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The Organisation for Economic Co-operation and Development and the UN Food and Agriculture Organization released the 10-year Agricultural Outlook Report on July 4, stating that the structural changes in the agricultural product market triggered by the manufacture of biofuels will increase the prices of agricultural products in the next ten years. As the demand for biofuels continues to expand, agricultural product prices will generally rise. The report predicts that by 2016, biofuel production in the United States, the European Union, and Brazil will all double. At the same time, the world trade volume of beef, pork, powdered milk and vegetable oil will increase substantially in the next 10 years.
The report pointed out that the recent rise in the prices of agricultural products is related to a number of temporary factors, such as the dry weather in wheat-producing areas and the fact that world grain inventories are at a multi-year low. However, from a more long-term perspective, the continuous expansion of biofuel demand and production has led to structural changes in the agricultural product market. In the next decade, many agricultural products will maintain relatively high prices.
As a result of the reduction in the oversupply of agricultural products and the reduction of export subsidies, the market has undergone long-term changes. More importantly, the increasing use of food, sugar, oilseeds and vegetable oils for the production of alternative fuels (ethanol and biodiesel) supports crop prices and leads to livestock products through indirect effects of rising animal feed costs. The price rises.
The report predicts that by 2016, biofuel production in the United States, the European Union, and Brazil will all double. The report pointed out that the raw materials used in biofuels include crops such as corn, sugar beet, and rapeseed. The increase in the production of biofuels will reduce the supply of such agricultural products and directly cause price increases. In addition, due to the reduction in supply, the cost of feed for animal husbandry will also increase, resulting in an increase in the price of meat products. The countries most affected by the increase in prices of agricultural products are net importers of food and poor countries. The report pointed out that the rise in the prices of agricultural products has caused certain food-importing countries to worry. In addition, the urban poor will also be affected by rising prices. In addition, an increase in the production of biofuels has led to an increase in feed prices, which, although beneficial to feed manufacturers, has also led to increased costs and reduced income for those livestock farmers.
The OECD has joined hands with the UN Food and Agriculture Organization of the United Nations since 2005 to publish a forecast report on the world agricultural development in the next 10 years. This year's report first assesses the impact of biofuels on agricultural development. A spokesman for the International Grain and Oil Organization said: "The rising prices of grain, oil, vegetables and sugar require the world organization to make a long-term plan for the continued growth of raw material prices, otherwise it will surely become a mess." At the same time, the organization believes that from today to 2016, the United States and the major producing wheat countries in the European Union, and sugar producers in Brazil need to coordinate the planning of their respective production in order to ensure a balanced production and sales.
The continuation of this situation will result in a debate about the “light and heavy emphasis on food and fuelâ€. Obviously, during the coming decade, for developed industrial countries, inflation is the number one problem for the steady development of the national economy; and the number one problem in developing countries is the increase in food prices caused by inflation. As a result, it was unable to provide the people with enough food to fill their stomachs.
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The recent increase in the price of agricultural products is related to a number of temporary factors, such as the dry weather in wheat-producing areas, and the fact that world grain reserves are at a multi-year low. However, from a more long-term perspective, the continuous expansion of demand and production of biofuels has led to structural changes in the agricultural product market. In the next decade, many agricultural products will maintain relatively high prices.