São Paulo – The prices of all agriculture products should decline in the next decade, according to a study by the Food and Agriculture Organization of the United Nations (FAO) and by the Organisation for Economic Co-operation and Development (OECD), done in partnership with Fundação Getúlio Vargas (FGV) Projetos. The decline, however, shouldn’t be detrimental to Brazilian farmers because investments in productivity should compensate for the losses. The estimation was released this Thursday (16th) in the city of São Paulo, and takes into account estimation about the growth of production and the agricultural productivity upward trend.
The head of OECD’s Agro-Food Trade and Markets Division, Jonathan Brooks, estimates that food prices in the world should decline but to higher levels than pre-2008, when there was a strong increase due to the world economic crisis. “But, at early 2000s the prices were well below the trend. We believe [the estimation] it will drop [in the future] but not to the 2000s levels”, he declared.
According to Brooks, the consumption of basic foodstuffs in emerging countries is showing a weak growth of demand. “We see a higher demand of protein in the developing countries, that’s why we have an increase in the price of meats and dairies. Grains and oilseeds had a higher increase of prices over basic foodstuff”, he said.
The outlooks for agriculture are positive for Brazil, according to Brooks, since the country will find more opportunities driven by the productivity’s growth, although not as great as the ones seen in the last ten years. “The productivity of meat and cereals will increase in Brazil. The production of biofuels has also increased substantially”, he said.
According to the study, the area projection of the main crops in the country indicates a growth of 20% until 2024, reaching 69.4 million hectares, with a growth of 1.5% per year. The estimation takes into account the use of the land for oilseeds, raw grains, rice, wheat, sugar cane and cotton.
Oilseeds, especially soybean, will continue to predominate when it comes to the use of land in Brazil, answering for almost half of the crop area in 2024. Currently, Brazil is the second largest soybean producer in the world, behind only the United States. The FGV’s report shows that Brazil has the biggest potential, among all producing countries, to expand its production even more.
The price of soybean should remain relatively high in the next decade, increasing 6.9% per year. The production of oilseeds should increase in 2.5% per year, reaching 108 million tons. The estimation points to an increase of 23% of soybean cultivating area, reaching 34.3 million hectares in 2024. Consumption should go up 2.3% per year.
*Translated by Sérgio Kakitani
