Emerging Economies Set To Drive Global Agricultural Markets, Says OECD-FAO

Emerging economies have significantly influenced global agricultural market trends over the past 20 years. According to a report released on Tuesday by the Food and Agriculture Organisation of the United Nations (FAO) and the Organisation for Economic Cooperation and Development (OECD), these economies are expected to continue this trend over the next decade.

The OECD-FAO Agricultural Outlook 2024-2033 serves as a crucial global reference for medium-term agricultural commodity market prospects. This year's edition marks the 20th anniversary of this joint publication, which has consistently analysed demographic and economic drivers of agricultural supply and demand.

A significant change anticipated in the coming decade is the growing influence of India, Southeast Asia, and Sub-Saharan Africa, alongside a diminishing role for China. While China contributed 28 percent to global agriculture and fisheries consumption growth in the last decade, its share is projected to drop to 11 percent due to factors like population decline, slower income growth, and stabilised nutrition patterns.

India and Southeast Asian countries are expected to account for 31 percent of global consumption growth by 2033. This increase is driven by urbanisation and rising affluence in these regions. Sub-Saharan Africa will also play a notable role, contributing 18 percent to additional global consumption primarily due to population growth-driven food demand.

Total agricultural and fisheries consumption is forecasted to grow by 1.1 percent annually over the next decade. Nearly all additional consumption is expected to occur in low- and middle-income countries. Middle-income countries will see a 7 percent rise in food calorie intake, mainly from staples, livestock products, and fats.

In low-income countries, calorie intake will grow by 4 percent. However, this rate is insufficient to meet the Sustainable Development Goal target of zero hunger by 2030. "The Outlook confirms the need to implement strategies that bridge productivity gaps in low- and middle-income countries," said FAO Director-General QU Dongyu.

Importance of Well-Functioning Agricultural Markets

OECD Secretary-General Mathias Cormann highlighted that global trade volumes of agricultural commodities are expected to rise between net exporting and importing regions over the next decade. He noted that regional shifts would reflect increased global consumption in India and Southeast Asian countries.

Cormann added that well-functioning agricultural markets, reducing food loss and waste, along with more productive and less polluting production methods, remain crucial for global food security. These measures are essential to ensure rural livelihoods benefit from global agrifood value chains.

The report underscores that bridging productivity gaps in low- and middle-income countries is vital for increasing domestic production and boosting farmers' incomes. This approach aligns with achieving sustainable development goals related to hunger reduction.

The analysis provided by the OECD-FAO Agricultural Outlook highlights key trends shaping future agricultural markets. It emphasises the importance of strategic interventions to support sustainable growth in emerging economies while addressing global food security challenges.

With inputs from WAM