56

Chile

526

560

710

4.56

2.39

28.1

29.4

34.3

3.43

1.49

2 996

2 997

3 357

6.22

1.39

25.6

25.1

25.7

5.36

0.41

55

62

79

–0.39

2.83

14.5

16.2

20.1

–0.51

2.48

ASIA and PACIFIC

27 608

29 761

36 793

3.24

2.31

6.4

6.7

7.5

1.97

1.20

Bangladesh c China

129

134

186

2.07

3.62

0.7

0.7

0.9

0.20

2.07

14 186

15 535

18 552

2.38

1.90

9.4

10.2

11.5

1.71

1.24

India

2 083

2 308

3 561

11.70

4.83

1.6

1.7

2.3

10.08

3.52

Indonesia

1 082

1 227

1 503

5.92

2.25

4.2

4.6

5.2

4.61

1.27

Iran, Islamic Republic of

844

906

1 024

1.06

1.37

10.6

11.0

11.1

0.04

0.04

Korea

524

585

688

1.48

1.79

9.5

10.6

12.2

0.98

1.61

Malaysia

979

1 006

1 207

3.86

2.05

33.0

32.8

34.4

1.89

0.58

Pakistan

387

419

618

3.22

4.34

2.1

2.2

2.8

1.33

2.45

1 008

1 062

1 521

3.60

3.75

36.7

37.0

44.0

1.08

1.71

979

1 025

1 270

7.72

2.40

11.7

11.9

13.3

6.34

1.29

1 549

1 651

2 231

4.33

3.24

1.9

2.0

2.2

1.94

1.00

OECD

35 805

36 945

40 404

2.63

0.96

26.0

26.5

27.8

2.02

0.50

NON-OECD

47 858

51 352

65 306

3.78

2.65

7.8

8.2

9.3

2.41

1.39

Mexico Uruguay

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC)

a) Year ending 30 June for Australia and 31 May for New Zealand. b) Least-squares growth rate (see glossary). c) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384481282702

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

199

ANNEX A

Table A.22. Sheep meat projectionsa PRODUCTIONc (kt) Calendar yearb

WORLD

Average 2005-07 2008 est.

Growthd (%)

2017

IMPORTSf (kt)

Average 19982008-17 2005-07 2008 2007 est.

Growthd (%)

2017

EXPORTSf (kt)

Average 19982008-17 2005-07 2008 2007 est.

Growthd (%)

2017

19982008-17 2007

13 644

13 911

16 164

–0.67

1.66

821

873

1 024

3.36

1.92

931

923

979

1.78

0.81

3 397

3 350

3 442

0.28

0.38

477

482

499

3.75

0.48

870

858

902

1.78

0.71

111

112

131

–2.26

1.70

107

112

115

6.21

0.31

6

5

5

9.73

0.18

Canada

18

21

30

5.57

3.54

21

23

31

4.62

3.31

0

0

0

–0.66

2.63

United States

92

90

101

–3.41

1.22

85

89

84

6.63

–0.61

6

5

5

10.46

0.00

1 210

1 185

1 116

–0.44

–0.60

283

286

297

5.06

0.43

11

10

9

23.64

–1.40

1 113

1 084

1 014

–0.59

–0.66

271

273

283

5.01

0.46

5

4

4

27.45

0.00

625

612

771

2.32

2.56

9

19

27

4.70

5.87

1

1

1

–4.99

–0.64

196

159

250

3.36

5.00

9

12

12

5.73

0.00

0

0

0

–63.77

0.00

16

18

21

–1.82

1.58

0

1

1

86.10

7.99

0

0

0

–1.68

37.42 0.74

DEVELOPED NORTH AMERICA

EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED

1 307

1 294

1 272

0.04

–0.06

7

9

9

4.70

0.00

852

842

888

1.63

Australia

755

774

802

–0.21

0.59

0

0

0

0.00

0.00

381

394

481

1.80

2.41

New Zealand

553

520

470

0.39

–1.07

7

9

9

4.70

0.00

471

448

407

1.51

–0.94

OTHER DEVELOPED

145

146

153

2.01

0.52

72

57

51

–4.04

–1.00

0

0

0

–12.45

0.00

0

0

0

0.00

0.00

52

47

32

–0.60

–4.23

0

0

0

0.00

0.00

145

146

153

2.01

0.52

20

10

20

–10.07

7.71

0

0

0

–12.45

0.00

10 247

10 561

12 722

–0.62

2.04

343

391

525

2.26

3.48

62

65

77

0.67

2.00

Japan South Africa DEVELOPING AFRICA

3 360

3 332

3 839

–5.25

1.56

48

68

139

17.40

8.42

8

8

6

–7.08

–5.87

NORTH AFRICA

624

641

740

2.85

1.55

33

44

79

25.29

7.04

3

4

3

11.49

–1.51

Algeria

225

221

240

3.44

0.82

10

20

35

17.51

7.08

0

0

0

–0.98

0.00

Egypt

60

64

70

–4.63

1.04

1

1

2

–9.90

11.06

0

0

0

3.72

4.38

2 735

2 691

3 099

–6.58

1.56

15

23

60

8.04

10.47

5

4

3

–13.01

–9.32

449

472

579

3.36

2.21

54

63

69

1.77

1.66

22

19

24

0.77

2.43

0

0

0

0.00

0.00

0

0

0

0.00

0.00

0

0

0

0.00

0.00

Brazil

166

181

262

6.63

3.98

1

1

1

–18.97

0.00

0

0

0

33.20

0.00

Chile

16

17

18

–0.89

0.72

0

0

0

23.86

0.00

7

7

8

6.44

1.56

Mexico

47

47

48

5.81

0.04

40

43

42

3.60

–0.06

0

0

0

6.07

0.00

Uruguay

42

45

55

–3.80

2.23

0

0

0

0.00

0.00

15

11

15

0.47

3.05

ASIA and PACIFIC

6 438

6 757

8 304

2.62

2.26

241

260

317

0.61

2.23

32

38

47

3.38

3.40

Bangladesh e China

140

142

152

1.09

0.75

0

0

0

–39.34

49.45

0

0

1

–10.04

–3.84

3 265

3 514

4 731

3.86

3.25

10

9

9

–0.74

–0.15

9

10

8

4.15

–2.05

India

727

719

793

0.71

1.06

0

0

0

–29.70

0.00

11

12

13

3.18

0.35

Indonesia

130

138

150

6.95

0.93

1

5

9

6.26

8.85

0

0

0

22.50

0.00

Iran, Islamic Republic of

524

545

576

3.03

0.58

0

0

0

–15.70

0.00

0

1

0

71.27

–19.65

Korea

2

2

2

–5.35

0.00

6

6

6

1.13

0.00

0

0

0

–96.80

0.00

Malaysia

0

0

0

3.42

0.85

20

22

26

5.51

1.95

0

0

0

–14.74

2.24

Pakistan

563

625

769

3.02

2.30

0

0

0

–13.49

0.00

8

12

19

39.70

10.51

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN Argentina

Saudi Arabia

42

33

36

14.35

1.06

45

53

61

–2.08

1.63

1

1

1

0.53

3.60

317

318

309

–2.33

–0.31

0

0

0

23.83

0.00

0

0

0

–43.33

–24.27

2 669

2 614

3 019

–6.99

1.59

5

7

15

–1.00

7.06

4

2

1

–9.62

–28.52

2 929

2 889

2 806

–0.51

–0.23

489

496

494

4.28

–0.01

864

852

897

1.71

0.74

10 715

11 022

13 358

–0.39

2.11

332

376

530

1.23

4.06

67

71

82

1.68

1.63

Turkey LEAST DEVELOPED COUNTRIES (LDC) OECD NON-OECD

For notes, see end of the table.

200

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.22. Sheep meat projections (cont.) Growthd (%)

CONSUMPTION (kt) Calendar yearb

WORLD DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED Australia New Zealand OTHER DEVELOPED Japan South Africa

Average 2005-07 est.

2008

2017

1998-2007

13 540

13 948

16 420

–0.56

1.83

2 922

2 909

2 992

0.70

0.43

203

211

233

1.07

39

43

59

164

168

1 483 1 378

2008-17

Growthd (%)

PER CAPITA (kg) Average 2005-07 est.

2008

2017

1998-2007

2008-17

1.8

1.8

1.9

–1.78

0.71

1.9

1.9

1.9

0.31

0.17

1.10

0.5

0.5

0.6

0.07

0.21

5.47

3.55

1.1

1.1

1.5

4.48

2.72

174

0.20

0.37

0.5

0.5

0.5

–0.80

–0.52

1 464

1 406

0.38

–0.39

2.5

2.4

2.3

0.07

–0.49

1 353

1 294

0.30

–0.43

2.5

2.4

2.3

–0.01

–0.53

620

615

784

2.05

2.74

2.0

2.0

2.5

2.25

2.85

191

156

247

2.35

5.07

1.2

1.0

1.6

2.79

5.57

16

19

22

–1.78

1.89

0.3

0.4

0.5

–0.95

2.68

380

400

336

–1.18

–1.47

13.5

13.9

10.8

–2.36

–2.39

291

319

269

–1.30

–1.34

12.4

13.3

10.3

–2.50

–2.29

89

81

68

–0.82

–1.97

19.0

16.9

13.2

–1.91

–2.75

235

218

233

0.15

0.83

1.2

1.1

1.2

–0.23

0.85

52

47

32

–0.60

–4.23

0.4

0.3

0.2

–0.72

–4.05

183

171

201

0.41

1.89

3.3

3.1

3.5

–0.68

1.48

DEVELOPING

10 618

11 040

13 428

–0.54

2.16

1.8

1.8

1.9

–1.99

0.85

AFRICA

3 382

3 395

4 064

–5.03

2.00

3.3

3.2

3.1

–7.42

–0.23

658

684

824

3.41

2.06

2.5

2.5

2.5

1.50

0.27

Algeria

235

241

275

3.79

1.46

6.2

6.2

6.2

2.31

0.01

Egypt

64

67

80

–4.30

1.92

0.8

0.8

0.8

–6.11

0.31

2 724

2 710

3 241

–6.48

1.99

3.6

3.4

3.3

–9.05

–0.39

477

512

620

3.12

2.14

0.7

0.8

0.9

1.85

1.00

0

0

0

0.00

0.00

0.0

0.0

0.0

0.00

0.00

Brazil

168

182

263

5.99

3.96

0.8

0.8

1.1

4.62

2.80

Chile

9

10

10

–4.45

0.07

0.5

0.5

0.5

–5.57

–0.83

Mexico

87

91

92

4.45

0.12

0.7

0.8

0.7

3.59

–0.85

Uruguay

23

29

34

–7.70

1.75

6.1

7.6

8.6

–7.82

1.40

6 760

7 133

8 743

2.43

2.24

1.6

1.6

1.8

1.16

1.13 –0.84

NORTH AFRICA

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN Argentina

ASIA and PACIFIC Bangladesh

140

142

151

1.01

0.71

0.8

0.8

0.7

–0.87

3 265

3 514

4 732

3.85

3.25

2.2

2.3

2.9

3.18

2.59

India

714

704

777

0.63

1.08

0.5

0.5

0.5

–0.99

–0.23

Indonesia

131

143

159

6.95

1.29

0.5

0.5

0.5

5.64

0.32

Iran, Islamic Republic of

521

537

574

2.77

0.74

6.5

6.5

6.2

1.74

–0.60

Chinae

Korea

8

8

8

2.41

0.00

0.1

0.1

0.1

1.91

–0.18

Malaysia

21

23

28

5.50

1.93

0.7

0.8

0.8

3.53

0.46

Pakistan

554

626

776

2.82

2.52

3.0

3.3

3.5

0.94

0.63

Saudi Arabia

144

148

169

–0.07

1.48

5.3

5.2

4.9

–2.60

–0.57

Turkey LEAST DEVELOPED COUNTRIES (LDC) OECD NON-OECD

317

317

308

–2.21

–0.33

3.8

3.7

3.2

–3.59

–1.43

2 647

2 622

3 120

–6.95

1.93

3.3

3.1

3.0

–9.34

–0.31

2 462

2 465

2 340

–0.08

–0.46

1.8

1.8

1.6

–0.69

–0.92

11 078

11 484

14 080

–0.37

2.26

1.8

1.8

2.0

–1.74

1.00

a) b) c) d) e)

