India Will Become Largest Milk Producer in 2026

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According to the ‘OECD-FAO Agricultural Outlook 2017-2026’, India will be the world’s largest milk producer by 2026.

The Agricultural Outlook 2017‑2026 is a collaborative effort of the OECD and FAO prepared with input from the experts of their member governments and from specialist commodity organisations. It provides a consensus assessment of the medium term (ten year) prospects for agricultural and fish commodity markets at national, regional and global levels. This year’s edition contains a special focus on the agriculture and fish sectors of Southeast Asia.

Highlights of the Outlook:

Milk production in India will grow 49 per cent; in 2026, India will be the world’s largest milk producer, with an output one-third above that of the second largest producer, the European Union.

Global production of wheat is projected to increase by 11 per cent over the outlook period of 2017-2026, while the wheat area increases by only 1.8 per cent.

The increase in wheat production is expected to occur through higher yields, most notably in Asia and the Pacific, which will account for 46 per cent of additional wheat production.

Within the region and globally, India (15 mt) will account for the biggest increase in production and Pakistan (6 mt) and China (5.5 mt) are also expected to have significant gains.

The European Union accounts for 13 per cent of the production increase. Rice production is expected to grow by 66 mt and will be almost exclusively driven by yield growth, which accounts for 93 per cent of additional production.

The global area dedicated to rice is expected to increase by only a per cent from the base period, while global yields will increase by 12 per cent. Major production gains are projected for India, Indonesia, Myanmar, Thailand and Vietnam with yields in these countries expected to increase by over 15 per cent.

According to this report, the world’s population will increase from 7.3 to 8.2 billion over the course of the next decade with India and Sub-Saharan Africa accounting for 56 per cent of the total population growth.

India’s population will grow from 1.3 billion to 1.5 billion, an increase of almost 150 million. India will overtake China and is projected to be the most populous country in the world by 2026.

By 2026, calorie availability is projected to reach 2 450 kcal per day on average in least developed countries and exceed 3 000 kcal per day in other developing countries. Still, food insecurity will remain a critical global concern, and the co‑existence of malnutrition in all its forms poses new challenges in many countries.

The demand growth for ethanol and biodiesel has weakened due to lower fossil fuel prices and fewer incentives from government policies. Even though energy prices are projected to increase, the derived demand for biofuel feedstocks, especially maize and sugarcane for ethanol and vegetable oil for biodiesel, will grow slowly, except in key developing countries where demand increases are driven by more pro‑active domestic policies.

Future growth in crop production will be attained mostly by increasing yields. Yield growth is projected to decrease slightly, but output could be raised by closing large yield gaps that continue to persist, especially in Sub‑Saharan Africa. The global cereal area will only increase marginally, while a further expansion of soybean area is projected to satisfy the demand for animal feed and vegetable oil.

Growth in meat and dairy production will be achieved from both larger herds and higher output per animal, with large differences in the intensity of production continuing to persist. Growth in poultry production accounts for almost half of total meat production expansion over the decade. Milk production growth is expected to accelerate compared to the previous decade, most notably in India and Pakistan.

Aquaculture dominates growth in the fish sector, as capture fish production is determined by the current level of stocks and governed by policies to limit over‑fishing. China will maintain a share above 60% of global fish production. Farmed fish production is the fastest growing protein source among the commodities in the Outlook.

The growth in agriculture and fish trade is projected to slow to about half the previous decade’s growth rate. However, trade will represent a broadly constant share of the sector’s output over the coming decade. Generally, agricultural trade has proven to be more resilient to macroeconomic fluctuations, than trade in other goods. Given relatively high protection in the farm sector, agricultural trade growth could be boosted by further market liberalisation.

Food imports are becoming increasingly important for food security, particularly in Sub‑Saharan Africa, North Africa, and the Middle East. While for some countries this may reflect greater demand but insufficient natural resources for growing food domestically, in other cases it may indicate agricultural development problems which need attention.

Net exports are projected to increase from the Americas, Eastern Europe and Central Asia, while net imports are expected to increase across other Asian and African countries. Exports remain concentrated in a few supplying countries contrasting with widely dispersed imports. This may imply a greater susceptibility of world markets to supply shocks, stemming from natural and policy factors, rather than demand shocks.

Under the Outlook’s expected fundamental supply and demand conditions, real prices of most agricultural and fish commodities are anticipated to follow a slightly declining trend, keeping them below previous peaks over the next ten years. Prices of agricultural commodities are subject to considerable volatility and may show large deviations from their long‑term trends for an extended period of time.

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