Brussels, 12/01/2012 (Agence Europe) - In its forecasts for agricultural markets 2011-2020, unveiled on Thursday 12 January, the European Commission says that between now and 2020 there will be a rise in the use of use of cereals in the EU, largely resulting from the increasing demand from the bioethanol (and biomass) industry. The report also predicts a slow-down in cattle and sheep production, and growth in pork and poultry.
The use of ethanol is expected to treble over the next ten years, reaching 30 million tonnes by 2020, according to the Commission report on prospects for EU agricultural markets in the period from 2011 to 2020. The increasing demand for ethanol will impact on soft wheat and, above all, maize, where production will go up from roughly 60 million tonnes in 2009 to 70 million tonnes by 2020. Ten million tonnes will be used to produce bioethanol.
The report makes clear that prospects for the European cereals market are driven particularly by the demand for biofuels. Cereal prices look set to remain high, the increase in yield is lower in the EU than in most competitor regions, and maize and soft wheat will continue to gain ground on the other cereals (for example, maize production will outstrip that of barley). Domestic maize production is predicted to rise sharply, but the EU will continue to rely on significant imports of this cereal. Tassos Haniotis, a director in DG Agriculture at the European Commission, said on Thursday that maize, soft wheat and barley price volatility will probably decrease in future.
The oilseed market is likely to continue to expand, but at a slower pace.
The Commission also expects sugar beet production to rise, also because of the demand for biofuels. It also says that isoglucose will probably gradually replace sugar beet in the production of consumption sugar. The reason for this is the ending of sugar quotas in 2015.
On the meat market, prospects for pork and poultry are relatively good, while beef and mutton production will continue to decline between now and 2020. Beef and veal production is expected to fall by 1% between 2010 and 2020 and mutton production by 8%. A 4% increase in pork production and a 4% increase in poultry production are forecast over that same period. The Commission says that, by 2020, the EU should, for the first time, become a net exporter of both pork and poultry.
On the milk and diary market, milk production is expected to expand slowly until 2015 (+7% between 2009 and 2020). Prospects are also relatively good for cheese and fresh dairy products (6% rise in production expected between 2009 and 2020). “It must be borne in mind that the diary sector is particularly sensitive to economic developments as it is a sector which is heavily dependent on what happens in the rest of the world”, Haniotis said. The EU's share of the world milk market is falling. The report also sets out prospects for agricultural income in the EU. It is expected that it will fall by 3.5% in the 15 older EU member states and increase by practically 35% in the 12 most recent members. Agricultural income across the whole of the EU is 25% higher than what it was in 2000.
Taking questions from the press, Haniotis said that the constant demand for biofuels was generating a certain increase in food prices. However, according to the Commission, the impact of biofuels on prices is much less than what had been expected (prices are stabilising in the United States). Price volatility increased because of the financiarisation of agricultural markets. The situation is relatively stable within the EU, he said.