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Growing Populations and Wealth Changing Food Demand

26 November 2012

ANALYSIS - The growth of the global population to reach over 9 billion by 2050 is expected to change global consumption, supply and demand patterns for food, writes Chris Harris.

The population growth and the growing wealth in the developing nations are changing consumption trends.

In China and South East Asia, the migration of the population from the rural to the urban economy is changing the demand for a more protein enriched diet.

However, the change in consumption patterns may not be so much a change from cereals to meat and fish, but a change to eating more edible oils and more milk and dairy products.

Such a change and a pattern of growth will not only have an effect on the economies of developed and developing nations but also on agriculture and the demand for different crops.

Speaking at the recent Crop World conference in London Gautum Sirur from Cropnosis, said that while generally the consumption of edible oils globally is flat, there is a rapid rise in southern Asia.

Dairy consumption is seeing a similar trend particularly in India and the Sub-Continent.

"Dairy consumption is growing faster than meat consumption," Mr Sirur said.

"And countries that have this sort of growth also consume more legumes.

"Edible oil consumption has a great environmental impact as countries have to import it, particularly palm oil.

"And when you have a rise in milk consumption you have to look to the feedstock that goes to have high yielding dairy breeds."

He said that these issues of a changing environment forced by new oilseed crops and growing feed for dairy cattle need to be addressed if the world is to meet the future demand for food.

Market analyst Jonathan Shoham said that while global demand for food was smooth and predictable the supply side of the chain was unpredictable and volatile.

He said that globally there are half a billion farmers supplying food for 7 billion consumers - a figure that is growing all the time.

While the supply side is driven by the need to enhance yield and technological and environmental factors, demand is driven by taste and nutritional properties of food and by economic and social factors.

Recently, however, the demand for biofuels, particularly in the US, has changed the dynamics of supply and demand, because it is not driven by consumer demand.

He said that the demand for biofuels is politically driven and it could double the crop demand.

Food demand is also going to be affected by biomaterials and the bioeconomy and the acceptance of genetically modified foods as well as the way the global GDP grows and the amount of waste that is generated.

Between 30 and 40 per cent of crops are lost during the production process around the world and the supply chain in emerging countries wastes about 17 per cent of production while 12 per cent is lost in the supply chain in OECD countries. Consumers in the developed countries, however, waste more than in developing nations - eight per cent compared to two per cent of production.

Most of the growth in food demand will come from South and East Asia and sub-Saharan Africa and it is expected that there will be a growth in food demand of 1.1 per cent compound annual growth rate up to 2050.

Asia and sub-Saharan Africa are also expected to account for the growth in energy demand.

The growth in demand will be largely for fruit and vegetables, meat, dairy products and edible oils while cereals' demand is expected to fall.

Mr Shoham said that as countries and populations move up the economic ladder, diets become more diverse and consumer demands start to change, bringing in consumer demand for food safety, traceability and sustainability. The growth in wealth starts to introduce environmental and social drivers to demand.

People want to know more about their food - its carbon footprint, its origin and how it has been produced.

As wealth grows the reasons for demand change. Initially it is necessary to have sufficient food, then consumers will demand safe and sufficient food and then they will want to examine the nutritional and health values of the food and question genetic modification until the consumer starts to look at the ethical drivers behind food production.

In the end, as populations grow wealthier demand for food changes and the resons for that demand change too.

Chris Harris

Chris Harris



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