ABSTRACT
Significant factors that affect the market outlook for agricultural products over the next decade are policy changes and relatively strong projected income growth. The result is that the worldwide sustained economic growth increases demand for higher protein foods and their inputs. There is no evidence of a severe imbalance in supply and demand that could cause a sustained and large price increase or food shortage. However, with relatively low-stock levels continuing, year-to-year and seasonal price fluctuations are likely to be similar to what has been experienced since 1995. In these conditions, farmers and users of agricultural raw materials need to use risk-management tools to reduce their exposure to price risk. Although factors such as weather are always uncertain, most of the medium-term uncertainty in the outlook revolves around future policy developments. These include the outcomes of future World Trade Organization (WTO) negotiations, the accession of large countries like China and Russia to the WTO, the next phase of European Union (EU) agricultural policy reforms and the continuing enlargement of the European Union over the next decade.