Imports of meat do not equal exports because of an incomplete coverage of international trade. Year ending 30 June for Australia and 31 May for New Zealand. Gross indigenous production. Least-squares growth rate (see glossary). Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. f) Excludes trade of live animals. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384485440666

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

201

ANNEX A

Table A.23. Main policy assumptions for dairy markets Average 2002-06

Calendar yeara

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

5

5

5

5

5

5

5

5

5

5

5

ARGENTINA Dairy export tax

%

7

CANADA Milk target priceb

CADc/litre

65

72

72

73

74

75

76

76

77

78

79

80

Butter support price

CAD/t

6 393

6 870

6 932

7 135

7 278

7 424

7 572

7 723

7 878

8 036

8 196

8 360

SMP support price

CAD/t

5 427

5 921

5 933

6 123

6 113

6 170

6 212

6 230

6 265

6 333

6 378

6 421

Dairy subsidy

CAD/hl

0.07

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Cheese tariff-quota

kt pw

20

20

20

20

20

20

20

20

20

20

20

20

in-quota tariff

%

1

1

1

1

1

1

1

1

1

1

1

1

out-of-quota tariff

%

246

246

246

246

246

246

246

246

246

246

246

246

Subsidised export limitsc Cheese

kt pw

9

9

9

9

9

9

9

9

9

9

9

9

SMP

kt pw

45

45

45

45

45

45

45

45

45

45

45

45

EUROPEAN UNIONd Milk quotae

mt pw

143

143

146

146

146

146

146

146

146

146

146

146

Butter intervention price EUR/t

3 075

2 528

2 462

2 462

2 462

2 464

2 464

2 464

2 464

2 464

2 464

2 464

SMP intervention price

EUR/t

1 963

1 747

1 747

1 747

1 747

1 747

1 747

1 747

1 747

1 747

1 747

1 747

Butter tariff-quotas

kt pw

90

90

90

90

90

90

90

90

90

90

90

90

Cheese tariff-quota

kt pw

103

103

103

103

103

103

103

103

103

103

103

103

SMP tariff-quota

kt pw

71

71

71

71

71

71

71

71

71

71

71

71

Butter

kt pw

412

412

412

412

412

412

412

412

412

412

412

412

Cheese

kt pw

332

332

332

332

332

332

332

332

332

332

332

332

SMP

kt pw

323

323

323

323

323

323

323

323

323

323

323

323

Subsidised export limitsa

JAPAN Direct payments

JPY/kg

11

11

11

11

11

11

11

11

11

11

11

11

Cheese tarifff

%

31

31

31

31

31

31

31

31

31

31

31

31

Tariff-quotas Butter

2

2

2

2

2

2

2

2

2

2

2

2

in-quota tariff

kt pw %

35

35

35

35

35

35

35

35

35

35

35

35

out-of-quota tariff

%

733

733

733

733

733

733

733

733

733

733

733

733

kt pw

116

116

116

116

116

116

116

116

116

116

116

116

SMP in-quota tariff

%

16

16

16

16

16

16

16

16

16

16

16

16

out-of-quota tariff

%

210

210

210

210

210

210

210

210

210

210

210

210 0.3

WMP

t pw

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

0.3

in-quota tariff

%

24

24

24

24

24

24

24

24

24

24

24

24

out-of-quota tariff

%

316

316

316

316

316

316

316

316

316

316

316

316

kt pw

0.4

0.4

0.4

0.4

0.4

0.4

0.4

0.4

0.4

0.4

0.4

0.4

%

40

40

40

40

40

40

40

40

40

40

40

40

out-of-quota tariff %

89

89

89

89

89

89

89

89

89

89

89

89

1.0

1.0

1.0

1.0

1.0

1.0

1.0

1.0

1.0

1.0

1.0

1.0

KOREA Tariff-quotas Butter in-quota tariff SMP in-quota tariff

kt pw %

20

20

20

20

20

20

20

20

20

20

20

20

out-of-quota tariff %

176

176

176

176

176

176

176

176

176

176

176

176

kt pw

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

0.6

%

40

40

40

40

40

40

40

40

40

40

40

40

%

176

176

176

176

176

176

176

176

176

176

176

176

WMP in-quota tariff out-of-quota tariff

For notes, see end of the table.

202

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.23. Main policy assumptions for dairy markets (cont.) Average 2002-06

Calendar yeara

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

0

0

0

0

0

0

0

0

0

0

0

MEXICO Butter tariff

%

0

Tariff-quotas Cheese

kt pw

9

9

9

9

9

9

9

9

9

9

9

9

in-quota tariff

%

50

50

50

50

50

50

50

50

50

50

50

50

out-of-quota tariff

%

126

125

125

125

125

125

125

125

125

125

125

125

90

90

90

90

90

90

90

90

90

90

90

90

SMP

kt pw

in-quota tariff

%

0

0

0

0

0

0

0

0

0

0

0

0

out-of-quota tariff

%

126

125

125

125

125

125

125

125

125

125

125

125

MXN mn

484

1 000

1 000

1 000

1 000

1 000

1 000

1 000

1 000

1 000

1 000

1 000

Liconsa social program RUSSIA Butter tariff

%

20

20

5

5

5

5

5

5

5

5

5

5

Cheese tariff

%

15

15

5

5

5

5

5

5

5

5

5

5

UNITED STATESg Milk support priceb

USDc/litre

22

22

22

22

22

22

22

22

22

22

22

22

Target priceh

USDc/litre

NA

37.3

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Butter support price

USD/t

2 243

2 315

2 315

2 315

2 315

2 315

2 315

2 315

2 316

2 316

2 316

2 317

SMP support price

USD/t

1 801

1 764

1 764

1 764

1 764

1 764

1 764

1 764

1 764

1 764

1 764

1 765

Butter tariff-quota

kt pw

13

13

13

13

13

13

13

13

13

13

13

13

in-quota tariff

%

10

10

10

10

10

10

10

10

10

10

10

10

out-of-quota tariff

%

112

112

112

112

112

112

112

112

112

112

112

112

kt pw

Cheese tariff-quota

135

135

135

135

135

135

135

135

135

135

135

135

in-quota tariff

%

12

12

12

12

12

12

12

12

12

12

12

12

out-of-quota tariff

%

87

87

87

87

87

87

87

87

87

87

87

87

Butter

kt pw

21

21

21

21

21

21

21

21

21

21

21

21

SMP

kt pw

68

68

68

68

68

68

68

68

68

68

68

68

Milk tariff

%

80

80

80

80

80

80

80

80

80

80

80

80

Butter tariff

%

44

40

40

40

40

40

40

40

40

40

40

40

Cheese tariff

%

41

40

40

40

40

40

40

40

40

40

40

40

Whole milk powder tariff %

20

20

20

20

20

20

20

20

20

20

20

20

Subsidised export limitsa

INDIA

SOUTH AFRICA Milk powder tariff-quota kt pw

4

4

4

4

4

4

4

4

4

4

4

4

in-quota tariff

%

20

20

20

20

20

20

20

20

20

20

20

20

out-of-quota tariff

%

85

81

81

81

81

81

81

81

81

81

81

81

a) Year ending 30 June for Australia and 31 May for New Zealand. b) For manufacturing milk. c) The effective volume of cheese and SMP subsidized exports will be lower reflecting the binding nature of subsidized export limits in value terms. d) EU farmers also benefit from the Single Farm Payment (SFP) Scheme, which provides flat-rate payments independent from current production decisions and market developments. For the accession countries, payments are phased in with the assumption of maximum top-ups from national budgets up to 2011 through the Single Area Payment (SAP) and from 2012 through the SFP. Due to modulation, between 2.7% and 4.6% of the total SFP will go to rural development spending rather than directly to the farmers in the 15 former member states. From 2013, 4.6% of the total SFP will go to rural development spending in the accession countries. e) Total quota, EU27 starting in 1999. f) Excludes processed cheese. g) Year beginning 1 January. h) The counter-cyclical payment is determined as a 45% difference in 2005 and a 34% difference in 2006 and 2007, between the target price and the Boston class I price. Note: The source for tariffs and Tariff Rate Quotas (except Russia) is AMAD (Agricultural market access database). The tariff and TRQ data are based on Most Favoured Nation rates scheduled with the WTO and exclude those under preferential or regional agreements, which may be substantially different. Tariffs are simple averages of several product lines. Specific rates are converted to ad valorem rates using world prices in the Outlook. Import quotas are based on global commitments scheduled in the WTO rather than those allocated to preferential partners under regional or other agreements. est.: estimate. 1 2 http://dx.doi.org/10.1787/384501087786 Source: OECD and FAO Secretariats.

