| CCP: GR-RI-ME-OF 01/2
|
| CCP: GR-RI-ME-OF 01/2
|
Point II.b of the Provisional Agenda |
COMMITTEE ON COMMODITY PROBLEMS |
JOINT MEETING OF THE
|
Rome, 4-5 July 2001 |
MEDIUM TERM PROJECTIONS TO 2010 |
1. The medium term projections of the basic food commodities, using FAO's World Food Model (WFM)1, reflect country-specific economic and policy assumptions. In general, production projections for field crops are conditioned by shrinking arable land and decreasing growth in marginal yields2, while the projected growth in livestock supplies is largely determined by the assumptions relating to the projected demand for those commodities. The projected demand for the commodities, in general, is derived from the relatively strong growth in real income assumed during the projection period (1998-2010), compared to the historical period (1991-98), changing consumption patterns which favour those commodities most influenced by increasing incomes and urbanization, and population growth, albeit at a slower rate than during the historical period. Projections of international commodity trade are largely related to the country-specific commitments under the Uruguay Round of Agreements on Agriculture, which are assumed to remain unchanged during the projection period.
2. Within individual crop sectors, the global cereal market during the previous decade was characterized by slow growth in demand and almost no growth in trade. Largely as a result of relatively strong production growth in some developing countries and the sharp drop in consumption in the countries in transition, international trade stagnated. In the medium term projection, cereal trade is expected to revive mostly on account of relatively strong demand in the developing countries and the recovery in demand among the transition countries. By contrast, the global oilseed sectors experienced considerable growth during the 1990s, particularly in trade, encouraged mostly by economic growth in many regions of the world. During the current decade, the expansion is projected to continue, albeit at a slower rate than in the previous decade. Oilseed trade is expected to grow at a relatively fast pace in the developing countries, although developed countries are also projected to show some expansion.
3. As for the livestock commodities, the global meat economy was one of the fastest growing agricultural sectors during the historical period, mainly driven by the dynamic expansion of the poultry and pig industries in both developed and developing countries. This trend is likely to continue through 2010 prompted mainly by income growth and changing consumption habits. The projection results indicate that the bulk of the increase in world milk production will originate in the developing countries. While some countries within this group are projected to become more active in export markets, as a whole, the developing countries will remain substantial net importers of dairy products.
4. The projection results, in general, also suggest that commodity prices are likely to strengthen somewhat during this decade. More specifically, the prices of wheat and coarse grains, in real terms, are projected to rise from the exceptional low levels of the late 1990s, reflecting a continuing strong demand for high quality wheat and feed quality grains in world markets. Real prices of rice, oils and fats and oilmeals are projected to remain very close to their base period averages (1997-99), though substantially above those observed in 20003. With regard to the prices of livestock products, those of pig meat, poultry, sheep meat and dairy prices are projected to remain unchanged in real terms by the end of the projection period when compared to their base period levels, while those of bovine meat are projected to decline slightly.
5. Wheat output is projected to rise by roughly 0.8 percent per annum during the projection period to 659 million tonnes by 2010. While a steady improvement in production efficiency is seen to contribute to further gains in yield, stronger demand and rising prices would also lead to higher area planted to wheat. Nevertheless, the projected annual expansion in world wheat production would still fall short of the growth witnessed in the 1990s.
6. For the developing countries as a group, annual wheat production is projected to rise by half as fast as in the 1990s. Among the main factors contributing to this deceleration is the slower growth in yield improvement, in part due to growing water scarcity. There is also less potential for land expansion, especially in Asia, which is an important wheat-producing region. Additionally in China, the gradual shift away from quantity to quality grains is also expected to limit the growth in planted area and, hence, contribute to the region's slow-down in production. A deceleration in production growth is also projected for the developed countries, mostly on account of an expected modest reduction in area for several countries in Western Europe. Only the transitional economies are expected to have faster production growth than during the previous decade and this primarily because of a substantial potential to increase yields in several countries.
