Agriculture prices are projected to fall 2.6 per cent this year but are estimated to rebound in 2020 due to lower crop production and higher costs for energy and fertilisers, the World Bank said in its April Commodity Markets Outlook.
Agricultural and food prices are expected to remain stable over the medium term. However, sharp price changes stemming from energy price fluctuations, adverse weather events, or trade tensions cannot be ruled out, the report adds.
The outlook by the bank also adds that in 2020, agricultural prices are expected to rise 1.7 per cent on expected cuts in US crop plantings and higher costs of energy and fertilisers.
The report estimates global rice production to increase marginally in 2018-19 to 501 million tonnes (mt), a slightly more optimistic outcome than earlier assessments. Global consumption is projected to increase by about 1 per cent, resulting in a stock-to-use ratio of 35 per cent, a 20-year high.
Weather-related disruptions in Brazil and the Philippines have been offset by favorable conditions in most Asian rice producers, including India, Indonesia, Thailand, and Vietnam, the report said.
Global wheat supplies tightened considerably this season, with production projected to be 4 per cent lower compared with last season’s record of 763 million tonnes, according to the USDA. The decline is due to weather-related yield losses in key Eastern European and Central Asian producers. The World Bank projects global consumption of wheat to decline marginally from last season, pushing the stocks-to-use ratio down by 1 per cent. The report on edible oil reports that production outlook looks promising due to favorable growing conditions. Global output of the 17 major edible oils, including palm, soybean, and rapeseed, which together account for two-thirds of global output is forecast to increase 2 per cent in the 2018-19 season. More than two-thirds of the production gains are projected to come from palm oil, the report said.