Global food trends into the 21st century

by Teresa Acklin
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Changing diets in developing countries expected to cause lasting shifts in global food markets.

   Although food production going into the 21st century is likely to keep pace with growing populations and incomes, changing diets in developing countries are expected to cause lasting shifts in global food markets, according to a report from the International Food Policy Research Institute in Washington, D.C.

   The report, “Global Trends in Cereal and Livestock Demand and Supply to 2010,” written by Mark Rosegrant and Claudia Ringler of the I.F.P.R.I., and presented at the 1998 Défi Blé conference in Paris, was based on projections of global food supply and demand models, developed by the I.F.P.R.I., the Food and Agriculture Organization of the United Nations and the World Bank.

   Global food policy has been driven by the need to feed an increasing population, and to support diversified consumption patterns as incomes rise, Mr. Rosegrant said. Agricultural production has been able to meet these goals, he said.

   According to the I.F.P.R.I. report, in 1961 the world produced 867 million tonnes of cereals for 3.1 billion people; by 1995, global cereal production was 1.9 billion tonnes for 5.7 billion people — 2.2 times the grain for 1.8 times the population. At the same time, prices of major cereals declined. Between 1982 and 1995, real world wheat prices declined by 28%, rice prices by 42%, and corn prices by 43%.

   But several recent events might significantly influence the world food situation in the coming decades, Mr. Rosegrant said. Price hikes in cereals, combined with drastic declines in world cereal stocks, raised serious concerns over the future of world food markets during 1995-96, he said. “The recent severe El Nino suggests that adverse weather patterns might increase in both frequency and severity, with negative impacts on the food production of many low-income regions,” he said. “The economic and financial crisis in several Southeast Asian countries and South Korea in 1997-98 also had negative impacts on global food markets, resulting in a contraction of global agricultural trade.”

   Changes in diets in developing countries will produce significant, lasting shifts in global food markets, Mr. Rosegrant said. “Rapid income growth, combined with increasing urbanization and changes in tastes and preferences will cause a shift in diets from coarse grains to rice and secondary shifts from rice to wheat at the margin, as well as increased consumption of livestock products, vegetables and fruits, particularly in Asia,” he said.

   Other long-term shifts will include the progress in international trade liberalization and opening of markets that will increase the importance of developing countries in global food markets, Mr. Rosegrant said. Among the developing economies, the role of Asia — especially of China, because of its sheer size and rapid economic growth — in world cereal and livestock markets will be preeminent, he said.

   Falling rates of public investment in agricultural research also could significantly depress long-term yield growth in developing countries, he said.

      GLOBAL DEMAND STRUCTURE CHANGING.

   Economic growth, rising incomes and rapid urbanization in the developing economies are changing the global structure of food demand, Mr. Rosegrant said.

   Population growth rates are expected to decline through 2010, particularly in developing countries, according to the I.F.P.R.I. report. Rising incomes and rapid urbanization, particularly in Asia, will change the composition of demand, Mr. Rosegrant said.

   Consumption of maize and coarse grains as food is expected to decline as consumers shift to wheat and rice, Mr. Rosegrant said. “As incomes rise further and lifestyles change with urbanization, there will be a secondary shift on the margin from rice to wheat,” he said.

   Growing incomes in developing countries also will drive strong growth in meat consumption, which will in turn induce strong growth in feed consumption of cereals, particularly maize, Mr. Rosegrant said. “These trends will lead to an extraordinary increase in the importance of developing countries in global food markets,” he said. “A full 84% of the increase in global cereal and meat demand between 1993 and 2010 will come from the developing countries. By 2010, developing countries will account for 63% of global cereal demand and 58% of global meat demand.” According to the I.F.P.R.I. report, global cereal demand is expected to increase by 477 million tonnes (27%) over the 1993 level of 1,773 million tonnes. Developing countries will account for 84% of the global increase in cereal demand; China alone will account for 23%, the report said, and India for another 13%.

   Cereal demand is expected to increase by 66% in Sub-Saharan Africa, by 49% in West Asia/North Africa, by 37% in Latin America and by 35% in Southeast Asia, the report said. The largest increase in demand will be for maize (35%), driven by the rapid growth in demand for feed, followed by wheat (30%).

   Eighty-eight percent of the increase in wheat demand will come from the developing world, the I.F.P.R.I. report said, where population and incomes are growing at a higher rate than in developed economies.

