World: World grain prices to rise by 30% by 2020 – Japan’s Ministry of Agriculture, Forestry and Fisheries

The price of rice, wheat and other grains will rise by around 30 percent by 2020 around the world due to population growth as well as rising demand in China and other fast-growing emerging countries, the Japanese farm ministry said on February, 18.

According to a report by World-Grain.com, the Ministry of Agriculture, Forestry and Fisheries said the world's grain consumption will increase by 500 million tons to 2.7 billion tons in 2020 compared with 2008.

Grain prices have been rising recently, becoming a factor in the political changes in Tunisia and Egypt. Farm ministers of the Group of 20 economies are scheduled to meet in June to tackle the issue.

Japan will present its forecast at the meeting and appeal for international cooperation to ensure a stable food supply, ministry officials said.

The farm ministry said the world's grain consumption, including rice, wheat and corn, stood at 1.7 billion tons in 1996 but surged to 2.2 billion tons in 2008. It is projected to reach 2.7 billion tons in 2020, which would exceed the estimated yield in that year of 2.65 billion tons.

The shortage is likely to prompt countries around the world to dig into their grain inventories, lowering the inventory rate to 15 percent, a level lower than the 17 to 18 percent deemed to be safe by the Food and Agriculture Organization, it said.

Grain prices are expected to remain on an upward curve. Taking into account the rising cost of living, the price of rice per ton will be 31 percent higher in 2020 than in 2008 at $704, while wheat will be up by 24 percent to $297 per ton and corn by 35 percent to $224.

By region, demand for grain will likely increase drastically in Asia, Africa and the Middle East. Particularly in China, imports of soybeans for livestock feed are projected to surge to about 50 million tons in 2020 compared with 1.8 million tons in 1996 as the higher income level is expected to increase meat consumption, it said.

As a result, more than 50 percent of the world's soybean exports will likely be headed for China, according to the ministry.

Forecasts on food supply and demand have also been released by the FAO, the Organization for Economic Cooperation and Development and the U.S. Department of Agriculture. The Japanese farm ministry has been releasing 10-year forecasts since 2009.

23 February, 2011