7. Total wheat utilization is seen to rise by around 0.9 percent annually during the projection period, mostly on account of the growth in developing countries and an expected increase in demand in the transitional economies, reversing a downward trend in the latter group of countries in the 1990s. Among the main utilization categories, the direct food consumption of wheat is projected to expand the most, by some one percent per year to 476 million tonnes by 2010. However, with the steady and gradual increase in the variety of diets, the growth in wheat consumption would be considerably below the rates observed in the 1990s. This would imply that total wheat consumption is expected to increase at slightly slower rate than that in world population, thus, leading to a small decline in per caput food use of wheat from nearly 71 kg per person in the base period to 70.4 kg per person in 2010.
8. As in the previous decade, the bulk of the projected rise in food consumption would occur among the developing countries, driven mostly by rising population and income, as well as continued urbanization. Aggregate food consumption of wheat in the developing countries, as a group, is projected to rise by 58 million tonnes over the 1997-99 base period. In the developed countries, per capita food consumption of wheat is projected to follow a declining trend, mostly at the expense of higher consumption of non-wheat food products. The other major use of wheat is for animal feed which is projected to rise annually by 0.4 percent, in contrast to a decline of over one percent in the 1990s. The main reason for this reversal lies in the more favourable economic prospects expected in the projection period compared to the previous decade. The rise in feed use is projected to be most pronounced among the transitional economies and several developing countries in Africa, South America and Near East Asia.
9. Global wheat trade is expected to expand significantly during the projection period after contracting slightly during the 1990s. World trade in wheat and wheat flour (in grain equivalent) is projected to rise by nearly 2 percent per year to reach 127 million tonnes in 2010 compared to an average of 102 million tonnes in the base period. Nearly all of this large expansion would be attributed to higher import demand in the developing countries, mostly in Asia and Africa, with their global import share rising from 77 percent in the base period to 84 percent in 2010.
10. In the export market, the transitional countries are projected to increase their market share from 10 percent to 13 percent. On the contrary, the share of developing countries would decline from 14 percent to about 13 percent. Among the traditional five major wheat exporters, the expansion in exports from the United States is likely to be most significant, up 11 million tonnes from the late 1990s, representing a gain in market share of about 3 percent to 31 percent of the world total. Exports from the other major exporting countries are also projected to increase, but none are expected to expand their market share, while Australia and Canada could even find their global share decline slightly.
11. Global rice production is projected to rise at less than 1 percent per year in the current decade, down from 1.7 percent in the 1990s. As a result, by 2010 world production would reach 440 million tonnes, in milled equivalent, up from 394 million tonnes in the 1997-99 base period. Virtually all the expansion would stem from an intensification of production, with hardly any increase in area anticipated. At the same time, the loss of yield momentum observed in the previous two decades is expected to persist in the medium term.
12. Such a pattern of growth is expected to dominate in Asia where pressure on labour, land and water resources from other growth sectors will limit the scope for an expansion of rice cultivation. In South America, a reduction in government support might stall the expansion in plantings in the next decade. At the same time, the modernization of the sector should sustain a dynamic expansion in yields in the region. Unlike in the other regions, production growth in Africa is expected to rely almost equally on area and yield gains. Little change in production is projected for the developed countries, while the economies in transition might experience dynamic growth, not sufficient though to allow a full recovery to levels of the early 1990s.
13. Global demand for rice in the next decade is expected to expand at slightly less than one percent per year, down from 1.7 percent in the 1990s. By 2010, total rice utilization in the developing countries is projected to reach 420 million tonnes, 45 million tonnes more than the 1997-99 average, while the overall increase would amount to about 2 million tonnes for the combined total of the developed countries and the economies in transition. For the developing country group, the rise in population should be the determining factor underpinning rice demand in the next decade. By contrast, growth in demand should sustain the increase in consumption in the countries in transition.
14. Although the utilization of rice for feed increased in recent years, rice remains essentially a grain for human consumption and a staple food for about half of the world population. Worldwide, per caput rice food consumption is projected to fall slightly between the base period and 2010, reflecting mainly changes in the dietary patterns in Southeast Asia. By contrast, per caput consumption is likely to rise in Africa, Latin American and Caribbean (LAC) countries, South Asia and the Near East, but at a slower rate than in the 1990s. In the developed countries, rice intake per person is projected to stagnate, while it might recover in the economies in transition.
