Global food prices will continue to decline over next decade- UN and OECD report

YEREVAN, July 2. / ARKA /. Global food prices will continue to decline over the next decade as more food is produced than the world needs, according to a new report from the Organization for Economic Co-operation and Development and the UN's Food and Agriculture Organization, vestifinance reports citing foreign news reports.

Higher productivity and lower costs mean supply will continue to grow, but with global economic growth stumbling along, demand will not keep pace, according to the Agricultural Outlook produced by the OECD and FAO.

"Demand remains subdued due to the underperformance of the world economy," said Angel Gurria, the secretary general of the OECD, at a press conference on Wednesday.

There is some growth in food demand in developing countries, as income rises and people move into cities. This makes diets more diverse, but there is also an important shift in the balance of what people eat. There's less demand for traditional food staples, such as wheat and rice, and more demand for higher-priced proteins like meat, fish and dairy products.

That in turn means there will be more demand for grains to be used as feed for livestock, the report said. Over the next 10 years, feed demand will constitute almost 70% of the consumption of coarse grain, which is predominantly corn.

Lower oil prices, which translate to lower energy and fertilizer costs for farmers, will also lower food prices, the report added.

The increase in supply will largely be driven by better yields from crops in Asia, Europe and North America. In South America, there's likely to be an expansion of the amount of land that's devoted to agriculture, as well as yields. -0-