The OECD-FAO Agricultural Outlook 2011-2020 3rd AD-HOC FISH PRICE INDEX WORKSHOP The OECD-FAO Agricultural Outlook 2011-2020 by Stefania Vannuccini Fishery Statistician (Commodities) FAO Fisheries and Aquaculture Statistics and Information Service 1

Outlook models Key role of outlook models Importance to have a good understanding on perspectives of developments in the food and agriculture sector Need to develop a model to analyze the outlook of the fisheries and aquaculture sector 2

Importance of fisheries sector In terms of food security The significant growth of aquaculture production The expansion of the coverage of food products and of the oil and feed markets The links and interactions with the agriculture sector 3

Interaction fisheries-agriculture Integrating farming Ecosystems, markets, products, prices, innovation, technology Competition on water and land resources Feed Fish meal, fish oil Raw material from agriculture and livestock 4

Aglink-CO.SI.MO. OECD FAO Aglink-CO.SI.MO. modelling system Partial equilibrium model for international agriculture and food markets Medium term projections Perform alternative scenarios OECD-FAO Agricultural Outlook publication 5

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 6

CO.SI.MO. Model FAO World Food Model FAO COmmodity SImulation MOdel Yearly basis since 2004 Updating Cycle Coverage Commodities Macro economic assumptions Parameters 7

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: www.agri-outlook.org 8

Fish model Construction of a satellite model on fish and fishery products After a few years of use as a stand alone component, possible merging to the AGLINK-COSIMO model Benefit also for the model as will expand the coverage of food consumption and in particular of protein as well as of the oil and feed markets 9

Fish model Two supply functions (capture and aquaculture) Capture: either exogenous, endogenous but only affected by el Niño and endogenous but responding to price (13%) Aquaculture, 99% endogenous and responding to price of output and feed Fish meal and oil are composed by two components: from whole fish and from fish residue

Fish model Demand is split to three end uses, food, fishmeal/fish oil and other uses (kept exogenous) Demand for fish meal and oil responds to the need of aquaculture, the own price and the price of the respecive oilseed products Imports and exports of fish are either exogenous or a function of domestic and world prices adjusted for tariffs and transport costs

Fish model: assumptions El nino will affect South American capture in 2010, 2015 and 2020. Fishing quota under-fill will be minimal. Aquaculture productivity gains will be smaller than in the previous decade. New feeding technics will not prevent increase in the ratio of fish to oilseed meal price. Japan fish and seafood production affected by tsunami in 2011 and gradually returning after. 12

OECD-FAO Agricultural outlook 2011-2020

Agricultural outlook 2011-2020 Agricultural commodity prices in real terms higher compared to 2001-2010. Production costs are rising and productivity growth is slowing (1.7% compared to 2.6%) Energy related costs and feed cost will continue to increase Resource pressures on water and land are increasing Need of further investments into productivity enhancements Per capita food consumption will expand most rapidly in Eastern Europe, Asia and Latin America, with highest increases for vegetable oils, sugar, meat and dairy products Trade is expected to grow by 2% per year, slower than the previous decade

Outlook: GDP GROWTH

Growth of per capita consumption 2011-20 vs 2008-2010

TOTAL FISHERY PRODUCTION million tonnes 17

Projections for capture fisheries million tonnes El nino 18

Capture fisheries * Indicates excluding USA, China and EU27 respectively 19

Projections for aquaculture production 1 000 tonnes 20

Growth rate of fish production by decades Source: FAO

Aquaculture production Total= 54.6 mt Total=72.4 mt * Indicates excluding USA, China and EU27 respectively 22

Fish meal production million tonnes 23

Chile and Peru, fish meal million tonnes 24

World utilization and consumption projections Utilization in million tonnes kg/capita Source: FAO

Increasing role of aquaculture in human consumption Source: FAO

Surpass in 2015 million tonnes 27

World per capita fish consumption kg per capita 28

General growth of fish consumption Source: FAO

Trend in world trade of fish and fishery products million tonnes live weight Trend 30

2020: trade of fish food by countries in quantity Exports Imports Source: FAO

Share of 7 major exporters to increase Total= 34.8 mt Total= 43.4 mt 32

Share of major importing countries to remain rather stable (about 68%) Total= 34.1 mt Total= 43.46 mt 33

Fish price projected to increase as prices of other commodities Traded products 34

Growing prices Source: FAO

Outlook: fish vs meat prices Source: FAO-OECD

Growing prices Source: FAO

Conclusion Projections indicate a continuous rise in demand for fish and fishery products, with growing trade and consumption Need to long-term resource conservation and effective management of resources as well as of aquaculture Differentiation of consumption, opening of new markets Risk of increase of costs of production due to stable production of fishmeal/fish oil Too high prices in the market will risk the effect of substitution with other emerging commodities

Outlook for fish: supply Major increases will depend on aquaculture. Factors to influence future growth of aquaculture: costs/availability of feed for selected species; access and availability of areas/water environmental impacts availability of technology and finance effects on biodiversity climate changes governance food safety and traceability issues Capture: importance of implement more cautious and effective fisheries management

Outlook for fish: demand Population/rural/urban Income Retail concentration in developed and developing which will affect demand Product development, technological innovation Continuous increase of trade Increased imports from developing countries Outsourcing of processing will continue Slow growth in per capita consumption

Improvements of the model obtaining better transport cost data obtaining more representative tariffs for the aggregated components obtaining or estimating FH food demand elasticities obtaining or estimating FHA supply elasticities identifying a better way to estimate value of capture fisheries

Next steps Present the fish model to the OECD Committee of Fisheries Ameliorate the fish model. Possible inclusion of the Fish Price Index in the Fish model Establish a better collaboration with OECD Fisheries Prepare a new run of the fish model and insert a new fish chapter in the OECD-FAO Agricultural Outlook 2012-2021 Final goal: inclusion of the Fish Model in the Aglink-CO.SI.MO. overall model

Links FH model and AGLINK-CO.SI.MO Three major links exist: introduction of the FH consumer price in the food demand functions of AGLINK/COSIMO the feed demand system the interaction between the FM and FL markets with their oilseed counterparts

Other integrations The Fishery and Aquaculture Department of FAO is also investigating for the possible integration of a fisheries and aquaculture component in some of the already existing models as well as to look for other potential models of FAO and other institutions/organizations 44

Fish to Fish to 2030 report, updating of Fish to 2020 (Delgado, et al. 2003) IMPACT model of the IFPRI Database prepared Modeling in development phase 45

FAO Global Perspective Studies for food and agriculture Review Long-term projections (30-40 years)of consumption and production of agricultural products and food, and of trends in world food security Recommandations by consultant to include fishery component in the studies 46

UK FORESIGHT Project run by the UK Government for Science The project looks out to 2050 and take a global view of the food system, considering issues of demand, production and supply as well as broader environmental issues 47

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