The Strategist

International organizations forecast stabilization of world food prices

07/06/2021 - 03:44

World food prices will adjust in the coming years after rising in 2020 and then fall slightly, the OECD and UN experts predicted.

World prices for most agricultural products, including food, will gradually stabilize in the next decade. This is according to a report jointly prepared by the Organisation for Economic Co-operation and Development (OECD) and the UN Food and Agriculture Organisation (FAO).

The report said strong demand from China and constraints on global production growth contributed to higher prices for most agricultural products in the second half of 2020. However, the authors expect prices to adjust in the coming years and then fall slightly on the back of rising production and slowing demand growth.

Global demand for agricultural products is expected to grow by 1.2% a year over the next decade, up from 2.2% a year in the past 10 years, the report said. Global production will grow at an annual rate of 1.4% over the next decade, with developing economies and low-income countries as the growth drivers, the authors forecast.