World food prices likely to remain high over the next decade

NEW DELHI: Global food commodity prices are expected to remain high over the next decade on account of rising consumption and declining agricultural production, the latest OECD-FAO Agricultural Outlook has said.

"The Outlook anticipates that agricultural output growth will slow to an average of 1.7 per cent annually over the next 10 years, down from a trend rate of over 2 per cent per year in recent decades," it said.

The Paris-based Organisation for Economic Co-operation and Development and United Nation's body Food and Agriculture Organisation, in its OECD-FAO Agricultural Outlook 2012-2021, said population growth is also increasing demand pressures.

"While international agricultural commodity markets appear to have entered calmer conditions after record highs (in prices) last year, food commodity prices are anticipated to remain on a higher plateau over the next decade...", the FAO said on its website.

This, it said, is underpinned by firm demand but a slowing growth in global production.

The report points out that in addition to population growth, higher per capita incomes, urban migration and changing diets in developing countries, as well as rising requirements for biofuel feedstocks are underpinning demand pressures, it added.

Higher input costs, increasing resource constraints, growing environmental pressures and the impacts of climate change will all serve to dampen supply response, it added.

Read full article here