Agricultural markets and global state of food suply

Since the beginning of the 2000s the situation in the global agro-food market is characterized by the upward trend against the background of price volatility. The increase in consumption in developing countries, especially China and India, along with rising incomes and a shift in demand for more nutritious foods are some of the factors that determine the long-term increase in demand for agricultural commodities. For markets of grains and oilseeds additional factor for growth in demand was increasing use of these products for industrial purposes, including biofuels, as a result of some countries' (US, EU) policy to replace fossil fuels, which have become significuntly more expancive.

Supply of agricultural products has not kept pace with growing demand as a result of the constant increase in costs for material and technical resources, reducing acreage, more frequent incidences of poor cereal harvests in exporting countries,productivity drop in the agricultural sector due to declining financing for agricultural R&D programs.

Thus, in February 2011, both nominal and real food prices indicators calculated by FAO (http://www.fao.org/worldfoodsituation/wfs-home/foodpricesindex/en/) reached a historical high since 1990. Sugar, vegetable oils, and grain markets were characterized by significant growth in prices.

The most sensitive to rising prices for agricultural commodities are low-income consumers, which are mainly concentrated in the developing and underdeveloped countries. Many developing countries are faced with major difficulties in supplying the population with food products. Recent political events in North Africa (Algeria, Tunisia, Egypt), Yemen and other countries are to some extent a manifestation of the impact of rising food prices.

In order to mitigate the problems caused by the scarcity of food or a decrease in its availability to vulnerable people it is important to develop a set of interrelated measures, not only at the level of individual countries, but also at the regional level. This is the aim of the Eurasian Center for Food Security activities in the Eurasian region.