15. World rice trade is projected to expand by about 1.5 percent per year to 29.3 million tonnes in 2010 compared to the average of 24.9 million tonnes in the base period. Asian countries are expected to remain the main destination, absorbing half of the projected volume. In particular, Indonesia is expected to raise its imports to 4.4 million tonnes, thereby remaining the world top rice buyer. Increased purchases are also projected for China (mainland), Malaysia, Nepal and the Republic of Korea, while those by the Philippines may decline. Imports to the Near East are expected to soar, with all of the expected 2 million tonnes increase in domestic consumption sourced on the international market. Imports into Africa are projected to rise by 1.7 million tonnes, half of which is to be accounted for by Nigeria. Little overall increase in LAC imports is envisaged with production gains foreseen to outpace the rise in demand. Together, the developed countries and economies in transition are anticipated to import about 4.5 million tonnes in 2010, only 800 000 tonnes more than in the base period.
16. By 2010, Asian countries are projected to supply 75 percent of the international rice market, with Thailand and Vietnam alone accounting for half of world exports. Bangladesh, Cambodia, Myanmar and Pakistan are also anticipated to expand sales, while China and India would experience reductions due to intensified competition in world markets. In the other regions, Argentina, Egypt and Uruguay are anticipated to increase their exports substantially. Developed countries' share of the rice market is projected to shrink from 17 percent in the base period to 13 percent in 2010, as their rice deliveries fall somewhat by the end of the decade.
17. The growth in global coarse grains production is expected to be maintained at one percent per year during the projection period, similar to the growth rate experienced in the 1990s. Also similar to the previous decade, the annual growth in yield improvements (0.7 percent) is expected to be faster than area expansion (0.3 percent). In the case of global coarse grain area, the projected growth rate shows a recovery from the negative growth recorded in the previous decade. In aggregate, the developed countries'projected coarse grain area is maintained at the level of the base period, reversing a decline during the previous decade when policies in some of the major coarse grain exporters restricted area. Land used for coarse grain production also shrunk during the previous decade in the countries in transition, but is expected to recover slightly by 2010. In the case of the developing countries, production prospects continue to be subject to the pressure of shrinking supplies of arable land and the growing scarcity of water. In addition, the expectations for yield improvements among the developing countries are also seen to be declining. While the growth in land used for coarse grains in the developing countries is likely to be maintained at the annual rate of 0.5 percent, the prospect for annual yield growth among this group of countries declines from 1.7 percent in the 1990s to half that over the projection period.
18. The baseline projections show a stronger growth in global demand for coarse grains than during the 1990s, in particular for feed use. Overall, the projected growth in global feed use is expected to be restrained by the assumptions underlying the developments in the livestock sector which imply more efficient conversion of feed to meat and milk and expanding intensification of livestock production, both of which would lead to less feed grain use per animal unit. Coarse grain feed use slowed during the previous decade in the transition economies following economic reforms in the late 1980s and early 1990s. The projected recovery in feed demand in those countries, in particular for maize and barley, and continued strong growth among the developing countries, although at a slower rate than during the nineties, are expected to account for most of the global increase this decade. The growth in feed demand should continue to remain moderately strong in the developed countries, only slightly below that of the previous decade.
19. The world average per caput food consumption of coarse grains is projected to continue to decline from 33.2 kilograms in the base period to 31.8 kilograms by 2010. Among those regions where per caput food use is lower, primarily in Africa and LAC, the projections show a reversal from positive growth in the 1990s to slight reductions this decade. Rising incomes and growing urbanization are expected to shift demand away from traditional coarse grains, such as maize, sorghum and millets, and toward higher protein and more convenient (easier to prepare) foods. The demand for other uses of coarse grains, especially for industrial uses and as alternatives to existing products, is also expected to remain relatively strong. Coarse grains are used in several food processes to make starch, beer and as an alternative to raw sugar, and are also employed in the production of adhesives and alcohol for petroleium additives.
