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Higher agriculture commodity prices here to stay

The joint report of FAO and OECD says that a good harvest in the coming months should push commodity prices down from the extreme levels seen earlier this year. However, the document states that over the coming decade real prices for agriculture commodity prices will remain higher, compared to 2001-10.

The joint 2011-2020 Agricultural Outlook of FAO and OECD says that a good harvest in the coming months should push commodity prices down from the extreme levels seen earlier this year. However, the outlook states that over the coming decade real prices for cereals could average 20% higher, and those for meats 30% higher, compared to 2001-10. These projections are well below the peak price levels experienced in 2007-08 and again this year.

Per-capita food consumption will expand most rapidly in Eastern Europe, Asia and Latin America, where incomes are rising and populations growth is slowing. Meat, dairy products, vegetable oils and sugar should experience the highest demand increases, according to the report.

Higher prices for commodities are being passed through the food chain, leading to rising consumer price inflation in most countries. This raises concerns for economic stability and food security in some developing countries, with poor consumers most at risk of malnutrition, the report says.

The outlook, which covers fisheries for the first time, sees global agricultural production growing more slowly over the next decade than in the past 10 years. Farm output is expected to rise by 1.7% annually, compared to the 2.6% growth rate of the past decade. Despite this slower growth, production per capita is still projected to rise by 0.7% annually.

Global production in the fisheries sector is projected to increase by 1.3% annually to 2020. This is slower than growth over the previous decade, due to reduced or stagnant capture of wild fish stocks and lower growth rates in aquaculture, which underwent a rapid expansion over the 2001-2010 period.

By 2015, aquaculture is projected to surpass capture fisheries as the most important source of fish for human consumption, and by 2020 should represent about 45% of total fishery production, including non-food uses.