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

203

ANNEX A

Table A.24. World dairy projections (butter and cheese) Average 2002-06

Calendar yeara

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

BUTTER OECDb Production

kt pw

3 679

3 618

3 580

3 581

3 586

3 601

3 612

3 612

3 619

3 623

3 626

3 628

Consumption

kt pw

3 076

3 184

3 189

3 177

3 168

3 170

3 171

3 165

3 159

3 153

3 146

3 138

Stock changes

kt pw

4

–37

–8

–4

–3

–3

–2

–3

–3

–3

–4

–4

Production

kt pw

4 666

5 597

5 976

6 213

6 415

6 606

6 815

7 028

7 218

7 417

7 631

7 824

Consumption

kt pw

5 131

6 018

6 386

6 626

6 842

7 046

7 264

7 483

7 686

7 896

8 120

8 323

Production

kt pw

8 345

9 215

9 556

9 793

10 002

10 208

10 427

10 640

10 837

11 040

11 256

11 452

Consumption

kt pw

8 207

9 202

9 575

9 803

10 010

10 216

10 435

10 648

10 845

11 049

11 266

11 462

Stock changes

kt pw

–2

–43

–18

–9

–8

–7

–7

–7

–7

–8

–8

–9

Pricec

USD/100 kg

162

294

301

290

266

256

257

260

264

268

270

272

Non-OECD

WORLD

CHEESE OECDb Production

kt pw

14 163

14 974

15 332

15 642

15 867

16 041

16 228

16 389

16 542

16 688

16 846

16 980

Consumption

kt pw

13 729

14 555

14 919

15 201

15 423

15 606

15 801

15 973

16 150

16 315

16 493

16 649

Stock changes

kt pw

–6

–34

–7

5

11

5

6

8

9

9

11

5

Production

kt pw

3 966

4 314

4 420

4 503

4 623

4 734

4 841

4 947

5 055

5 155

5 254

5 345

Consumption

kt pw

4 340

4 750

4 848

4 946

5 064

5 172

5 270

5 362

5 445

5 525

5 602

5 678

Production

kt pw

18 129

19 289

19 752

20 145

20 491

20 776

21 070

21 336

21 597

21 842

22 099

22 325

Consumption

kt pw

18 069

19 305

19 767

20 147

20 487

20 777

21 071

21 335

21 595

21 840

22 095

22 326

Stock changes

kt pw

–14

–53

–14

–2

4

–2

–1

1

2

2

4

–2

Priced

USD/100 kg

235

402

419

394

360

350

350

352

354

356

357

358

Non-OECD

WORLD

a) Year ending 30 June for Australia and 31 May for New Zealand in OECD aggregate. b) Excludes Iceland but includes the 8 EU members that are not members of the OECD. c) f.o.b. export price, butter, 82% butterfat, Oceania. d) f.o.b. export price, cheddar cheese, 39% moisture, Oceania. est.: estimate. Source: OECD and FAO Secretariats.

1 2 http://dx.doi.org/10.1787/384510536625

204

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.25. World dairy projections (powders and casein) Calendar yeara

Average 2002-06

2007 est.

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

SKIM MILK POWDER OECDb Production

kt pw

2 695

2 524

2 581

2 566

2 576

2 598

2 625

2 644

2 679

2 718

2 767

2 808

Consumption

kt pw

1 970

1 789

1 850

1 874

1 892

1 903

1 921

1 930

1 941

1 950

1 962

1 970

Stock changes

kt pw

–70

–2

4

3

2

1

1

1

–1

0

0

0

Non-OECD Production

kt pw

729

678

781

834

863

893

931

972

998

1 012

1 019

1 025

Consumption

kt pw

1 478

1 450

1 447

1 468

1 500

1 540

1 593

1 650

1 707

1 755

1 805

1 846

Production

kt pw

3 424

3 201

3 362

3 400

3 440

3 491

3 556

3 617

3 677

3 730

3 786

3 833

Consumption

kt pw

3 376

3 238

3 297

3 342

3 392

3 443

3 514

3 580

3 648

3 705

3 766

3 817

Stock changes

kt pw

–70

–1

6

4

4

3

3

3

1

2

2

1

Pricec

USD/100 kg

191

432

355

331

314

308

306

305

303

304

304

305

WORLD

WHOLE MILK POWDER OECDb Production

kt pw

1 887

1 802

1 690

1 700

1 737

1 750

1 773

1 791

1 804

1 820

1 835

1 854

Consumption

kt pw

741

738

724

722

721

720

717

715

715

714

713

713

Production

kt pw

1 834

2 219

2 379

2 440

2 514

2 595

2 667

2 740

2 819

2 899

2 969

3 043

Consumption

kt pw

2 665

3 073

3 347

3 421

3 533

3 628

3 726

3 818

3 910

4 007

4 093

4 186

Production

kt pw

3 721

4 021

4 069

4 140

4 251

4 346

4 440

4 531

4 623

4 719

4 805

4 897

Consumption

kt pw

3 406

3 810

4 071

4 142

4 253

4 348

4 442

4 533

4 624

4 721

4 807

4 899

Priced

USD/100 kg

192

417

366

333

311

304

303

305

307

308

310

311

Wholesale price, USAe USD/100 kg

54

134

92

88

93

96

101

102

104

109

111

114

577

1 030

957

805

807

753

784

755

777

757

772

759

Non-OECD

WORLD

WHEY POWDER Non-OECD CASEIN Pricef

USD/100 kg

a) Year ending 30 June for Australia and 31 May for New Zealand in OECD aggregate. b) Excludes Iceland but includes the 8 EU members that are not members of the OECD. c) f.o.b. export price, non-fat dry milk, 1.25% butterfat, Oceania. d) f.o.b. export price, WMP 26% butterfat, Oceania. e) Edible dry whey, Wisconsin, plant. f) Export price, New Zealand. est.: estimate. Source: OECD and FAO Secretariats.

1 2 http://dx.doi.org/10.1787/384511341810

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

205

ANNEX A

Table A.26. Butter projections Growthb (%)

PRODUCTION (kt) Calendar yeara

Average 2005-07 2008 est.

WORLD DEVELOPED NORTH AMERICA Canada

2017

Growthb (%)

IMPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

EXPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

8 798

9 556

11 452

2.69

2.00

731

745

916

2.67

2.32

840

745

916

2.06

4 017

3 980

4 139

–0.15

0.44

285

302

373

2.61

2.49

745

632

736

1.24

2.32 1.71

727

747

811

1.68

0.96

25

23

24

–0.96

0.35

17

38

17

13.88

–5.86 –3.83

78

83

87

–1.12

0.21

10

8

8

10.80

0.00

3

3

2

–11.27

648

664

724

2.05

1.06

16

15

16

–4.70

0.52

14

35

15

23.44

–5.98

2 202

2 145

1 956

–0.66

–0.99

96

91

91

–1.45

0.05

260

108

60

2.76

–6.76

2 133

2 078

1 889

–0.66

–1.02

86

80

80

–1.62

0.00

257

104

57

2.91

–7.02

503

526

643

1.01

2.16

144

164

243

2.94

4.66

68

87

107

7.59

2.75

Russian Federation

273

278

326

0.55

1.61

108

131

199

3.29

4.95

3

3

3

–1.07

0.00

Ukraine

108

110

129

–1.37

1.86

0

0

0

–30.66

0.00

21

27

30

5.63

2.40

492

470

634

–1.02

3.22

9

10

10

0.26

0.00

400

394

553

–0.39

3.58

Australia

142

117

176

–3.16

4.47

9

10

10

1.56

0.00

78

73

125

–5.15

5.78

New Zealand

350

353

458

–0.03

2.77

0

0

0

7.66

0.00

323

322

427

1.06

3.00

OTHER DEVELOPED

93

92

95

–1.04

0.23

10

15

4

20.27

–12.65

0

5

0

–33.30

–25.52

Japan

80

75

80

–1.39

0.69

8

14

3

39.96

–15.97

0

0

0

–68.37

0.00

South Africa

13

17

16

1.85

–1.80

2

1

1

–0.10

11.46

0

5

0

–33.92

–25.52

United States EUROPE EU(27) CIS

OCEANIA DEVELOPED

DEVELOPING

4 781

5 576

7 313

5.66

2.99

445

443

544

2.89

2.21

95

113

180

10.14

5.23

AFRICA

240

255

308

2.81

2.19

113

110

125

1.38

1.25

1

1

1

–4.37

–0.51

NORTH AFRICA

166

179

224

3.47

2.57

94

90

96

0.90

0.56

0

0

0

1.31

–1.64

2

2

2

2.49

0.58

13

12

14

6.43

0.95

0

0

0

–75.51

9.04

121

131

166

3.70

2.65

48

44

32

–1.22

–3.22

0

0

0

8.75

3.31

74

76

84

1.43

1.23

19

20

29

4.09

3.92

1

1

1

–5.06

–0.31 6.45

Algeria Egypt SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

219

231

288

1.52

2.13

26

21

32

–6.13

5.14

25

35

64

4.48

Argentina

44

41

44

–1.40

0.13

0

0

0

–77.77

0.00

10

13

23

8.14

6.28

Brazil

78

81

106

1.27

2.47

1

1

8

–38.87

33.02

2

2

2

20.10

–0.87

Chile

17

20

26

6.13

3.19

2

1

0

5.89

5.45

1

2

2

22.03

–0.03

Mexico

15

15

15

0.72

–0.23

4

4

5

32.77

2.34

0

0

0

–35.79

23.20

Uruguay

15

18

31

–0.19

6.29

0

0

0

–46.95

0.00

9

12

24

–1.46

7.81

4 322

5 090

6 717

6.09

3.06

307

312

387

4.64

2.32

68

76

115

13.79

4.68

ASIA and PACIFIC Bangladesh c China

20

23

20

1.99

–0.48

1

1

1

–8.48

–4.50

0

2

0

–84.50

–23.47

120

142

207

5.69

4.12

33

34

39

9.73

1.66

0

0

0

–7.17

0.00

3 191

3 894

5 235

7.60

3.24

2

0

0

–13.54

0.00

13

10

10

30.09

0.00

0

0

0

0.00

–3.09

12

13

17

4.15

3.45

0

0

0

–7.95

5.17

154

163

204

1.63

2.64

37

31

27

11.12

–2.21

0

0

1

4.37

8.35

Korea

5

4

4

8.07

1.26

1

1

1

8.76

1.07

0

0

0

17.99

0.00

Malaysia

0

0

0

0.00

0.96

12

12

13

4.39

0.65

1

1

0

4.33

–9.29

Pakistan

590

598

756

3.02

2.67

0

11

22

–19.85

13.75

0

0

0

–43.76

9.04

5

5

5

0.33

0.67

44

55

99

10.07

6.56

31

40

85

71.07

8.24

123

141

145

0.78

0.28

7

3

6

5.63

6.97

0

0

0

–2.65

–4.77

India Indonesia Iran, Islamic Republic of

Saudi Arabia Turkey

158

156

155

1.22

0.23

12

14

35

2.60

8.83

1

3

1

–2.02

–4.19

OECD

LEAST DEVELOPED COUNTRIES (LDC)

3 627

3 580

3 628

–0.28

0.17

142

138

133

0.10

–0.47

675

537

627

0.84

1.70

NON-OECD

5 171

5 976

7 824

5.25

2.96

588

607

784

2.65

2.87

165

208

289

8.51

3.79

For notes, see end of the table.

206

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.26. Butter projections (cont.) Growthb (%)

CONSUMPTION (kt) Calendar yeara

WORLD DEVELOPED NORTH AMERICA Canada United States

Average 2005-07 est.

2008

2017

8 731

9 575

11 462

2.95

1.99

3 597

3 659

3 781

0.23

0.38

722

741

819

1.30

87

86

92

0.29

1998-2007

2008-17

Growthb (%)

PER CAPITA (kg) Average 2005-07 est.

