Growth Prospects for Commodities Production, Consumption and Trade
Commodity markets, agriculture included, were driven in the last years by a combination of factors like challenging macroeconomics, effects of climate changes, shifts in consumers’ demand, political imponderability’s and monetary involvements etc., all impacting and changing the market place and making room now to confidence and optimism.
Grains Keep on Moving
Cereal prices have been rather volatile the last 10 years. The fundamentals that underlie this grain prices volatility are well understood and not particularly controversial. Demand factors such as expected trends in population, income and taste changes towards more animal protein have been just outweighed by increases in supply through rising yields and increase in land use. The malthuasian concern that food production cannot keep up with population growth is never far from the surface. So far though, output per ha has stayed above population-induced consumption growth for the major grains.
Whilst consumers currently enjoy unprecedented access to affordable, high quality food, increasing pressure is being put on global agricultural production as a result of a combination of drivers including climate change, demographics coupled with increasing demand for more meat in diets and rising demand for bio fuels.