20. Global trade in coarse grains is projected to reach about 117 million tonnes compared to the average of 95 million tonnes in the 1997-99 base period. The bulk of the increase is accounted for by maize, up 17 million tonnes from the base period, to 85 million tonnes in 2010. The developing countries as a group are expected to increase their imports of coarse grains by almost 18 million tonnes, mostly in Asia to meet an expected strong demand for grain feed. A major trade balance reversal is expected in China, where maize exports are projected to shrink, but not disappear, making China a net coarse grain importer of some 5 million tonnes by 2010. Total imports among the transition countries would remain unchanged from the base period level of 3 million tonnes.
21. Among the major coarse grain exporting regions, exports from North America should expand by 18 million tonnes, reversing a slight downward trend during the previous decade. Exports from Western Europe are projected to continue to decline, but much less than during the 1990s. EC coarse grain exports are expected to be limited by growing competition from other exporters. Coarse grain exports from the transition countries are projected to continue to expand reaching 9.5 million tonnes by 2010, improving the net export position of this group, especially among the eastern European countries. South American exports are projected to grow by some 28 percent during the current decade, resulting in a growing share of world trade.
Oils and fats5
22. World production of oils and fats is expected to grow more than a quarter by 2010 when compared to the base period, with nearly two-thirds of that growth being concentrated in the developing countries. However, there has been a slow down in the growth of production in both the developed and the developing countries, with the slow down being more pronounced in the former. These differences reflect changing global demand patterns resulting from the underlying assumptions about income and population growth as well as the ability of the production systems to respond to such changes. The strongest growth prospects are in Indonesia and Brazil where area devoted to oilcrops continues to expand. Among individual oils, palm and palm kernel, oils are forecast to continue to grow the fastest, with soybean oil coming a distant second. This is attributed to their advantage over the other oils in terms of productivity and lower costs of production.
23. Global consumption of oils and fats is projected to increase at an average annual rate of about 2 percent over the projection period reaching 132 million tonnes by 2010. Developing countries are expected to experience stronger growth in consumption, compared to developed countries, prompted by increasing incomes. Amongst them, Asian countries are anticipated to experience the largest gain in absolute terms. African and Latin American countries are distant second and third, respectively, but in terms of annual growth, Africa leads with 2.8 percent. By contrast, per caput consumption in many of the developed countries is already relatively high and, thus, the scope for expansion is limited. In addition, consumers in these countries are expected to limit consumption of some oils and fats for health reasons.
24. In general, most of the anticipated surge in the import demand of oils and fats would emanate from developing countries whose purchases are expected to account for 64 percent of the global total by 2010, up from 60 percent in the base period. This would be facilitated by several factors including market liberalisation, increasing population numbers and rising per caput incomes. China (mainland) and India, the largest single country importers, are both expected to increase their imports during the projection period since domestic demand is projected to expand at a faster rate than production. Among the developed countries, the EC is expected to remain the single largest destination for oils with an import volume that would account for 20 percent of the global trade by 2010, almost unchanged from the base period. Shipments into Japan are forecast to grow slowly as consumption continues to expand at a very low rate. The share of imports in domestic consumption, which indicates the degree to which countries rely on imports, is projected to increase across Western Europe and Africa as well as in major importing countries in Asia.
25. Regarding exports, Malaysia is projected to maintain its position as the world's leading exporter of oils and fats, primarily palm and palm kernel oils, while the United States, the second largest exporter, would also continue to play a very important role in international trade of oilseeds and products. The respective trade shares of Malaysia and the United States are projected to stay relatively unchanged at 20 percent and 18 percent. Instead, Indonesia and Brazil are anticipated to capture more of the expanding global market during the projection period, together reaching 22 percent of the market. The other notable exporters, Argentina and Canada, are projected to maintain their market shares at about 11 percent and 6 percent, respectively.
Meals7
26. By the year 2010, global output of oilmeals is projected to grow by over 25 percent when compared to the base period, in line with the expected growth in meat production. However, the expected annual average growth over the projection period would be half the rate observed during the 1990s. Nearly two-thirds of the increase in the global production of oilmeals is expected to take place in developing countries. Much of the gain would be accounted for by Brazil and, to a lesser extent, Argentina, though the United States would remain the world's leading producer of oilmeals, with its share of global production shrinking slightly. With regard to individual oilmeals, meal output from palm kernel would grow at the fastest rate followed by fishmeal, although, in terms of market dominance, soybean meal is expected to maintain its two-thirds share of world production.