2008

2017

1998-2007

2008-17

1.3

1.4

1.5

1.73

0.88

2.7

2.7

2.7

–0.16

0.12

1.06

2.2

2.2

2.2

0.30

0.18

0.41

2.7

2.6

2.6

–0.70

–0.43

635

655

727

1.44

1.15

2.1

2.1

2.2

0.44

0.26

2 091

2 129

1 988

–0.42

–0.71

4.0

4.0

3.7

–0.73

–0.81

2 014

2 054

1 912

–0.43

–0.74

4.1

4.2

3.8

–0.75

–0.84

579

603

779

0.60

2.80

2.1

2.2

2.8

0.80

2.91

377

406

521

0.80

2.78

2.6

2.9

3.9

1.25

3.28

87

83

99

–2.50

1.78

1.9

1.8

2.3

–1.68

2.56

102

85

92

–0.80

0.90

4.1

3.4

3.3

–1.98

–0.02

Australia

71

54

60

–1.23

1.43

3.4

2.6

2.6

–2.43

0.48

New Zealand

31

31

31

0.00

–0.07

7.6

7.5

6.9

–1.10

–0.85

EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED

OTHER DEVELOPED

102

99

103

1.06

0.52

0.6

0.6

0.6

0.68

0.54

Japan

88

87

86

0.65

–0.14

0.7

0.7

0.7

0.53

0.04

South Africa

14

12

17

4.63

4.39

0.3

0.3

0.3

3.53

3.98

5 134

5 916

7 681

5.34

2.88

1.0

1.1

1.3

3.89

1.56

AFRICA

352

364

432

2.35

1.92

0.4

0.4

0.4

–0.05

–0.31

NORTH AFRICA

260

269

320

2.46

1.93

1.1

1.1

1.1

0.54

0.14

Algeria

14

14

15

5.95

0.90

0.4

0.4

0.4

4.47

–0.54

Egypt

169

175

198

2.08

1.44

2.3

2.3

2.2

0.26

–0.17

92

95

112

2.05

1.88

0.1

0.1

0.1

–0.52

–0.51

DEVELOPING

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

221

225

258

0.26

1.42

0.4

0.4

0.4

–1.02

0.28

Argentina

34

34

21

–3.76

–5.10

0.9

0.9

0.5

–4.75

–6.00

Brazil

77

79

112

–0.86

3.56

0.4

0.4

0.5

–2.23

2.40

Chile

17

18

24

5.50

2.98

1.1

1.1

1.3

4.38

2.08

Mexico

19

19

20

3.69

0.35

0.2

0.2

0.2

2.83

–0.63

Uruguay ASIA and PACIFIC Bangladesh

8

8

9

12.70

1.76

2.4

2.3

2.7

12.57

1.42

4 562

5 327

6 991

5.91

2.99

1.2

1.4

1.6

4.64

1.88

20

22

21

1.50

–0.18

0.1

0.1

0.1

–0.38

–1.73

152

176

246

6.49

3.70

0.1

0.1

0.2

5.83

3.04

3 181

3 883

5 225

7.52

3.24

2.8

3.3

3.9

5.89

1.94

12

12

17

4.36

3.44

0.1

0.1

0.1

3.06

2.46

191

194

230

2.96

1.95

2.7

2.7

2.8

1.93

0.62

6

5

6

7.78

1.22

0.1

0.1

0.1

7.27

1.03

Malaysia

11

11

12

3.77

1.22

0.4

0.4

0.4

1.80

–0.25

Pakistan

590

608

778

3.01

2.87

3.7

3.6

3.9

1.13

0.98

17

20

20

–5.07

0.07

0.7

0.8

0.7

–7.59

–1.97

129

144

151

0.98

0.50

1.8

1.9

1.8

–0.41

–0.60

169

167

189

1.39

1.43

0.2

0.2

0.2

–1.01

–0.81

OECD

3 134

3 189

3 138

0.06

–0.15

2.6

2.6

2.5

–0.55

–0.61

NON-OECD

5 597

6 386

8 323

4.85

2.92

1.0

1.2

1.3

3.48

1.66

Chinac India Indonesia Iran, Islamic Republic of Korea

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC)

a) Year ending 30 June for Australia and 31 May for New Zealand. b) Least-squares growth rate (see glossary). c) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384560706230

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

207

ANNEX A

Table A.27. Cheese projections Growthb (%)

PRODUCTION (kt) Calendar yeara

WORLD DEVELOPED

Average 2005-07 2008 est.

2017

Growthb (%)

IMPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

EXPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

18 977

19 752

22 325

2.42

1.33

1 503

1 623

2 113

4.07

2.86

1 558

1 623

2 113

4.10

15 560

16 168

18 064

2.37

1.18

904

997

1 218

4.38

2.24

1 325

1 335

1 587

2.75

1.70

4 637

4 811

5 299

2.49

1.06

225

234

289

1.87

2.36

48

45

41

–3.60

–0.82

NORTH AMERICA Canada

2.86

358

358

400

1.11

1.25

21

19

19

–0.97

0.00

10

7

8

–11.89

1.96

4 280

4 454

4 900

2.61

1.04

204

215

271

2.19

2.55

38

38

33

–0.33

–1.45

9 145

9 591

10 432

1.89

0.88

164

169

189

–2.38

1.27

656

710

595

2.36

–1.95

8 811

9 256

10 096

1.93

0.91

99

101

119

–5.64

1.82

586

643

530

3.00

–2.12

1 030

1 036

1 342

8.47

2.74

253

321

410

22.77

2.67

134

109

265

22.30

8.68

Russian Federation

597

602

705

6.29

1.69

239

304

376

23.25

2.32

5

5

5

11.53

0.00

Ukraine

247

214

350

17.03

4.64

8

11

22

19.36

7.38

75

30

131

33.18

11.97

United States EUROPE EU(27) CIS

OCEANIA DEVELOPED

669

645

895

1.56

3.37

49

54

59

5.11

1.23

485

457

684

2.08

4.14

Australia

375

344

446

1.52

2.47

49

54

59

6.16

1.23

214

178

264

2.39

3.56

New Zealand

294

301

448

1.63

4.36

0

0

0

–12.36

0.00

272

279

420

1.87

4.53

OTHER DEVELOPED

79

84

96

1.11

2.29

214

219

270

1.47

2.41

2

13

2

3.87

–23.20

Japan

40

40

38

1.55

–0.74

210

214

266

1.39

2.52

0

0

0

12.07

0.00

South Africa

39

44

58

0.69

4.47

4

5

4

5.56

–4.59

2

13

2

2.81

–23.20

DEVELOPING

3 417

3 585

4 260

2.69

1.99

598

626

896

4.47

3.78

232

289

527

15.32

7.42

AFRICA

874

901

1 088

4.19

2.27

86

90

199

5.35

8.27

42

66

94

18.34

5.11

NORTH AFRICA

681

698

858

5.14

2.49

71

76

175

6.92

8.72

42

65

93

18.51

5.19

2

2

2

1.97

0.00

27

28

41

6.39

3.86

0

0

1

10.44

9.04

640

656

800

5.17

2.40

21

25

86

4.76

13.37

18

37

45

26.94

5.15

193

204

230

1.27

1.49

15

14

24

–0.14

5.50

0

1

1

6.76

–1.97

Algeria Egypt SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

1 498

1 565

1 901

1.68

2.16

176

188

257

3.67

3.40

138

159

316

13.57

8.29

Argentina

438

454

573

–0.41

2.51

2

0

0

–15.60

0.00

54

59

126

12.92

10.74

Brazil

493

514

616

1.81

2.06

5

5

6

–18.01

0.45

8

12

20

26.53

4.81

Chile

74

76

117

4.61

4.78

4

2

0

–3.80

4.25

16

21

54

40.81

10.90

Mexico

145

153

163

1.96

0.79

86

101

157

10.92

4.83

2

2

2

17.70

–0.18

Uruguay

41

43

59

7.23

3.45

0

0

0

–24.97

21.57

31

35

51

8.63

4.10

1 045

1 118

1 271

2.96

1.52

337

349

440

4.69

2.45

52

63

117

18.54

7.19

ASIA and PACIFIC Bangladesh c China

1

1

1

0.00

0.92

0

0

0

0.96

24.19

0

0

0

0.00

0.00

327

376

429

7.88

1.45

33

35

48

17.67

3.62

1

1

1

8.36

1.66

India

1

1

1

6.32

0.00

1

1

1

11.84

0.00

1

1

1

40.03

0.00

Indonesia

0

0

0

0.00

–3.20

4

4

8

–5.11

6.35

0

0

1

27.87

8.02

221

235

255

0.75

1.14

0

0

0

12.56

–15.21

1

7

4

35.47

1.64

30

34

69

12.13

7.67

45

46

55

11.41

2.07

0

0

0

7.05

0.00

Malaysia

0

0

0

0.00

0.85

8

8

10

9.08

1.98

0

0

0

–20.47

28.06

Pakistan

0

0

0

0.00

0.00

1

1

1

13.11

4.86

0

1

1

0.00

4.86

Saudi Arabia

0

0

0

0.00

0.00

70

78

103

0.49

3.16

32

38

78

35.02

8.07

127

129

156

–0.16

2.16

3

3

5

–2.93

8.49

1

0

0

–21.34

7.79

248

259

276

0.90

0.96

19

14

40

7.32

8.65

0

0

0

15.75

4.38

14 722

15 332

16 980

1.99

1.09

755

792

994

1.15

2.55

1 192

1 213

1 320

1.55

0.82

4 255

4 420

5 345

3.93

2.15

748

831

1 120

7.24

3.15

366

410

793

17.67

7.43

Iran, Islamic Republic of Korea

Turkey LEAST DEVELOPED COUNTRIES (LDC) OECD NON-OECD

For notes, see end of the table.

208

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.27. Cheese projections (cont.) Growthb (%)

CONSUMPTION (kt) Calendar yeara

Growthb (%)

PER CAPITA (kg)

Average 2005-07 est.

2008

2017

18 936

19 767

22 326

2.43

1.33

2.9

2.9

3.0

1.21

0.21

15 149

15 837

17 689

2.47

1.20

11.3

11.8

12.8

2.08

0.94

4 801

5 002

5 542

2.62

1.13

14.5

14.8

15.1

1.61

0.25

366

368

410

1.53

1.19

11.2

11.1

11.4

0.54

0.36

4 435

4 633

5 132

2.71

1.13

14.8

15.2

15.5

1.70

0.24

8 655

9 049

10 026

1.74

1.08

16.4

17.1

18.7

1.43

0.98

8 323

8 714

9 685

1.75

1.11

16.9

17.6

19.4

1.43

1.02

1 149

1 249

1 487

9.24

1.94

4.1

4.5

5.4

9.44

2.05

Russian Federation

832

902

1 076

9.13

1.92

5.8

6.4

8.0

9.58

2.41

Ukraine

179

196

241

13.77

2.48

3.9

4.3

5.6

14.59

3.27

253

248

269

1.73

0.99

10.2

9.8

9.8

0.55

0.07

225

220

241

1.96

1.11

10.9

10.4

10.5

0.76

0.16

28

28

28

0.00

–0.01

6.8

6.7

6.2

–1.10

–0.79

291

290

364

1.36

2.86

1.7

1.6

2.1

0.98

2.88

249

254

304

1.41

2.06

2.0

2.0

2.4

1.29

2.25

42

36

61

1.07

7.26

0.9

0.7

1.2

–0.02

6.85

3 787

3 930

4 637

2.50

1.82

0.7

0.7

0.8

1.04

0.51

AFRICA

918

925

1 193

3.88

2.86

1.0

1.0

1.0

1.49

0.63

NORTH AFRICA

709

709

940

4.79

3.16

3.0

2.9

3.3

2.88

1.37

Algeria

28

29

41

6.13

3.62

0.8

0.8

1.1

4.65

2.17

Egypt

643

643

841

4.86

3.01

8.7

8.4

9.5

3.05

1.40

208

216

253

1.15

1.83

0.3

0.3

0.3

–1.42

–0.55

WORLD DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS

OCEANIA DEVELOPED Australia New Zealand OTHER DEVELOPED Japan South Africa DEVELOPING

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN

1998-2007

2008-17

Average 2005-07 est.