   Demand for rice will grow more slowly than wheat and maize, the report said, because of changing consumption patterns and the limited role of rice in animal feed. Overall rice demand is expected to increase by 93 million tonnes, with the most significant increase in India (27 million tonnes), Southeast Asia (20 million tonnes), and China (18 million tonnes).

      CEREAL COMSUMPTION RISING.

   Per capita food consumption of all cereals to 2010 is expected to be virtually constant, Mr. Rosegrant said, with slightly declining consumption of cereals in higher-income countries balancing the slightly increasing demands of lower-income countries.

   Global food consumption of cereals is expected to increase 27% to 1,161 million tonnes in 2010, up from 918 million tonnes in 1993, according to the I.F.P.R.I. report. Food demand for wheat will account for 44% of the total increase, followed by rice with 35%.

   Most of the growth in cereal consumption will come in developing countries, the report said. Per capita consumption of wheat and rice in developed countries is projected to stagnate through 2010. Countries in the former Soviet Union and Eastern Europe will be the biggest per capita wheat consumers among the developed countries.

   In developing countries, Egypt and other countries in West Asia and North Africa will have the highest per capita wheat consumption levels, the report said. Growth in per capita food consumption of wheat in India and the rest of South Asia will be driven by solid income growth, the report said, while per capita food consumption of wheat will remain flat in Latin America and West Asia/North Africa.

   Annual per capita wheat demand in developing countries is projected to increase to 66 kilograms in 2010, up from 62 kg in 1993. In China, per capita wheat demand is expected to increase to 90 kg in the same period, from 83 kg in 1993.

   Per capita food demand for rice will increase in developed nations but will decrease in most developing nations, the I.F.P.R.I. report said. Population growth in developed countries is expected to increase total food demand for rice by 84 million tonnes (26%) over the 1993 level of 322 million tonnes.

   Rice consumption in developing nations will slightly decline, to 70 kg in 2010 from 72 kg in 1993, the report said, as rapid income growth in Asia “drives a diversification of diets in developing countries.”

   However, some developing countries will experience a dietary shift from maize and other coarse grains to increased consumption of rice, the report said. Per capita food demand for rice in India is expected to increase to 82 kg in 2010, up from 78 kg in 1993. Slight increases in per capita rice consumption also are projected for the regions of Latin America, Sub-Saharan Africa and West Asia/North Africa.

   Global food consumption of maize and other coarse grains has been stagnant through 1993, the report said, but by 2010 will increase by 25 million tonnes and by 26 million tonnes, respectively; most of the increase in consumption will occur in Sub-Saharan Africa, where these grains are the primary cereal staple, the report said.

   Asia will experience substantial declines in per capita demand of maize as food, the report said, while demand will increase slightly in Latin America, where the major maize consumer (Mexico) is located.

   Another crucial emerging trend is the rapid growth in demand for cereals — in particular maize — as animal feed in developing countries, Mr. Rosegrant said. Global demand for cereals as animal feed is expected to increase by 185 million tonnes (29%), the I.F.P.R.I. report said.

   More than 70% of the increase will be in developing countries, Mr. Rosegrant said, where the livestock and poultry industries have expanded rapidly. Cereal feed demand will more than double in India and China, the report said, and China will overtake the United States as the largest user of cereal feeds by 2010.

   Demand for maize for feed is projected to grow by 7.6% per year in India through 2010 and by about 4% per year in China and Sub-Saharan Africa, the report said. Demand for wheat and other coarse grains as feed is expected to grow by 3.1% and 2.7% per year, respectively, during 1993-2010.

   In developed countries, growth in cereal feed demand will be much lower, at 0.7% per year in 1993-2010, but slightly higher than the growth rate prevailing since 1982, the report said.

      ASIA TO DRIVE IMPORTS.

   Developing countries will not be able to meet their rapidly growing food demand through growth in their own production, the I.F.P.R.I. report said. “Food import demand from developing countries will grow rapidly, particularly for cereals, with an almost doubling of the import demand for cereals from this region.” East and South Asia will drive the boom in cereal import demands, although other regions will be important growth centers for imports of some of these commodities.

   “China will become an increasingly important player in global food markets,” Mr. Rosegrant said, accounting for 23% of the growth in global cereal demand and 41% of the growth in global meat demand through 2010.

   “However, alternative scenarios show that the country does not represent a major threat to the long-term stability in the global food market,” Mr. Rosegrant said.

