OECD-FAO Aglink-CO.SI.MO. Projection System by Stefania Vannuccini Fishery Statistician (Commodities) FAO Fisheries and Aquaculture Information and Statistics Service Favignana, September 2009

AGLINK MODEL OECD Dynamic, partial equilibrium supply-demand model Yearly basis since early 1990s Medium-term projections Agricultural key commodities Assumptions Coverage Close collaboration with member countries Influence of agricultural policy

CO.SI.MO MODEL FAO World Food Model FAO COmmodity SImulation MOdel Yearly basis since 2004 Updating Cycle Coverage Commodities Macro economic assumptions Parameters

OECD-FAO Projection Work Joint outlook preparation between OECD and FAO Started in 2004 Annual process Expansion of OECD Aglink model to developing countries Utilize global expertise

Aglink – CO.SI.MO. Partial Equilibrium Model Projection systems to examine future potential impacts –Policy impacts –Economic scenarios –Link to food security indicators

Aglink – CO.SI.MO. Key factors of assumptions World markets for agricultural commodities are competitive Domestically produced and traded commodities as perfect substitutes by buyers and sellers. Importers do not distinguish commodities by country of origin as it is not a spatial model Non agricultural markets, including fish, are treaded exogenously to the model

Aglink – CO.SI.MO. About equations 40 individual countries 19 regions About 40 commodities About variables 17 world clearing prices Simulation of market determination of equilibrium prices

AGLINK-CO.SI.MO. COMMODITIES WheatBeefSkim Milk Powder Coarse GrainsSheepmeatWhole Milk Powder RicePigmeatCheese OilseedsPoultryButter Vegetable OilsEggsFresh Dairy Products Oilseed MealsSugar Roots and Tubers (Cosimo) Cotton

AGLINK COUNTRIES ArgentinaEU-12China BrazilEU-15Japan CanadaEU-27Korea, Rep. of MexicoHungaryAustralia USANorwayNew Zealand Poland Russian Fed. Switzerland

CO.SI.MO. COUNTRIES AlgeriaIndonesiaSaudi Arabia Asia Pacific – LDCsIranSouth Africa Asia Pacific – OtherKorea, Rep. ofSouthern Africa – LDCs BangladeshMalaysiaSouthern Africa – Other Central America – LDCsMozambiqueTanzania Central America - OtherNigeriaThailand ChileNorth Africa – OtherTurkey ColombiaOther CISUkraine East Africa – LDCsOther Eastern EuropeUruguay East Africa – OtherOther South AmericaViet Nam EgyptPakistanWest Africa – LDCs GhanaParaguayWest Africa – Other IndiaPhilippines

Data Requirements Projections based on a calendar year (exc. crops) Annual time series for: –prices (usually export prices) –supply (area, yield, animal numbers...) –demand (food, feed, crush...) –trade (exports, imports) –policy variables (tariffs, CAP...) –macroeconomic data (GDP, GDPD, private consumption expenditure deflator, exchange rates, Brent crude oil price) –Commodity Production Cost Index

PARAMETERS/DATA World Food Model, FAPRI, USDA, OECD, expert estimates, literature Source of data: –Databases trade and market division FAO (EST) –FAOSTAT, national data, prices –OECD, EU Commission, USDA, national sources (politics) –COMTRADE (USDA), IDB and CTS (WTO), TRAINS (UNTAD), WITS (WB/UNCTAD), AMAD –IMF –UN population –Reuters –OECD questionnaires

Projections and elasticities Functional relationships linking supply and demand to prices are, in most cases, linear in the logarithms of the variables Equation coefficients are partial elasticities Source of elasticities Global market projections=Baselines

Scenarios The baseline provide a benchmark for alternative scenarios Scenarios try to address questions such as: –What are the likely impacts of market stocks? –What are the likely impacts of domestic policy changes? –What are the likely impacts of multilateral policy changes?

OECD-FAO Agricultural Outlook Country views are the starting point AGLINK CO.SI.MO is used to get a consistent and coherent picture Model outcomes adjusted through expert opinions Final reviews in OECD commodity working groups The datasets are available at:

OECD-FAO Agricultural Outlook Yearly Preparation: November-April Projections and related market analysis for some fifteen agricultural products over a ten year horizon The result is a plausible set of conditional projections It shows how these markets are influenced by economic developments and government policies and highlights some of the risks and uncertainties that may influence market outcomes

Adding fish to the AGLINK-COSIMO Inclusion of fish in the AGLINK – CO.SI.MO. model and in the FAO Agricultural Outlook Species Elements Capture-Aquaculture for supply Price index