2008

2017

1998-2007

2008-17

1 543

1 601

1 849

1.32

1.53

2.7

2.8

2.9

0.04

0.38

Argentina

387

395

447

–1.57

1.01

9.9

9.9

10.4

–2.55

0.10

Brazil

490

508

602

1.15

1.97

2.6

2.6

2.8

–0.22

0.81

Chile

62

56

63

1.10

1.09

3.8

3.4

3.5

–0.02

0.19

Mexico

229

251

319

4.61

2.62

2.2

2.4

2.8

3.75

1.64

Uruguay

10

8

8

0.64

–0.08

3.0

2.4

2.3

0.52

–0.43

1 326

1 404

1 594

3.00

1.43

0.3

0.4

0.4

1.73

0.32

1

1

2

–0.96

2.70

0.0

0.0

0.0

–2.84

1.15

359

411

477

8.55

1.65

0.3

0.3

0.3

7.88

0.99

1

1

1

–2.43

0.00

0.0

0.0

0.0

–4.06

–1.31

ASIA and PACIFIC Bangladesh Chinac India Indonesia Iran, Islamic Republic of Korea

4

4

7

–5.82

6.21

0.0

0.0

0.0

–7.13

5.23

220

229

251

0.70

1.07

3.1

3.2

3.1

–0.33

–0.26

75

80

124

11.64

4.82

1.6

1.7

2.5

11.13

4.64

Malaysia

8

8

10

9.48

2.12

0.3

0.3

0.3

7.51

0.65

Pakistan

1

0

0

19.56

0.00

0.0

0.0

0.0

67.05

0.00

38

40

25

–7.59

–5.23

1.6

1.6

0.8

–10.11

–7.28

130

132

162

0.24

2.32

1.8

1.7

1.9

–1.14

1.22

267

273

315

1.27

1.64

0.4

0.4

0.3

–1.12

–0.60

14 297

14 919

16 649

2.00

1.18

11.8

12.2

13.0

1.39

0.73

4 639

4 848

5 678

3.76

1.76

0.9

0.9

0.9

2.38

0.50

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC) OECD NON-OECD

a) Year ending 30 June for Australia and 31 May for New Zealand. b) Least-squares growth rate (see glossary). c) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384632178228

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

209

ANNEX A

Table A.28. Skim milk powder projections Growthb (%)

PRODUCTION (kt) Calendar yeara

Average 2005-07 2008 est.

WORLD

2017

Growthb (%)

IMPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

EXPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

3 214

3 362

3 833

–1.35

1.52

1 204

1 192

1 549

0.05

3.08

1 093

1 192

1 549

–1.33

3.08

2 733

2 844

3 097

–1.92

1.05

143

154

153

–3.73

0.24

971

1 051

1 279

–1.82

2.51

769

852

1 062

2.08

2.61

4

3

3

–5.86

0.00

259

322

415

5.91

3.51

74

87

94

0.19

0.75

3

3

3

28.88

0.00

13

15

10

–14.98

–2.85

695

765

968

2.30

2.81

1

0

0

–24.43

0.00

247

308

405

8.66

3.73

955

955

825

–4.28

–1.53

25

25

15

–8.42

–4.88

164

139

53

–13.50

–10.28

924

926

796

–4.37

–1.59

19

20

10

–11.12

–6.72

148

122

36

–14.78

–13.15

252

252

279

–6.92

1.08

71

76

99

5.31

3.48

106

116

148

8.21

2.62

81

80

93

–16.36

1.58

49

50

58

3.14

2.43

1

1

1

–35.82

0.00

130

132

145

1.69

1.09

0

0

1

–17.70

7.99

64

70

76

11.31

0.76

564

547

669

2.70

2.18

4

4

5

0.74

2.01

441

419

585

1.12

3.54

Australia

195

162

231

–3.05

3.68

4

4

5

4.22

2.01

162

129

197

–3.16

4.23

New Zealand

369

385

439

6.86

1.46

0

0

0

5.00

0.00

279

291

388

4.18

3.21

OTHER DEVELOPED

193

238

261

–0.95

1.52

39

46

31

–5.98

–4.51

1

55

78

–11.19

5.02

180

173

174

–1.09

0.04

33

42

29

–7.21

–3.96

0

0

0

0.00

0.00

13

65

87

2.68

4.38

6

5

2

12.48

–10.75

1

55

78

–11.19

5.02

480

518

736

3.10

3.76

1 061

1 038

1 395

1.19

3.44

122

140

269

6.34

6.31

AFRICA

3

3

3

–0.17

0.00

157

156

211

–1.44

3.33

2

2

2

–5.10

–2.01

NORTH AFRICA

0

0

0

0.00

0.00

114

109

138

–0.67

2.63

1

1

0

–5.71

–13.36

Algeria

0

0

0

0.00

0.00

51

49

62

–7.30

2.76

0

0

0

–5.43

0.00

Egypt

0

0

0

0.00

0.00

28

35

30

5.16

–1.48

0

1

0

–24.34

–25.77

DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED

Japan South Africa DEVELOPING

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN Argentina

3

3

3

–0.17

0.00

43

47

72

–3.30

4.82

1

2

2

–4.61

1.08

229

240

355

5.02

4.39

198

200

253

–4.08

2.60

30

42

125

–2.75

10.63 3.46

29

33

39

–5.13

2.01

0

0

0

–14.68

0.00

17

22

31

–1.78

Brazil

118

129

151

9.78

1.82

8

4

7

–22.62

2.27

4

4

12

19.25

4.32

Chile

16

22

60

6.88

10.99

4

1

0

–15.44

4.92

0

1

24

27.62

33.77

Mexico

32

32

35

2.82

1.19

126

135

175

2.18

2.90

0

0

0

–11.10

–0.26

Uruguay

12

18

63

–3.86

13.12

0

0

0

–31.93

33.68

7

13

57

–9.73

15.13

249

275

378

1.57

3.23

706

682

932

3.92

3.70

90

96

143

13.13

3.70

0

0

0

0.00

0.00

7

3

6

–9.92

6.12

0

0

0

34.70

0.00

57

57

111

2.28

7.25

53

40

88

16.02

9.01

2

5

5

5.04

0.00

161

179

209

1.26

1.31

0

0

0

–33.64

0.00

44

50

70

37.66

2.49

Indonesia

0

0

0

0.00

0.00

87

89

111

5.08

2.32

3

0

0

18.39

0.00

Iran, Islamic Republic of

0

0

0

0.00

0.00

7

9

14

6.45

4.05

0

1

0

–21.66

–6.59

ASIA and PACIFIC Bangladesh c China India

Korea

21

23

42

4.00

6.65

6

6

2

9.63

–10.76

0

0

0

0.40

0.00

Malaysia

0

0

0

0.00

0.00

70

67

89

1.51

3.70

7

7

14

27.15

8.03

Pakistan

0

0

0

0.00

0.00

5

6

9

13.59

3.94

0

0

1

–9.98

8.35

Saudi Arabia

0

0

0

0.00

0.00

95

88

120

18.54

3.98

3

1

0

–1.50

0.97

Turkey

0

0

0

0.00

0.00

4

3

5

1.36

4.99

0

0

0

–30.23

0.00

0

0

0

0.00

0.00

35

32

49

–11.05

4.71

1

1

1

–5.79

1.17

2 520

2 581

2 808

–1.20

1.00

197

213

230

–2.73

0.91

864

881

1 053

–2.36

2.27

693

781

1 025

–1.44

3.04

1 007

979

1 319

1.24

3.50

229

311

496

6.97

4.92

LEAST DEVELOPED COUNTRIES (LDC) OECD NON-OECD

For notes, see end of the table.

210

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.28. Skim milk powder projections (cont.) Growthb (%)

CONSUMPTION (kt) Calendar yeara

Average 2005-07 est.

2008

2017

1998-2007

3 330

3 297

3 817

–14.13

1.69

1 915

1 885

1 956

–14.19

0.40

569

529

650

4.32

71

75

87

498

455

833

Average 2005-07 est.

1998-2007

2008-17

0.5

–0.73

0.57

1.4

–2.59

0.14

1.6

1.8

3.31

1.25

2.2

2.2

2.4

7.14

0.54

2.25

1.7

1.5

1.7

2.79

1.37

–13.50

–0.74

1.6

1.6

1.5

–3.37

–0.84

769

–2.21

–0.75

1.7

1.7

1.5

–2.52

–0.85

230

–8.65

1.09

0.8

0.8

0.8

–8.45

1.20

129

150

–11.30

1.91

0.9

0.9

1.1

–10.85

2.41

66

62

70

–2.92

1.53

1.4

1.3

1.6

–2.10

2.31

64

72

75

–0.56

0.60

2.6

2.9

2.7

–1.74

–0.31

Australia

29

37

40

–5.50

1.13

1.4

1.8

1.7

–6.70

0.18

New Zealand

35

35

35

6.74

0.05

8.5

8.3

7.8

5.64

–0.74

232

230

214

–1.90

–0.79

1.3

1.3

1.2

–2.28

–0.78

214

215

203

–2.28

–0.64

1.7

1.7

1.6

–2.40

–0.46

18

15

11

7.24

–3.32

0.4

0.3

0.2

6.15

–3.72

1 415

1 413

1 860

1.34

3.22

0.3

0.3

0.3

–0.11

1.90

AFRICA

157

156

211

–1.39

3.35

0.2

0.2

0.2

–3.78

1.12

NORTH AFRICA

113

108

138

–0.60

2.69

0.5

0.4

0.5

–2.51

0.90

Algeria

51

49

62

–7.30

2.76

1.5

1.4

1.6

–8.78

1.32

Egypt

27

34

30

5.44

–1.30

0.4

0.4

0.3

3.63

–2.91 2.31

WORLD DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED

OTHER DEVELOPED Japan South Africa DEVELOPING

SUB-SAHARAN AFRICA

2008-17

Growthb (%)

PER CAPITA (kg)

