ISLAMABAD: Over the next decade, global agricultural production is projected to increase by 1.1 per cent per year, with the additional output to be mainly produced in middle- and low-income countries, according to a report released by the Food and Agriculture Organisation (FAO) of the United Nations and the Organi­sation for Economic Co-operation and Development (OECD).

The ‘OECD-FAO Agricultural Outlook 2022-2031’, released on Thursday, says a prolonged increase in energy and agricultural input prices, such as fertilisers, will raise production costs and may constrain productivity and output growth in the coming years.

The outlook assumes wider access to inputs and shows that increased productivity-enhancing investment in technology, infrastructure, and training will be critical drivers of agricultural growth.

The report says the global agri-food sector faces fundamental challenges over the coming decade, particularly the need to feed an ever-increasing population in a sustainable manner, the impacts of the climate crisis, and the economic consequences and disruptions to food supply linked to the war in Ukraine.

Global wheat production expected to increase by 70m tonnes

The outlook focuses on assessing the medium-term prospects for agricultural commodity markets. The findings of the report underscore the crucial role of additional public spending and private investment in production, information technology and infrastructure as well as human capital in raising agricultural productivity.

Prices of agricultural products have been driven upward by a host of factors, including the recovery in demand following the outbreak of the Covid-19 pandemic and the resulting supply and trade disruptions; poor weather in key suppliers; and rising production and transportation costs, which have been further exacerbated recently by uncertainties regarding agricultural exports from Ukraine and Russia, both key suppliers of cereals. Russia’s role in fertiliser markets has also compounded already existing concerns about fertiliser prices and near-term productivity.

The report provides a short-term assessment of how the war may affect both global agricultural markets and food security. It highlights major risks to key commodity markets: if Ukraine completely loses its export capacity, equilibrium wheat prices could be 19pc higher, and 34pc higher if Russian exports are 50pc of normal levels.

The report says wheat consumption is expected to increase by 11pc by 2031 as four countries—India, China, Pakistan, and Egypt—account for 40pc of this increase. Wheat consumption in Pakistan will increase by six million metric tonnes. Globally, the projected increase in wheat for food is more than two times larger than that for feed, especially in Asia, where there is an increasing demand for processed products, such as pastries and noodles.

Global wheat production is expected to increase by 70m tonnes by 2031, of which 35m tonnes will be in Asia, a slower growth rate than in the last decade. Pakistan is expected to increase its production by 5m tonnes.

The report says global rice production is expected to grow by 68m tonnes by 2031 to reach 584m tonnes by 2031. Production growth in Asian countries, which account for the bulk of global rice output, is expected to be robust. During the past decade, the rice trade grew at 1.9 per annum.

This is expected to accelerate to around 2.4pc per year by 2031, with total export volumes increasing by 16m tonnes to reach 64m tonnes. The top five major rice exporters – India, Thailand, Vietnam, Pakistan, and the United States – are expected to increase their export share from 76pc to 81pc.

The report says that the share of fresh dairy products in global consumption is expected to increase over the coming decade due to stronger demand growth in India and Pakistan, which in turn is driven by income and population growth. The consumption of fresh dairy products is expected to be high in India and Pakistan but low in China.

Published in Dawn, July 1st, 2022

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

IMF’s firm stance
Updated 05 Feb, 2023

IMF’s firm stance

Pakistan needs to complete the review to stave off a default as well as to unlock inflows from other multilateral and bilateral lenders.
Grotesque bigotry
05 Feb, 2023

Grotesque bigotry

FREEDOM to profess one’s faith is guaranteed by the Constitution of Pakistan. However, for the country’s Ahmadi...
Kashmir reflections
05 Feb, 2023

Kashmir reflections

ASIDE from Kashmir Day, which the nation is observing today as an official holiday, there are a number of other days...
Crisis conference
Updated 04 Feb, 2023

Crisis conference

PTI's refusal to engage with the govt in such testing times will only be seen as sign of ideological bankruptcy.
Revenge politics
04 Feb, 2023

Revenge politics

A SENSE of déjà-vu prevails as cases pile up against PTI politicians, many of whom, along with their allies and...
Inappropriate remarks
04 Feb, 2023

Inappropriate remarks

OFFICIALS of the state, especially when representing the country at international forums, need to choose their words...