DUSHANBE, July 2, 2015, Asia-Plus - The latest  Agricultural Outlook   report produced by the OECD and FAO notes that strong crop yields, higher productivity and slower growth in global demand should contribute to a gradual decline in real prices for agricultural products over the coming decade, but nonetheless, prices will likely remain at levels above those in the early-2000s.

Lower oil prices will contribute to lower food prices, by pushing energy and fertilizer costs down, and removing incentives for the production of first-generation biofuels made from food crops.

The OECD-FAO Agricultural Outlook 2015-2024 projects that agricultural trade will increase more slowly than in the previous decade, while its share of global production and consumption will be stable.  The Outlook points to further concentration of agricultural commodity exports among a few exporting countries, coupled with a dispersion of imports over an ever-larger number of countries - trends that make it imperative to ensure the smooth functioning of international markets.

The growing role of a relatively small group of countries in supplying global markets with key commodities could increase market risks, including those associated with natural disasters or the use of disruptive trade measures.

Major changes in demand are expected in developing countries, where population growth, rising per capita incomes and urbanization will increase demand for food, according to the report.  Rising incomes will prompt consumers to continue diversifying their diets, notably by increasing their consumption of animal protein relative to starches.  As a result, the prices of meat and dairy products are expected to be high relative to crop prices.  Among crops, the prices of coarse grains and oilseeds, used for animal feed, should rise relative to the prices of food staples.