Post on 10-Feb-2016
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Soaring Food Prices Soaring Food Prices and the EastAgri Regionand the EastAgri Region
EastAgri 2008 Annual Meeting, 11 September 2008
Stefan TangermannDirector for Trade and Agriculture
OECD Trade & Agriculture Directorate 22OECD Trade & Agriculture Directorate
Cereal prices in real terms, schematicCereal prices in real terms, schematic
OECD Trade & Agriculture Directorate 33OECD Trade & Agriculture Directorate
Cereal prices in real terms, schematicCereal prices in real terms, schematic
OECD Trade & Agriculture Directorate 44OECD Trade & Agriculture Directorate
Cereal prices in real terms, schematicCereal prices in real terms, schematic
OECD Trade & Agriculture Directorate 55OECD Trade & Agriculture Directorate
} 20-30% Bad weather Low stocks Panic
High oil price Weak dollar Biofuels
}Transitory
(1/3 of which: Biofuels)
Long-term}
? ?
Cereal prices in real terms, schematicCereal prices in real terms, schematic
OECD Trade & Agriculture Directorate 66OECD Trade & Agriculture Directorate
Historical Projected
March 2008
Wheat prices in real termsWheat prices in real terms
OECD Trade & Agriculture Directorate 77OECD Trade & Agriculture Directorate
Historical Projected
June 2008
Maize prices in real termsMaize prices in real terms
OECD Trade & Agriculture Directorate 88OECD Trade & Agriculture Directorate
Historical Projected
May 2008
Rice price in real termsRice price in real terms
OECD Trade & Agriculture Directorate 99OECD Trade & Agriculture Directorate
Historical Projected
April 2008
Oilseed price in real termsOilseed price in real terms
OECD Trade & Agriculture Directorate 10
World commodity prices trend higherWorld commodity prices trend higher
Percent growth between : average 2008-2017 and average 1998-2007
OECD Trade & Agriculture Directorate 1111OECD Trade & Agriculture Directorate
Wheat
Maize
Rice(right handaxis)
Is the bubble bursting?Is the bubble bursting?Weekly spot prices
Source: FAO
OECD Trade & Agriculture Directorate 12
What happens to world prices, if …What happens to world prices, if …Change in world prices expected for 2017, relative to baseline
Scenario 1: Biofuel production constant at 2007 level
Scenario 2: Scenario 1 + Oil price constant at 2007 levels (72$)
Scenario 3: Scenario 2 + Lower income growth in EE5 countries (half annual growth rate)
Scenario 4: Scenario 3 + Progressive appreciation of the USD exchange rates to reach 10% higher rates in 2017
Scenario 5: Scenario 4 + Yields for wheat, oilseeds and coarse grains 5% higher than over the production period
OECD Trade & Agriculture Directorate 13
Are China and India pushing up prices?Are China and India pushing up prices?Supply balance cereals (incl. rice)
China India
Historical Projected
OECD Trade & Agriculture Directorate 14
Oilseeds: Brazil mirrors ChinaOilseeds: Brazil mirrors ChinaSupply balance oilseeds
China Brazil
Historical Projected
OECD Trade & Agriculture Directorate 15
OECD countries loose export share OECD countries loose export share
OECD Trade & Agriculture Directorate 16
Will the CIS be the world's break basket?Will the CIS be the world's break basket?
Historical Projected
OECD Trade & Agriculture Directorate 17
Russia will feed its livestockRussia will feed its livestock
Historical Projected
OECD Trade & Agriculture Directorate 18
CIS oilmeal surplus will growCIS oilmeal surplus will grow
Oilmeal net trade
Historical Projected
OECD Trade & Agriculture Directorate 19
… … as will surplus of vegetable oilas will surplus of vegetable oil
Vegetable oil net trade
Historical Projected
OECD Trade & Agriculture Directorate 20
Butter: CIS intra-trade and overall net importsButter: CIS intra-trade and overall net imports
Historical Projected
OECD Trade & Agriculture Directorate 21
Cheese: CIS intra-trade and overall net importsCheese: CIS intra-trade and overall net imports
Historical Projected
OECD Trade & Agriculture Directorate 22
CIS to remain major meat import regionCIS to remain major meat import region
Historical Projected
OECD Trade & Agriculture Directorate 23
ConclusionsConclusions
• World prices will calm down
… but remain higher than in the past
… oil price, biofuel support policies are major drivers
• Global production and consumption shifts increasingly towards non-OECD countries
• CIS has potential to be major grains exporter
OECD Trade & Agriculture Directorate 24
Thank YouThank You
Trade and Agriculture Directorate
www.oecd.org/agriculturewww.oecd.org/agriculture
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