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Global food markets

Global food markets. Economics of Food Markets Lecture 2 Alan Matthews. Long term perspectives. Think about in terms of simply supply-demand diagram Factors affecting demand Population growth, income per head, changing tastes Factors affecting supply Resources, technology.

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Global food markets

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  1. Global food markets Economics of Food Markets Lecture 2 Alan Matthews

  2. Long term perspectives • Think about in terms of simply supply-demand diagram • Factors affecting demand • Population growth, income per head, changing tastes • Factors affecting supply • Resources, technology

  3. Source: FAO World Agriculture: Towards 2015/2030

  4. Source: FAO Food Outlook

  5. Long term perspectives • Malthusian predictions not yet confirmed by historical experience • Great volatility around the trend • What does the future hold? • International organisations relatively sanguine • Dissenting voices, e.g. Lester Brown • Global population growth slowing down • The China syndrome? • Vanishing resources? • Technology?

  6. Prospects for food and nutrition • Tremendous progress in improving nutrition levels over last four decades • But almost 800 million people still suffer from undernutrition • The importance of agricultural development to address poverty and undernutrition

  7. FAO World Agriculture Towards 2015/2030

  8. FAO World Agriculture Towards 2015/2030

  9. Changing international trade patterns • Agricultural exports a declining share of global merchandise trade • Overall agricultural trade surplus of developing countries has virtually disappeared • Least developed countries are net food importers since the mid-1980s • Trends driven by both policy and market factors

  10. FAO World Agriculture Towards 2015/2030

  11. Policy impacts on international trade • Tariffs continue to curb trade • Domestic support remains high • More liberalisation would mainly benefit developed countries • Does globalisation disadvantage the poorest countries?

  12. FAO World Agriculture Towards 2015/2030

  13. Taming commodity markets • Commodity markets – declining and volatile prices • Price stabilisation • Buffer stocks • Price raising • Export cartels • Market-based mechanisms • Compensatory financing schemes • Risk management

  14. Key messages – global food markets • Positive achievements • declining food prices, fewer people hungry • Issues • can this continue? • do OECD farm policies hurt the poor? • can we tame commodity markets? • Can globalisation of food markets work in favour of the poor?

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