2008

2017

0.5

0.5

1.4

1.4

2.13

1.7

8.13

1.38

564

3.80

842

787

812

824

217

212

129

44

48

73

–3.19

4.69

0.1

0.1

0.1

–5.76

396

399

484

0.10

2.40

0.7

0.7

0.8

–1.18

1.26

12

11

8

–9.86

–2.24

0.3

0.3

0.2

–10.84

–3.15

Brazil

122

129

146

2.74

1.79

0.6

0.7

0.7

1.38

0.63

Chile

19

22

36

0.00

5.66

1.1

1.3

2.0

–1.12

4.76

156

166

210

2.18

2.72

1.5

1.6

1.8

1.32

1.75

5

5

6

9.25

2.76

1.5

1.5

1.8

9.13

2.41

862

858

1 165

2.57

3.55

0.2

0.2

0.3

1.30

2.44 4.57

LATIN AMERICA and CARIBBEAN Argentina

Mexico Uruguay ASIA and PACIFIC Bangladesh

7

3

6

–9.90

6.12

0.0

0.0

0.0

–11.78

Chinac

108

92

194

7.25

8.30

0.1

0.1

0.1

6.58

7.63

India

117

129

139

–2.95

0.79

0.1

0.1

0.1

–4.57

–0.52

84

89

111

6.19

2.32

0.4

0.4

0.4

4.88

1.34

7

9

14

8.87

4.78

0.1

0.1

0.2

7.84

3.45

Korea

26

29

44

3.95

4.82

0.5

0.6

0.9

3.45

4.63

Malaysia

63

60

75

0.34

3.05

2.4

2.2

2.4

–1.63

1.58

Pakistan

5

6

8

12.73

3.51

0.0

0.0

0.0

10.85

1.62

92

87

120

21.37

4.03

3.8

3.5

4.0

18.84

1.98

4

3

5

2.42

4.99

0.1

0.0

0.1

1.03

3.89

34

31

48

–11.14

4.78

0.0

0.0

0.1

–13.53

2.54

OECD

1 862

1 850

1 970

–0.09

0.67

1.5

1.5

1.5

–0.70

0.21

NON-OECD

1 469

1 447

1 846

–14.04

2.89

0.3

0.3

0.3

0.16

1.63

Indonesia Iran, Islamic Republic of

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC)

a) Year ending 30 June for Australia and 31 May for New Zealand. b) Least-squares growth rate (see glossary). c) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384680338357

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

211

ANNEX A

Table A.29. Whole milk powder projections Growthb (%)

PRODUCTION (kt) Calendar yeara

Average 2005-07 2008 est.

WORLD

2017

Growthb (%)

IMPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

EXPORTS (kt)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

3 985

4 069

4 897

4.06

2.08

1 421

1 625

2 197

1.75

3.43

1 717

1 624

2 196

2.33

1 854

1 655

1 844

0.76

1.22

75

79

90

3.41

1.06

1 229

1 079

1 267

0.39

1.80

29

29

33

–12.30

1.40

23

20

20

9.50

0.00

1

1

1

–41.45

–0.64

Canada

15

14

11

–1.82

–2.81

21

18

18

12.02

0.00

0

0

0

–41.37

–4.25

United States

14

15

22

–18.01

4.22

2

2

2

–3.65

0.00

1

1

1

–27.50

0.00

866

718

557

–2.53

–2.73

7

7

7

–8.19

–0.81

454

334

212

–5.84

–4.82

842

696

534

–2.67

–2.83

2

2

1

–16.45

–3.50

452

331

209

–5.91

–4.88

136

141

176

3.65

2.50

37

43

57

2.37

2.97

38

46

59

17.81

2.77

Russian Federation

76

69

81

1.72

1.76

29

35

36

3.03

0.35

5

5

5

3.90

0.00

Ukraine

30

31

49

16.02

4.68

0

0

1

–31.79

8.58

21

21

35

36.01

5.51

795

740

1 049

5.64

3.79

8

7

5

3.60

–4.63

733

697

994

5.69

3.85

Australia

161

120

201

0.42

5.51

8

7

5

6.62

–4.63

103

81

149

–2.54

6.50

New Zealand

634

619

848

7.33

3.41

0

0

0

–1.46

0.00

630

616

845

7.70

3.43

OTHER DEVELOPED

28

27

29

–0.44

1.48

1

2

1

7.04

–9.03

2

0

0

–23.62

–6.85

Japan

14

14

12

–3.73

–1.31

0

0

0

7.25

0.00

0

0

0

0.00

0.00

South Africa

14

13

17

3.76

3.86

1

2

1

6.09

–9.03

2

0

0

–23.62

–6.85 6.13

DEVELOPED NORTH AMERICA

EUROPE EU(27) CIS

OCEANIA DEVELOPED

DEVELOPING

3.43

2 132

2 414

3 053

7.65

2.64

1 346

1 545

2 107

1.90

3.54

488

545

929

9.66

AFRICA

6

7

6

–4.63

0.29

345

369

533

6.13

4.02

8

8

10

–3.00

3.27

NORTH AFRICA

0

0

0

0.00

0.00

147

156

215

2.86

3.55

0

0

0

7.67

–8.14

Algeria

0

0

0

0.00

0.00

126

132

170

2.58

2.86

0

0

0

–59.55

9.04

Egypt

0

0

0

0.00

0.00

14

17

32

5.03

6.56

0

0

0

3.69

–11.33

SUB-SAHARAN AFRICA

6

7

6

–4.63

0.29

198

213

318

9.21

4.36

8

8

10

–2.75

3.45

1 067

1 131

1 443

4.30

2.84

262

289

311

–5.27

0.74

245

259

501

5.91

7.35

Argentina

244

268

458

1.65

5.92

2

0

0

–1.79

0.00

163

171

364

4.31

8.41

Brazil

463

496

565

8.63

1.76

27

36

40

–21.69

1.34

20

20

19

54.38

–0.35

LATIN AMERICA and CARIBBEAN

Chile

54

56

68

–2.18

2.07

3

0

0

–13.07

0.00

9

9

15

5.93

6.47

Mexico

184

187

189

4.65

0.07

42

41

42

0.08

0.09

10

10

10

2.21

0.09

Uruguay

21

24

39

2.71

5.69

0

0

0

–22.61

28.90

17

19

33

2.48

5.99

ASIA and PACIFIC

1 058

1 276

1 604

12.29

2.47

739

887

1 263

3.62

4.14

234

279

418

16.17

4.89

Bangladesh c China

0

0

0

0.00

0.00

22

25

67

3.14

10.42

0

0

0

0.00

0.00

1 033

1 244

1 561

12.15

2.44

65

97

164

3.99

8.32

43

75

48

27.95

–3.37

India

15

10

10

35.93

0.00

0

0

0

–2.10

0.00

15

10

10

67.42

0.00

Indonesia

0

0

0

0.00

–1.85

45

59

98

22.07

5.63

17

19

41

26.41

8.28

Iran, Islamic Republic of

1

1

1

1.82

–0.58

3

11

19

32.83

5.16

0

0

0

3.96

7.98

Korea

4

6

17

–0.37

12.51

2

2

3

22.49

3.20

0

0

0

13.60

0.00

Malaysia

0

0

0

0.00

1.15

41

43

50

–2.86

1.66

16

18

25

6.13

3.87

Pakistan

0

0

0

0.00

0.00

1

2

3

–27.95

5.94

0

0

1

–15.33

8.45

Saudi Arabia

0

0

0

0.00

0.00

74

88

151

5.84

6.03

31

37

81

63.83

8.64

Turkey

0

0

0

0.00

0.00

5

4

7

7.44

5.39

1

1

1

46.16

8.12

0

0

0

0.00

0.00

141

153

259

10.80

5.72

4

4

9

27.45

8.37

OECD

1 888

1 690

1 854

0.88

1.03

82

77

79

1.07

0.12

1 200

1 043

1 219

0.13

1.74

NON-OECD

2 097

2 379

3 043

7.59

2.78

1 339

1 547

2 118

1.89

3.58

517

581

977

9.75

5.99

LEAST DEVELOPED COUNTRIES (LDC)

For notes, see end of the table.

212

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.29. Whole milk powder projections (cont.) Growthb (%)

CONSUMPTION (kt) Calendar yeara

WORLD DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS Russian Federation Ukraine OCEANIA DEVELOPED Australia New Zealand OTHER DEVELOPED Japan South Africa

Average 2005-07 est.

2008

2017

3 693

4 071

4 899

3.97

2.08

700

654

666

1.70

0.19

51

49

52

–4.61

35

32

29

6.22

1998-2007

2008-17

Growthb (%)

PER CAPITA (kg) Average 2005-07 est.