   Partially offsetting the increase in demand from developing countries, Eastern Europe and the former Soviet Union will shift from significant cereal importers to substantial export positions. Mr. Rosegrant said. “With a projected 38% increase in cereal exports, the United States is expected to capture a large share of the increased export market for cereals,” he said. “Western Europe has the potential to significantly increase wheat and other cereal exports, but such an increase would require substantial gains in crop productivity and efficiency.”

   Despite a slowdown in cereal production growth, yield and planting area in the years from 1967 to 1993, the long-term prospects for food supply, demand and trade indicate a strengthening of world cereal markets, Mr. Rosegrant said.

   The slowdown was primarily policy-induced, he said, as North American and European governments drew down cereal stocks and scaled back farm-price support programs in favor of direct payments to farmers. “The economic collapse and subsequent struggles with economic reform in the former centrally planned economies in Eastern Europe and the former Soviet Union further depressed crop production for the group of developed countries,” Mr. Rosegrant said.

   Little attention has been paid to the crucial role of cereal prices in the drop in yield and production growth rates, Mr. Rosegrant said. Declines in cereal prices in the past decades have caused a direct shift of land out of cereals and into more profitable cropping alternatives, he said, and has slowed the growth in input use and yields.

   “Probably more important in the long run, declining world prices have also caused a slowdown in investment in crop research and irrigation infrastructure, with longer term consequences on yield growth,” Mr. Rosegrant said.

   But the I.F.P.R.I. projects that real world prices of cereals will be virtually constant through 2010, “indicating a much stronger market for these commodities than in the past few decades, when real prices have declined rapidly,” Mr. Rosegrant said. The stronger price picture is the result of the continued gradual slowing in the rate of growth in both production and demand, he said.

      PRODUCTION TRENDS GROWING.

   ccording to the I.F.P.R.I. report, world cereal production is projected to grow at an average rate of 1.4% annually from 1993 to 2010, virtually the same annual growth achieved during 1982-93. Annual growth in wheat and rice production through 2010 is projected at 1.4%, while the annual growth rate for maize and other coarse grains is projected at 1.7% and 1.2%, respectively.

   Annual crop production rates will be higher in developing countries (1.8%) than in developed countries (1%), the report said. Because of past low production levels, Sub-Saharan Africa will experience the highest production growth rate for each of the cereals, the report said.

   Among developed countries, Australia is expected to experience the highest cereal production levels (2%) in the next decade, followed by the United States, while Japan and Western Europe will face the lowest production growth, at -0.7% and 0.5% per year, respectively.

   Production trends can better be understood by looking at area and yield, Mr. Rosegrant said. The I.F.P.R.I. report projects that only 43 million hectares will be added to the global cereal crop area of 700 million ha between 1993 and 2010. The largest increases will be in maize (13 million ha) and other coarse grains (15 million ha); rice area will be virtually stagnant, increasing only 5 million ha by 2010, the report said.

   Most of the crop area expansion, an estimated 35 million ha, will occur in developing countries, the report said. Sub-Saharan Africa is expected to plant an additional 19 million ha, mainly to other coarse grains and maize. Crop area will increase by 6 million ha in developing Asia and Latin America, and by 3 million ha in West Asia/North Africa, the report said.

   In developed countries, the area planted to cereal crops is expected to stabilize and area growth rate for wheat and maize is estimated at 0.2% and 0.4%, respectively. Crop area growth in developed countries fell significantly after 1982, the report said, because of declining cereal prices, policies to remove land from production and the economic collapse in much of Eastern Europe and the former Soviet Union.

   The projected growth in the expansion of crop area places the burden to meet future cereal demands on crop yield growth, the report said. “Although yield growth will vary considerably by commodity and country, in general, rates of growth in crop yields are projected to continue to decline compared to the already reduced rates of the 1982-93 period,” the report said.

   Wheat yields are projected to increase by only 0.89% per year in 1993-2010, compared with an annual growth of 1.74% during 1982-93. Maize yield growth will slow to 0.87% per year in 1993-2010 from 1.35% per year in 1982-93, and yields for other coarse grains will decline to 0.67 % from 1.29% annually in the same periods, the report said.

   Yield rates will be much stronger in developing countries, the report said, albeit starting from lower levels. Wheat yields in developing countries are projected to grow at 1.38% per year through 2010, compared to the 2.64% per year since 1982; maize yields will increase at 1.49% annually, compared to 2.21% per year in 1982-93; and rice yields will grow at 1.20% per year, compared to 1.86% per year before.

   Still, yield levels for maize and coarse grains in developed countries will be about twice the levels of yields in developing countries, the I.F.P.R.I. report said; rice yields are expected to be 60% higher in developed countries.

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