World Food Policy Volume/Issue 2-2/3-1 Fall 2015/Spring 2016 | Page 140

Food Security in an Age of Falling Commodity and Food Prices

Figure 5: Percentage Change of Real Prices in 2015–2024 (Average) Relative to Two
Alternative Base Periods
Source: Author’s calculations based on OECD–FAO (2015)

The broader picture across a larger
set of agricultural commodities included
in the OECD/FAO Outlook indicates
that for the average of the 10 year period
covered in the market projections, i.e.,
2015–2024, nearly all commodities are
expected to be at a higher price level in real
terms then where they stood on average
in the years 1992–2006, i.e., the 15 year
period before the price explosion (see the
blue bars in Figure 5). And if we take the 7
year period immediately before the price
boom of 2007 as the base, relative to that
period prices in real terms are expected
for most agricultural commodities to be
~20%–30% above the level that we knew

before the price boom had occurred (the
red bars in Figure 5).

What are the major factors that
may explain why we appear to have
experienced an upward structural shift in
agricultural and food commodity prices,
as indicated by such price projections?
This is not the place for an extensive
treatment of that complex issue. Only
three points will be mentioned.4

First, agriculture and the food
economy are large users of energy and
hence closely linked to price developments
on energy markets. Rapidly rising oil
prices are therefore believed to have been
one of the factors behind mounting prices

4

For a much more detailed analysis and discussion, see the annual publications of the OECD/FAO
Outlook.

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