27. More than two-thirds of the growth in world consumption of meals expected over the projection period would be concentrated in developing countries, reflecting changing consumption preferences that usually accompany income growth and greater concentration of production of livestock in those countries. This would also imply that about 50 percent of global use of oilmeals would be in developing countries by 2010, up from 44 percent in the base period. Despite this, the expected annual average growth rate would be only half of that observed in the 1990s. Although, this is as would be expected given the decline in annual average growth rate of overall meat production over the same period, the slow down in the use of oilmeals is larger due to expected changes in livestock production patterns and improvements in livestock productivity.
28. International trade in oilmeals is projected to expand during the projection period, reaching 46 million tonnes, but at a much reduced growth rate compared to the historical period. Oilmeal imports are projected to continue to expand due to favourable demand prospects in developing countries; accordingly, their share of the world total imports is expected to jump by 8 percent from the base period to reach 48 percent by 2010. This is mostly due to the anticipated growth in China (mainland), once a net exporter of oilmeals, where increasing incomes and population are fuelling the demand for livestock and related products. Indonesia, the Republic of Korea and Thailand are also expected to experience higher import demand, largely derived from rising per caput income. By comparison, oilmeal imports in the developed countries are projected to grow very slowly. Purchases by the EC, the world's largest import market, are anticipated to expand by only 0.5 percent per year over the projection period compared to 2 percent in the 1990s. This is attributed to the expectation that, as livestock numbers continue decreasing, demand for meal would grow at a slightly slower pace than domestic meal production, thereby limiting the need for imports.
29. By 2010, 58 percent of the export shipments are expected to be from developing countries, slightly higher than in the base period. Brazil would account for the bulk of the expansion, while shipments from China are forecast to stagnate due to domestic demand growing more rapidly than production. The United States, the world's leading supplier, is projected to maintain its market share of about one-third of the total, while Canada could see its share decline slightly.
30. Global meat production is projected to rise to 276 million tons by 2010, or by 2 percent annually compared to the 2.8 percent annual gains witnessed during the 1990s. As over the past decade, nearly two-thirds of the projected increase of 58 million tonnes in meat output would be from higher poultry and pig meat production, up 22 and 23 million tonnes, respectively. While the growth of bovine meat production, projected at 1.4 percent per annum, will be less than for pig meat and poultry, it would still be double the annual growth witnessed over the previous decade which was heavily influenced by declining output in transitional economies. Sheep meat output is expected to reach 13.7 million tons, an estimated increase of 2.4 million tons during the projected period but growing more slowly than during the 1990s.
31. Structural changes in the poultry industry, including more efficient conversion of feed into meat and increased industry integration, that maintain prices relatively lower than other meats, are the main factors on the production side that influence developments in the sector in developing countries. Nearly half of the projected growth in global poultry output is expected to be in developing regions, particularly in Asia and Latin America and the Caribbean (LAC). Developing countries, mainly in Asian and LAC regions, are also expected to account for nearly 80 percent of the increase in global pig meat output. Enhanced productivity, such as increased pigs per litter and heavier carcass weights, is expected to allow for an annual projected output growth of 2.6 percent in developing countries.
32. The fragmented nature of the industry in the beef sector, as well as the longer biological growth cycles, are expected to be the primary factors limiting output expansion to 10.7 million tons over the projection period. While global beef production is projected to reach 69.2 million tons by 2010, its share of global meat production would slide from 27 percent in the base period to 25 percent by 2010. Herd rebuilding and limited demand in developed countries are expected to restrict output growth there to less than half of a percent during the projection period. This contrasts with expected annual growth in the developing countries of more than 2 percent, made possible by higher slaughter weights. The historical downward trend in sheep meat production in developed regions is expected to persist over the projection period with the developing countries accounting for nearly all of the 2.4 million tonnes increase in global output.
