OECD–FAO Agricultural Outlook 2018–2027 · to demand over the past decade came from rising per capita incomes in the People’s Republic of China (hereafter “China”), which

OECD‑FAO Agricultural Outlook 2018‑2027

SpECiAl FOCuS: MiDDlE EASt AnD nOrth AFriCA

OECD‑FAO Agricultural Outlook 2018‑2027The joint OECD-FAO Agricultural Outlook provides market projections for major agricultural commodities, biofuels and fish. Each yearly edition contains a special country or regional focus.

The Agricultural Outlook 2018-2027 is a collaborative effort of the Organisation for Economic Co-operation and Development (OECD) and the Food and Agriculture Organization (FAO) of the United Nations. It brings together the commodity, policy and country expertise of both organisations as well as input from collaborating member countries to provide an annual assessment of the prospects for the coming decade of national, regional and global agricultural commodity markets.

This year's Special Feature will focus on agricultural development in the Middle East and North Africa.

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Consult this publication on line at http://dx.doi.org/10.1787/agr_outlook-2018-en.

This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases. Visit www.oecd-ilibrary.org for more information.

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1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027

The Agricultural Outlook 2018-2027 is a collaborative effort of the OECD and FAO prepared with input from the experts of

their member governments and from specialist commodity organisations. It provides a consensus assessment of the ten-year

prospects for agricultural and fish commodity markets at national, regional and global levels. This year’s edition contains a

special chapter on the prospects and challenges of agriculture and fisheries in the Middle East and North Africa.

Executive SummaryA decade after the food price spikes of 2007-8, conditions on world agricultural markets are

very different. Production has grown strongly across commodities, and in 2017 reached record

levels for most cereals, types of meat, dairy products, and fish, while cereal stock levels climbed

to all-time highs. At the same time, demand growth has started to weaken. Much of the impetus

to demand over the past decade came from rising per capita incomes in the People’s Republic

of China (hereafter “China”), which stimulated the country’s demand for meat, fish and animal

feed. This source of demand growth is decelerating, yet new sources of global demand are

not sufficient to maintain overall growth. As a result, prices of agricultural commodities are

expected to remain low. Current high cereal stock levels also make a rebound unlikely within

the next few years.

Figure 1. Medium-term evolution of commodity prices in real terms

OECD–FAOAgricultural Outlook2018–2027

Note: Price indices for commodity groups calculated using a constant weighting of commodities within each aggregate, using the average 2015-2017 production value as weights.

Prices of agricultural commodities are expected to remain broadly at current levels

Cereals DairyIndex (2015-17=100) Meat Oilseeds

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2008-17 2018-27 2008-17 2018-27 2008-17 2018-27 2008-17 2018-27 2008-17 2018-27 2008-17 2018-27

Global food demand follows population growth as per-capita consumption of many food items levels off

Growing need for animal feed pushes global crop mix towards maize and soybeans

Additional feedstock demand for biofuels mainly from blending mandates in emerging economies

Rising consumption of processed and convenience foods rich in sugar and oil causes health concerns

Figure 2. Regional contributions to food demand growth, 2008-17 and 2018-27

The weakening of demand growth is expected to persist over the coming decade. Population

growth will be the main driver of consumption growth for most commodities, even though

the rate of growth is forecast to decline further. Moreover, per capita consumption of many

commodities is expected to be flat at a global level. This is notable for staple foods such as

cereals as well as roots and tubers, where consumption levels are close to saturation levels

in many countries. By contrast, demand growth for meat products is slowing due to regional

variation in preferences and disposable income constraints, while demand for animal products

such as dairy is set to expand faster in the coming decade.

For cereals and oilseeds, demand growth will come from feed, closely followed by food. A

large share of additional feed demand will continue to come from China. Feed demand growth

is nevertheless projected to slow globally, despite livestock production intensification. Much

of the additional food demand will originate in regions with high population growth such as

Sub-Saharan Africa, India, and the Middle East and North Africa.

The demand for cereals, vegetable oil and sugar cane as inputs into the production of biofuels

is expected to grow much more modestly than in the last decade. Whereas in the past decade

the expansion of biofuels led to more than 120 Mt of additional cereals demand, predominately

maize, this growth is expected to be essentially zero over the Outlook period. In developed

countries, existing policies are not likely to support much further expansion. Future demand

growth will therefore come predominantly from developing countries, several of which have

introduced policies favouring biofuels use.

The exceptions to the broad pattern of slowing per capita demand growth come from sugar

and vegetable oils. The per capita intake of sugar and vegetable oil is expected to increase in

the developing world, as urbanisation leads to a rising demand for processed and convenience

foods. Changes in levels of food consumption and the composition of diets imply that the “triple

burden” of undernourishment, over-nourishment and malnutrition will persist in developing

countries.