2008

2017

1998-2007

2008-17

0.6

0.6

0.7

2.75

0.97

0.5

0.5

0.5

1.31

–0.07

0.88

0.2

0.1

0.1

–5.62

0.00

–1.11

1.1

1.0

0.8

5.23

–1.94

15

16

23

–15.38

4.01

0.1

0.1

0.1

–16.39

3.12

418

390

350

1.73

–1.19

0.8

0.7

0.7

1.42

–1.29

393

366

326

1.76

–1.27

0.8

0.7

0.7

1.44

–1.37

134

138

174

0.49

2.55

0.5

0.5

0.6

0.69

2.66

101

99

112

0.74

1.37

0.7

0.7

0.8

1.19

1.87

10

11

15

2.05

3.11

0.2

0.2

0.3

2.87

3.89

69

50

59

4.86

2.02

2.8

2.0

2.2

3.68

1.10

65

46

56

8.23

2.16

3.2

2.2

2.4

7.04

1.22

4

4

4

–11.25

0.00

0.9

0.9

0.8

–12.35

–0.78

28

29

30

4.42

0.53

0.2

0.2

0.2

4.04

0.55

14

14

12

–3.68

–1.31

0.1

0.1

0.1

–3.80

–1.13

14

15

18

24.97

2.02

0.3

0.3

0.3

7.75

1.62

2 993

3 416

4 233

4.64

2.41

0.6

0.6

0.7

3.19

1.09

AFRICA

342

367

529

6.19

3.99

0.4

0.4

0.5

3.79

1.76

NORTH AFRICA

147

156

215

2.93

3.56

0.6

0.6

0.7

1.02

1.77

Algeria

126

132

170

2.58

2.86

3.8

3.8

4.3

1.10

1.41

Egypt

14

17

32

5.63

6.62

0.2

0.2

0.4

3.81

5.01

195

211

314

9.25

4.30

0.3

0.3

0.4

6.68

1.92

1 089

1 165

1 255

1.30

0.94

1.9

2.0

2.0

0.02

–0.20

83

98

94

–3.39

–0.53

2.1

2.5

2.2

–4.38

–1.43

Brazil

474

512

586

3.69

1.81

2.5

2.7

2.7

2.32

0.65

Chile

48

47

53

–3.59

1.07

2.9

2.8

2.9

–4.71

0.17

216

218

220

3.77

0.07

2.1

2.1

1.9

2.91

–0.90

DEVELOPING

SUB-SAHARAN AFRICA LATIN AMERICA and CARIBBEAN Argentina

Mexico Uruguay ASIA and PACIFIC Bangladesh Chinac India Indonesia

7

7

9

10.95

2.73

2.1

2.2

2.7

10.83

2.38

1 562

1 884

2 449

7.21

2.91

0.4

0.5

0.6

5.94

1.80 8.87

22

25

67

3.14

10.42

0.1

0.2

0.4

1.27

1 055

1 266

1 678

11.21

3.13

0.8

0.9

1.2

10.54

2.46

0

0

0

2.17

0.00

0.0

0.0

0.0

0.54

–1.31 3.02

28

40

57

22.54

4.00

0.1

0.2

0.2

21.23

Iran, Islamic Republic of

4

12

20

18.84

4.69

0.1

0.2

0.2

17.81

3.36

Korea

6

8

20

4.03

10.59

0.1

0.2

0.4

3.53

10.41

Malaysia

25

26

25

–6.43

–0.20

1.0

0.9

0.8

–8.40

–1.67

Pakistan

1

1

2

–31.57

4.85

0.0

0.0

0.0

–33.45

2.96

43

51

70

–1.55

3.58

1.8

2.0

2.3

–4.08

1.53

4

4

6

5.90

4.92

0.1

0.1

0.1

4.51

3.81

136

148

248

10.30

5.66

0.2

0.2

0.3

7.91

3.42

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC) OECD NON-OECD

770

724

713

2.12

–0.18

0.6

0.6

0.6

1.51

–0.63

2 923

3 347

4 186

4.51

2.52

0.5

0.6

0.7

3.13

1.26

a) Year ending 30 June for Australia and 31 May for New Zealand. b) Least-squares growth rate (see glossary). c) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384685456054

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

213

ANNEX A

Table A.30. Milk projections Growthb (%)

PRODUCTION (kt) Calendar yeara

WORLD

Average 2005-07 2008 est.

2017

INVENTORIES ('000 hd)

Average 19982008-17 2005-07 2008 2007 est.

2017

Growthb (%)

Growthb (%)

YIELD (ton/hd)

Average 19982008-17 2005-07 2008 2007 est.

2017

19982008-17 2007

652 424

682 767

802 633

2.06

1.80

557 701

585 419

649 927

1.21

1.26

1.2

1.2

1.2

0.85

0.55

350 781

357 174

388 850

0.48

0.92

80 027

80 665

82 682

–0.79

0.28

4.4

4.4

4.7

1.27

0.64

90 509

94 527

102 113

1.44

0.84

10 111

10 212

9 907

–0.24

–0.37

9.0

9.3

10.3

1.69

1.22

8 208

8 355

8 822

–0.01

0.57

1 009

998

994

–1.46

–0.07

8.1

8.4

8.9

1.45

0.64

82 301

86 172

93 290

1.60

0.87

9 102

9 214

8 913

–0.10

–0.41

9.0

9.4

10.5

1.70

1.28

157 968

159 251

159 394

–0.30

0.00

31 285

30 700

28 384

–1.66

–0.86

5.1

5.2

5.6

1.36

0.86

147 846

149 222

149 352

–0.32

0.00

24 351

23 886

21 682

–2.00

–1.06

6.1

6.2

6.9

1.69

1.06

66 953

68 515

85 239

0.94

2.41

30 730

31 885

35 719

–0.59

1.32

2.2

2.1

2.4

1.53

1.09

Russian Federation

32 188

31 230

35 732

–0.09

1.46

10 556

10 498

11 176

–3.30

0.80

3.0

3.0

3.2

3.21

0.65

Ukraine

13 328

13 758

18 015

–0.08

2.90

5 516

5 466

6 133

–2.23

1.19

2.4

2.5

2.9

2.16

1.72

24 339

23 728

30 869

1.48

2.86

5 995

5 920

6 910

1.06

1.72

4.1

4.0

4.5

0.42

1.14 0.39

DEVELOPED NORTH AMERICA Canada United States EUROPE EU(27) CIS

OCEANIA DEVELOPED Australia

10 241

9 344

11 620

–0.30

2.57

1 874

1 777

2 147

–1.79

2.18

5.5

5.3

5.4

1.49

New Zealand

14 098

14 385

19 249

2.92

3.05

4 120

4 143

4 763

2.58

1.52

3.4

3.5

4.0

0.34

1.53

OTHER DEVELOPED

11 013

11 153

11 234

–0.33

–0.20

1 907

1 947

1 762

–1.44

–1.68

5.8

5.7

6.4

1.11

1.48

Japan

8 133

7 952

7 905

–0.63

–0.06

1 102

1 066

954

–1.85

–1.22

7.4

7.5

8.3

1.22

1.16

South Africa

2 881

3 201

3 330

0.56

–0.48

805

881

808

–0.79

–2.16

3.6

3.6

4.1

1.35

1.68

301 643

325 593

413 784

4.06

2.70

477 674

504 754

567 245

1.56

1.40

0.6

0.6

0.7

2.50

1.30

AFRICA

28 780

31 119

40 683

2.30

3.09

178 937

186 417

217 255

1.71

1.83

0.2

0.2

0.2

0.59

1.26

NORTH AFRICA

10 052

10 725

13 690

2.36

2.81

31 613

33 683

35 247

2.36

0.62

0.3

0.3

0.4

0.00

2.19

Algeria

1 735

2 032

2 468

2.85

2.26

9 196

10 261

10 365

2.50

0.26

0.2

0.2

0.2

0.35

2.00

Egypt

3 836

3 924

4 869

0.94

2.52

5 080

5 290

5 261

–1.95

0.12

0.8

0.7

0.9

2.90

2.40

SUB-SAHARAN AFRICA

18 727

20 394

26 993

2.26

3.23

147 324

152 734

182 008

1.58

2.07

0.1

0.1

0.1

0.68

1.15

LATIN AMERICA and CARIBBEAN

70 262

72 582

87 506

2.67

2.11

51 497

52 977

57 739

1.99

1.06

1.4

1.4

1.5

0.68

1.05

9 668

9 817

12 951

–0.39

3.05

2 107

2 149

2 377

–2.38

1.08

4.6

4.6

5.4

1.99

1.96

Brazil

26 317

27 141

31 699

4.01

1.82

21 440

22 114

23 867

2.87

1.14

1.2

1.2

1.3

1.14

0.68

Chile

2 413

2 565

3 405

2.16

3.09

2 132

2 239

2 899

2.16

2.74

1.1

1.1

1.2

0.00

0.35

Mexico

10 047

10 191

10 492

1.91

0.33

6 870

6 874

6 843

0.36

–0.05

1.5

1.5

1.5

1.54

0.38

Uruguay

1 787

1 896

2 655

2.74

3.74

1 042

1 057

1 269

2.88

2.04

1.7

1.8

2.1

–0.15

1.70

ASIA and PACIFIC

202 601

221 892

285 595

4.84

2.83

247 240

265 360

292 251

1.36

1.17

0.8

0.8

1.0

3.49

1.67

Bangladesh c China

2 316

2 683

3 615

1.38

3.52

21 394

24 653

30 789

0.74

2.71

0.1

0.1

0.1

0.64

0.81

35 406

42 758

62 197

17.56

4.11

17 823

19 274

20 176

7.73

0.50

2.0

2.2

3.1

9.83

3.61

India

98 293

104 234

128 541

3.33

2.36

74 861

76 794

84 581

1.98

1.15

1.3

1.4

1.5

1.35

1.22

881

943

1 270

2.88

3.28

9 018

9 251

11 258

1.02

2.15

0.1

0.1

0.1

1.86

1.12

Iran, Islamic Republic of

7 678

8 397

10 402

4.81

2.52

41 209

46 774

45 265

–0.50

–0.13

0.2

0.2

0.2

5.31

2.66

Korea

2 355

2 440

2 951

1.10

2.08

301

310

340

–0.45

1.06

7.8

7.9

8.7

1.55

1.02

Malaysia

46

49

59

3.03

2.08

96

100

120

1.07

1.98

0.5

0.5

0.5

1.96

0.11

Pakistan

31 139

33 306

41 780

3.21

2.58

27 673

29 451

34 734

2.87

1.86

1.1

1.1

1.2

0.34

0.72

1 221

1 328

1 859

4.93

3.65

4 725

5 032

5 752

2.84

1.41

0.3

0.3

0.3

2.09

2.24

11 598

13 392

17 556

2.38

2.98

22 626

25 612

28 073

–1.98

0.94

0.5

0.5

0.6

4.36

2.04

21 687

23 477

30 844

2.12

3.14

147 393

154 888

184 596

1.64

2.09

0.1

0.2

0.2

0.48

1.05

OECD

300 300

306 914

326 702

0.45

0.68

72 363

74 871

75 576

–1.17

0.08

4.1

4.1

4.3

1.63

0.60

NON-OECD

352 124

375 853

475 932

3.46

2.64

485 338

510 548

574 351

1.58

1.42

0.7

0.7

0.8

1.88

1.23

DEVELOPING

Argentina

Indonesia

Saudi Arabia Turkey LEAST DEVELOPED COUNTRIES (LDC)

a) Year ending 30 June for Australia and 31 May for New Zealand. b) Least-squares growth rate (see glossary). c) Refers to mainland only. The economies of Chinese Taipei, Hong Kong (China) and Macau (China) are included in the Other Asia Pacific aggregate. est.: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384733611086

214

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.31. Whey powder and casein projections Growthb (%)

Average

Calendar yeara 2005-07 est.

2008

2017

1997-2006b

2008-17

AUSTRALIA Net trade, whey

kt pw

78.8

87.7

89.0

11.83

0.05

Exports, casein

kt pw

10.9

7.2

10.5

0.19

3.51

kt pw

6.8

10.5

1.0

9.88

–30.97

kt pw

235.0

343.2

380.7

2.81

1.16

production

kt pw

141.0

146.9

191.6

–2.63

2.91

consumption

kt pw

117.0

104.9

126.5

–6.85

1.91

net trade

kt pw

24.0

42.0

65.1

11.82

5.15

Net trade, whey

kt pw

–57.0

–60.7

–69.7

2.75

1.56

Imports, casein

kt pw

17.1

16.1

13.9

–0.63

–1.69

kt pw

–37.8

–37.0

–39.9

3.09

0.84

kt pw

–51.3

–53.4

–49.2

–1.34

–0.93

CANADA Net trade, whey EU(27) Net trade, whey Casein EU(15)

JAPAN

KOREA Net trade, whey MEXICO Net trade, whey NEW ZEALAND Net trade, whey

kt pw

5.6

6.2

9.1

1.45

4.16

Exports, casein

kt pw

161.0

154.2

212.9

6.21

3.36

production

kt pw

492.6

523.8

465.5

–0.95

–1.23

consumption

kt pw

274.2

257.1

209.0

–5.67

–2.53

exports

kt pw

227.0

275.3

265.0

8.63

–0.04

Imports, casein

kt pw

69.1

66.8

64.0

–0.28

–0.55

kt pw

12.8

33.2

54.0

27.94

5.13

kt pw

–28.1

–29.1

–32.9

–3.49

1.65

kt pw

–202.0

–218.1

–320.8

12.05

4.16

kt pw

–47.7

–50.4

–62.4

37.58

2.37

UNITED STATES Whey

ARGENTINA Net trade, whey BRAZIL Net trade, whey CHINAc Net trade, whey RUSSIA Net trade, whey

a) Year ending 30 June for Australia and 31 May for New Zealand. b) Least-squares growth rate (see glossary). c) Refers to mainland only. d) est.: estimate. Source: OECD and FAO Secretariats.

