Bidwells Agribusiness comment on the new OECD / FAO "Agricultural Outlook" report
15 June 2010The outlook for the agricultural sector over the next decade remains positive and upbeat, according to the annual joint report from the OECD and the UN Food and Agriculture Organization (FAO).
Commenting on the release of the new "OECD-FAO Agricultural Outlook 2010-2019" Carl Atkin, Head of Research at Bidwells Agribusiness said "the new outlook sees average wheat and coarse grain prices over the next 10 years between 15-40 percent higher in real terms (adjusted for inflation) than their average levels during the 1997-2006 period. Real prices for vegetable oils are expected to be more than 40 percent higher. Dairy prices are projected to be on average between 16-45 percent higher.“ This is in line with other medium term projections although some other agricultural economists are even more bullish about the medium term price outlook.
"The strong economic growth in emerging markets is an important factor underpinning growing demand and higher prices, together with an increasing demand for land-based bioenergy production. It is interesting that the report singles out Brazil and the Former Soviet Union as two areas of the world where production growth will increase massively – 40 per cent and 20 per cent respectively – which re-enforces the continued interest in investment into farmland, operations and value chain activities especially in these two geographies"
“Increasingly investors are looking to capitalise on this sustained uplift in soft commodity prices by gaining exposure to farmland, farming and value chain opportunities.” concludes Mr Atkin. “Investors see the sector as an important inflation hedge and portfolio diversification and we are working with a number of investors to help them formulate their strategies. Our work is global and we are engaged in fund management, strategic advice, finding assets, negotiating purchases, due diligence and operational management”.
Contact us
For further information please contact Carl Atkin Head of Agribusiness Research tel; 01223 559 539 or email.Alternatively visit our Agribusiness pages; bidwells.co.uk/agribusiness