Rest of World MENA China India Sub-Saharan Africa OECDMillion tonnes

Cereals Meat Fish Fresh dairy Sugar Vegetable oil

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High concentration of exports keeps markets vulnerable to supply shocks

Increasing uncertainties in the agricultural trade policy environment

Imports of basic foods expanding most in countries with rapid population growth

Growth in crop and livestock production based mainly on intensification and efficiency gains

Figure 3. Regional trends in production

Global agricultural and fish production is projected to grow by around 20% over the coming

decade, but with considerable variation across regions. Strong growth is expected in

Sub-Saharan Africa, South and East Asia, as well as the Middle East and North Africa. By

contrast, production growth in the developed world is expected to be much lower, especially

in Western Europe. The growth in production will be achieved primarily through intensification

and efficiency gains and partially through an enlargement of the production base via herd

expansion and the conversion of pasture to cropland.

With slower consumption and production growth, agriculture and fish trade is projected to

grow at about half the rate of the previous decade. Net exports will tend to increase from

land abundant countries and regions, notably in the Americas. Countries with high population

densities or high population growth, in particular in the Middle East and North Africa,

Sub-Saharan Africa and in Asia, will see rising net imports.

For nearly all agricultural products, exports are projected to remain concentrated among

stable groups of key supplying countries. A notable change is the emerging presence of the

Russian Federation and Ukraine on world cereal markets, which is expected to persist. The

high concentration of export markets may increase the susceptibility of world markets to supply

shocks, stemming from natural and policy factors.

As a baseline projection, the Agricultural Outlook 2018-2027 assumes policies currently in place

will continue into the future. Beyond the traditional risks that affect agricultural markets, there

are increasing uncertainties with respect to agricultural trade policies and concerns about the

possibility of rising protectionism globally. Agricultural trade plays an important role in ensuring

food security, underscoring the need for an enabling trade policy environment.

Figure 4. Regional net trade in agricultural products

2015-17

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n Africa

South and East

Asia

Western

Europe

Middle East and N

orth

Africa

Americas

Oceania

Eastern

Europe and

Central A

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2027 Growth in agriculture and fisheries production, 2015-2017 to 2027 (right axis)

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Note: The figure only includes commodities covered in the OutlookNote: The figure includes commodities covered in the Outlook as well as projections for the value of other agricultural commodities included in FAO estimates of net-value production (FAOSTAT)

Americas Western Europe

South and East Asia

Sub-Saharan Africa

Middle East and North Africa

Oceania

Eastern Europe and Central Asia






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Resource scarcity and political instability threaten food security in the MENA region

Cereals remain central to the region, in production, trade and diets

Alternative policy approaches could promote sustainable rural development and healthier diets

For enquiries or further information contact:

Holger Matthey([email protected])

Trade and Markets DivisionFood and Agriculture Organization of the United Nations

Hubertus Gay([email protected])

Trade and Agriculture DirectorateOrganisation for EconomicCo-operation and Development

or visit our website: www.agri-outlook.org © O

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Middle East and North AfricaThis year’s special chapter focuses on the Middle East and North Africa, where rising food

demand and limited land and water resources lead to increasing import dependence for

basic food commodities. Many countries spend a large share of their export earnings on

food imports. Food security is threatened by conflict and political instability.

The region’s agriculture and fish production is projected to increase about 1.5% p.a., mainly

through productivity improvements. Policies in the region support grain production and

consumption, with the result that 65% of cropland is planted with water-thirsty cereals, in

particular wheat, which accounts for a large share of calorie intake. Overall, diets are projected

to remain high in cereals and sugar, with low protein intake from animal sources.

An alternative approach to food security would reorient policies away from supporting

cereals towards rural development, poverty reduction and support for production of

higher-value horticulture products. Such a change would also contribute to more diversified

and healthier diets.

Figures’ source: OECD/FAO (2018), “OECD-FAO Agricultural Outlook”, OECD Agriculture statistics (database), http://dx.doi.org/10.1787/agr-outl-data-en.

Figure 5. Self-sufficiency ratio for basic foodstuffs for the Middle East and North Africa

For enquiries or further information contact:

Holger Matthey([email protected])

Trade and Markets DivisionFood and Agriculture Organization of the United Nations

Hubertus Gay([email protected])

Trade and Agriculture DirectorateOrganisation for EconomicCo-operation and Development

Cereals

Production/Consumption

Wheat Coarse grains

Rice Oilseeds Vegetable oil

Roots Sugar Meat Beef Poultry Sheep Milk Fish

2015-17 2027

Documents

OECD–FAO Agricultural Outlook 2018–2027 · to demand over the past decade came from rising per capita incomes in the People’s Republic of China (hereafter “China”), which