1 2 http://dx.doi.org/10.1787/384752311164

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

215

ANNEX A

Table A.32. Main policy assumptions for biofuel markets 06/07

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

BRAZIL Ethanol Import tariffs

%

20.00

20.00

20.00

20.00

20.00

20.00

20.00

20.00

20.00

20.00

20.00

20.00

Incorporation mandatea

%

15.28

17.46

18.26

18.26

18.26

18.26

18.26

18.26

18.26

18.26

18.26

18.26

Biodiesel Tax concessionsb

BRL/hl

Import tariffs

%

7

7

6

6

5

4

4

3

2

1

1

0

4.60

4.60

4.60

4.60

4.60

4.60

4.60

4.60

4.60

4.60

4.60

4.60

CANADA Ethanol Tax concessionsb

CAD/hl

28

21

17

17

17

17

17

16

16

16

16

16

Import tariffs

CAD/hl

5.00

5.00

5.00

5.00

5.00

5.00

5.00

5.00

5.00

5.00

5.00

5.00

Incorporation mandatea

%

0.00

0.16

0.16

0.16

3.33

3.33

4.07

4.07

4.07

4.07

4.07

4.07

Direct support

CAD/hl

0.00

0.00

10.00

10.00

10.00

8.00

7.00

6.00

5.00

4.00

4.00

4.00

Biodiesel Tax concessionsb

CAD/hl

23

23

19

19

19

19

19

19

19

19

19

19

Incorporation mandatea

%

0.00

0.00

0.00

0.00

0.00

0.00

1.61

1.61

1.61

1.61

1.61

1.61

Direct support

CAD/hl

0.00

0.00

20.00

20.00

20.00

16.00

14.00

12.00

10.00

8.00

6.00

6.00

COLOMBIA Ethanol Import tariffs

%

9.65

9.65

9.65

9.65

9.65

9.65

9.65

9.65

9.65

9.65

9.65

9.65

Blending targetc

%

10.00

10.00

10.00

10.00

10.00

10.00

10.00

10.00

10.00

10.00

10.00

10.00

%

0.00

0.00

5.00

5.00

5.00

5.00

5.00

5.00

5.00

5.00

5.00

5.00

Biodiesel Blending target EU Ethanol Tax concessionsb

EUR/hl

30

30

30

30

30

30

30

30

30

30

30

30

Import tariffs

EUR/hl

19.20

19.20

19.20

19.20

19.20

19.20

19.20

19.20

19.20

19.20

19.20

19.20

Incorporation mandatea, d

%

0.15

0.56

1.13

2.19

2.63

2.69

2.76

2.83

2.91

2.98

2.98

2.98

Biodiesel Tax concessionsb

EUR/hl

48

34

34

34

34

34

34

34

34

34

34

34

Import tariffs

%

6.50

6.50

6.50

6.50

6.50

6.50

6.50

6.50

6.50

6.50

6.50

6.50

Incorporation mandatea, d

%

0.15

0.94

1.85

3.44

3.97

4.00

4.03

4.06

4.08

4.11

4.11

4.11

Import tariffs

%

26.31

26.31

26.31

26.31

26.31

26.31

26.31

26.31

26.31

26.31

26.31

26.31

Blending target

%

0.00

0.00

2.00

4.00

6.00

8.00

10.00

10.00

10.00

10.00

10.00

10.00

%

0.00

2.50

5.00

7.50

10.00

10.00

10.00

10.00

10.00

10.00

10.00

10.00

Import tariffs

%

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Blending target

%

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

%

0.00

0.00

1.67

3.33

5.00

5.00

5.00

5.00

5.00

5.00

5.00

5.00

Import tariffs

%

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Blending target

%

0.00

0.00

0.00

0.00

0.50

1.00

1.50

2.00

2.00

2.00

2.00

2.00

Import tariffs

%

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Blending target

%

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

INDONESIA Ethanol

Biodiesel Blending target MALAYSIA Ethanol

Biodiesel Blending target SOUTH AFRICA Ethanol

Biodiesel

For notes, see end of the table.

216

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

ANNEX A

Table A.32. Main policy assumptions for biofuel markets (cont.) 06/07

07/08 est.

08/09

09/10

10/11

11/12

12/13

13/14

14/15

15/16

16/17

17/18

THAILAND Ethanol Import tariffs

%

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Blending target

%

0.00

0.00

2.00

4.00

6.00

8.00

10.00

10.00

10.00

10.00

10.00

10.00

%

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

14.27

14.27

14.27

14.27

14.27

14.27

14.27

14.27

14.27

14.27

14.27

14.27

2.50

2.50

2.50

2.50

2.50

2.50

2.50

2.50

2.50

2.50

2.50

2.50

13.47

13.47

13.47

13.47

13.47

13.47

13.47

13.47

13.47

13.47

13.47

13.47

Biodiesel Blending target UNITED STATES Ethanol Import tariffs

USD/hl

Import tariffs

%

Blenders tax credit

USD/hl

Biodiesel Import tariffs

%

Blenders tax credit

USD/hl

4.60

4.60

4.60

4.60

4.60

4.60

4.60

4.60

4.60

4.60

4.60

4.60

26.42

26.42

26.42

26.42

26.42

26.42

26.42

26.42

26.42

26.42

26.42

26.42

a) Difference between tax rates applying to fossil and biogen fuels. b) Share in respective fuel type, energy equivalent. c) Applies to cities with more than 500 000 inhabitants. d) Note that for many countries, shares for ethanol and biodiesel are not specified individually in the legislation. est: estimate. Source: OECD and FAO Secretariats. 1 2 http://dx.doi.org/10.1787/384772733703

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

217

Production (mn l) Average 2005-07 est.

2008

2017

Domestic use (mn l) Growtha Average (%) 2005-07 2008-17 est.

2008

2017

Fuel use (mn l) Growtha Average (%) 2005-07 2008-17 est.

2008

2017

Share in gazoline type fuel use (%) Growtha Average (%) 2008-17 2005-07 est.

Net trade (mn l)

Energy shares 2008

2017

ANNEX A

218

Table A.33. Biofuel projections: ethanol

Volume Average Growtha shares 2005-07 (%) 2017 est. 2008-17

2008

2017

Growtha (%) 2008-17

North America Canada United States

762

1 383

2 730

5.05

939

1 608

2 983

5.83

735

1 400

2 757

6.34

1.26

2.34

4.07b

4.98

5.96

–178

–224

–253

–24.50

21 478

38 394

52 444

3.06

22 713

38 880

57 544

3.79

21 094

37 228

55 827

3.91

2.63

4.55

6.03

2.55

8.74

–1 235

–486

–5 100

0.00

2 049

4 402

11 883

10.53

4 649

7 297

14 707

7.37

2 127

4 748

11 962

9.58

1.00

2.19

4.88

8.22

7.11

–1 783

–2 895

–2 824

0.00

63

156

1 004

12.52

63

156

1 004

12.52

63

156

1 004

12.52

0.22

0.54

3.30

11.82

4.84

0

0

0

0.00

Western Europe EU27 Oceania developed Australia Other developed Japan

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

n.a.

–568

–825

–1 475

0.00

South Africa

410

369

683

6.32

99

134

527

8.32

0

0

367

32.98

0.00

0.00

1.87

–21.92

2.77

310

235

156

26.72

Ethiopia

33

38

74

8.27

33

34

39

1.32

0

1

6

13.36

0.00

0.34

0.67

5.01

1.00

4

4

35

28.25

Mozambique

21

24

28

2.00

22

23

28

2.46

0

1

5

22.20

0.00

0.34

1.86

17.89

2.75

–1

1

0

–1.39

Tanzania

26

29

43

4.28

30

35

51

4.07

0

5

18

14.96

0.00

1.01

2.54

10.07

3.75

–4

–6

–8

1.27

17 396

22 110

40 511

6.36

14 595

18 806

31 694

5.90

13 499

17 641

30 289

6.11

32.31

40.43

56.62

3.83

66.08

2 801

3 304

8 816

8.45

272

497

796

5.58

303

472

506

0.79

268

435

460

0.65

3.34

5.21

4.99

–0.43

7.27

–31

25

290

28.67

16

22

40

5.29

11

14

19

3.77

0

2

2

0.37

0.00

0.16

0.19

2.33

0.29

5

8

21

7.25

China

5 564

6 686

10 210

4.29

4 998

5 775

10 792

6.44

1 565

2 139

6 211

10.71

1.66

1.98

4.03

6.90

5.89

566

910

–583

–71.15

India

1 411

1 909

3 574

7.32

1 678

1 958

3 192

5.59

267

416

1 059

10.86

1.73

2.65

5.61

8.83

8.15

–267

–49

383

55.91

Indonesia

177

212

227

0.70

147

153

171

1.27

0

4

5

1.30

0.00

0.02

0.01

–2.69

0.02

30

59

56

–0.92

Malaysia

63

70

84

2.15

97

84

105

2.47

0

4

7

5.53

0.00

0.02

0.02

–0.78

0.03

–34

–14

–20

0.00

Philippines

62

105

126

1.98

109

147

170

1.58

17

50

50

0.00

0.24

0.70

0.53

–3.06

0.79

–47

–42

–44

0.00

285

408

1 790

18.90

266

366

1 530

15.96

134

229

1 374

19.80

1.26

2.08

11.70

19.09

16.51

19

42

260

37.81

Sub-Saharian Africa OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

Latin America and Caribbean Brazil Columbia Peru Asia and Pacific

Thailand Turkey Vietnam TOTAL

55

77

81

0.39

103

119

128

0.85

43

58

63

0.94

0.62

0.87

1.15

3.17

1.70

–48

–42

–48

0.00

140

164

532

13.90

134

139

164

1.85

0

0

0

0.70

0.00

0.00

0.00

–10.52

0.00

6

25

368

28.01

77 054 126 860

5.12

50 991

76 200 125 355

5.11

39 811

64 517 111 467

5.58

3.78

5.46

7.63

3.30

10.98

–454

30

30

0.00

50 284

a) Least-squares growth rate. b) Correspond to 5% of net-sale for on-road motor vehicles. For notes, see end of the table. est.: estimate, n.a.: Not available. Source: OECD and FAO Secretariats.

1 2 http://dx.doi.org/10.1787/384788645556

OECD-FAO AGRICULTURAL OUTLOOK 2008-2017 – ISBN 978-92-64-04590-3 – © OECD/FAO 2008

Table A.34. Biofuel projections: biodiesel Production (mn l)