33. Although the projected expansion in global meat consumption is expected to slow from the nearly 3 percent annual growth rate during the 1990's, it is still projected to increase by 2 percent annually to reach 276 million tonnes by 2010. Over three-quarters of the increase of 58 million tonnes expected to originate in developing countries. Global per caput meat consumption is expected to reach 41 kilograms by 2010 compared to 37 kilograms in the base period. Changing dietary preferences, growing incomes and urbanisation are expected to support a 4-kilogram increase in per caput meat consumption in developing countries to reach 29.7 kilograms, up 16 percent from 25.7 kilograms in 1998 and 53 percent above the 1991 level of 19.4 kilograms.
34. With regard to individual meats, the poultry sector will be the major beneficiary of changing consumption patterns, expanding its global share to 30 percent by 2010, compared to 28 percent in 1998. While the projected world consumption growth for poultry products is expected to be halved from the 5 percent rate witnessed during the 1990's, demand for poultry meat in Asia is expected to remain strong and exceed 3 percent over the projection period. Much of the gains for poultry will be at the expense of beef and sheep meat, where per caput consumption is expected to rise only moderately. Consumption of pork, while maintaining global share at 40 percent, is set to expand 2 percent annually, with per caput consumption moving up from 14.7 to 16.3 kilograms by 2010. The regional composition of pork consumption is expected to favour Asia, where pork's reputation as a preferred meat would push up the region's share of total pork consumption from 52 percent of all meat in 1998 to an estimated 56 percent by 2010.
35. The growth in global meat trade, stimulated in the 1990's by increased market access provisions, is projected to slow from a 9 percent annual rate in the 1990s to an average 2.5 percent over the projection period. Meat trade is expected to exceed 20 million tons by 2010, an increase of 5.2 million tonnes from the base period, with poultry meat accounting for nearly one half of the additional imports. Despite the concentration of meat production gains in developing countries, nearly two-thirds of the increase in imports is expected to originate from these countries, particularly from the Asian countries rebounding from the financial crises that constrained imports during the 1997-1999 period. Increased imports are expected into Malaysia and the Philippines, while the 2001 liberalization of the beef market in the Republic of Korea is expected to lead to increased import demand. Continued strong domestic demand for poultry meat in China is expected to fuel an annual import growth of 6 percent, while a slightly lower import growth of 5 percent is projected for Mexico with all meats benefiting from strong meat demand.
36. More than 60 percent of the projected increase in global meat trade is expected to be supplied by developed countries. In particular, poultry meat shipments, mainly from the United States, are projected to be up by 2.4 million tonnes, some 40 percent over the base period. However, developing country meat exports are also anticipated to grow relatively fast at 3.5 percent annually, from 3.9 to 5.8 million tonnes, led by beef exports from South America, including Argentina, Brazil and Uruguay. At the same time, shipments of poultry meat from Brazil are projected to rise nearly half a million tonnes by 2010, stimulated by Brazil's continued industry investment and expansion.
37. World production of milk is forecast to rise to 654 million tonnes by 2010, representing an average annual increase of slightly over one percent with the largest increment expected in the developing countries. In this group, output of milk is projected to rise by 75 million tonnes to reach 289 million tons. As a consequence, the share of developing countries in world milk production is expected to increase to 44 percent (against 39 percent in the base period). At the global level, the growth in milk production is anticipated to stem from both an increase in the number of milking animals and higher yields, with most coming from higher yield per animal as a result of improved nutrition and breeding. Continuing a trend established in the 1990's, production gains are closely associated with rising consumption except in a limited number of low-cost producing countries that are able to export dairy products competitively.
38. In Asia, strong demand is likely to stimulate milk production with the greatest output expansion projected in India, growing by 27 million tonnes. Other countries in the region could also register substantial increases in milk output, in particular Pakistan and China. In the Latin America and Caribbean region, output is expected to rise by 22 million tonnes, a 38 percent increase over the base period, most notably in Brazil. However, for some low-cost producing countries in the southern cone, the increase is likely to be export-led. In Africa, milk production is projected to grow at a slower rate than in other developing regions, reflecting difficult economic conditions and, in some countries, climates not well suited to dairy production.
