Agricultural Outlook 2015-2024 report jointly released by Food and Agriculture Organization (FAO) and Organization for Economic Co-operation and Development (OECD) shows that the prices of global agricultural products are expected to steadily decrease in the next decade for the reason that production increase may exceed demand; decrease on crude oil price may also lead to food prices decreasing for the reason that energy and fertilizer costs will decrease. However, agricultural product prices may not be lower than the level at the beginning of 2000.

This report points out that the increasing demand on livestock feed will exceed increasing demands on biofuel for the reason that meat consumption in emerging markets will increase. Additionally, decrease in crude oil price and changes in government policies also decrease demands on biofuel based on crops.

The report shows that strong per unit area yield of crops, improved productivity and slow global demand increase will cause agricultural product prices gradually decrease in the next decade. Nonetheless, agricultural product prices may also be higher than the level at the beginning of this century.

The reason for production increase of agricultural products may be the improved productivity and decreased prices of means of production. FAO expects that till 2024, global wheat production will increase to 786.7 million tons, higher than 7 million tons of 2014; rice production will increase from 494 million tons to 564.1 million tons; global oilseeds production will be expected to increase from 425.2 million tons to 516.4 million tons; and white sugar production 257.7 million tons to 275.6 million. Although the ratio of global production and consumption in next decade will keep stable, the growth rate of agricultural product trade will be lower than the level of last decade.

The report shows that in short term, cereal prices may decrease, and the main reasons include cereal production in 2013 and 2014 creating higher levels in history, high inventory, slow economic development and decreased crude oil price. However, in view of middle term, cereal prices may slightly increase due to increase in production cost. The rice price rebound time may be later than other cereals for the reason that large inventory in Thailand will create pressure on rice price in next few years. Oilseeds price may follow cereal price, which decreases in short term and tends to increase in middle term. Calculated by real values, prices of oilseeds and finished goods may decrease in the next decade.

The report points out that due to saturated capita consumption in emerging economies, biodiesel production will be slow in growth rate and vegetable oil demands will reduce, which will cause vegetable oil price being faster than protein meals in price decrease.