39. In the developed countries, milk production is expected to rise by 22 million tonnes to reach 266 million tonnes in 2010. In Oceania, output is projected to increase by 11 million tons, or 54 percent, during the projection period in response to export demand. In the United States, output will probably increase in line with domestic demand to reach 81 million tons by 2010. Elsewhere, Canada and Western Europe are assumed to continue to impose production restrictions and, consequently, output of milk would change little during the current decade. In Japan milk output is not expected to increase, potentially opening the way to some increase in imports of dairy products. In the countries in transition, milk production is projected to be 2 million tons higher by 2010. All of the increase is foreseen for the countries of Eastern Europe and the Baltics, as total milk output in the CIS is anticipated to decline during the projection period due to low profitability.
40. The strongest growth in demand for milk and milk products is anticipated to come from the developing countries, where it is projected to grow at 2.6 percent per year. Consumption of milk and milk products is expected to grow most strongly in Asia, which would account for almost 55 percent of the increase in world demand. An additional 23 million tons, or 22 percent of the projected rise in the world total, is also expected in the Latin America and Caribbean region. Within this region, Brazil and Mexico would see the largest increases. Africa is expected to register the smallest increase in demand and, in many countries in the region, this will represent a growth rate slower than that for the population.
41. In the developed countries, consumption of milk and milk products is also expected to show only limited growth (0.5 percent per year). Indications are that the current levels of consumption of milk and milk products are near saturation. Consequently, any growth in per caput consumption is expected to be marginal, mainly associated with changes in the type and form of dairy products consumed. As a result, while continuing to represent an important share of world consumption in 2010, this group of countries is anticipated to account for only 15 percent of the growth in world demand for milk. For the transitional countries, only a small increase in total demand is anticipated.
42. At the global level, imports of dairy products could reach 50 million tons in 2010, an increase of 13 million tons over the base period. This would imply that the share of total milk traded would rise only slightly to 8 percent of world production. Approximately 80 percent of the increase in import demand is projected to come from the developing countries. While exports of dairy products from the developing countries are also expected to increase, the projections suggest that this group of countries as a whole will face a growing trade deficit in dairy products. While highest growth in import demand is projected for the countries in South East Asia, other countries, including Algeria, Brazil and Mexico, are also expected to remain important markets. As at present, very few developing countries will be net exporters of dairy products by 2010, including Argentina, Chile, Uruguay, India and Zimbabwe.
43. While the imports of the developed countries are projected to change little over the projected period, they are expected to continue to account for the bulk of exports of dairy products by 2010 (70 percent of trade); however, a shift in the relative importance of different regions is foreseen. The proportion of world exports supplied by New Zealand and Australia are projected to increase substantially, while those originating in Europe would decrease and the trade share of North America would change little. For the countries in transition, limited growth in milk output and some increase in domestic demand are expected to inhibit export growth, while improvements in domestic processing capacity could act as a damper on import demand.
ANNEX TABLES (available in Excel format)
____________________________
1 The WFM incorporates projected Gross Domestic Product as a proxy for real income growth, obtained from the World Bank, and population growth projections, from the United Nations, into the demand equations for individual commodities along with direct and cross-price effects. The commodity production projections are determined largely by assumed changes in the trends in area and yield growth rates, combined with direct and cross-price effects.
2 The baseline projections assume that potential developments in biotechnology during the projection period are not likely to have a significant impact on average yields.
3 Between the base period (1997-99) and 2000, the FAO rice price index declined from 123 to 98, the FAO oils/fats price index from 140 to 89, and the FAO meals price index from 106 to 90.
4 Includes maize, barley, sorghum, millet, oats, rye and other minor grains.
5 The term `oils and fats' comprises oils and fats from both vegetable as well as animal origin.
6 Trade figures refer to trade in oils and fats and the oil contained in traded oilseeds.
7 The term `meals' comprises all meals and cakes derived from oilcrops as well as fishmeal. All meal figures are expressed in protein equivalent.
8 Trade figures refer to trade in oilcakes and meals and the meal contained in traded oilseeds.
