According to my projection, and I believe there will be an enormous grain shortfall of 320 million tons in developing Asian countries in 2020. The breakdowns are 170 million tons in China, 15 million tons in India and 417 million tons throughout the world. Although the high income countries export 172 million tons, that is far below the projected deficit in year 2020. This shortfall is significant, especially when one considers that the total world grain trade volume was 230 million tons in 1993. The reasons that such a significant grain shortfall are that the population explosion and high economic growth in developing countries, principally in China, will bring about a fast increase in consumption of animal protein, which will lead to an explosive increase in demand for feed grains, and that increase in grain supply will be restricted by limitations in natural resources and in the improvement of agricultural technology in the developing countries and maintenance of the agricultural policy transformation in Europe and America into the 21 st. century. The projection of a significant future shortfall by Brown is also for the similar reasons.
The estimation of significant grain shortfall by Brown and me will bring about a rise in the prices of grains in the world trade market. According to my forecast, assuming the long term price elasticity of the world grain supply and demand to be 0.15 (ratios between rates of change in supply and demand against the price change rate causing the changes in the supply and demand), the international grain trade price will increase by 50% compared to its 1993 level by 2020. This increase in the grain trade price will lead to considerable increase in the domestic price of rice and other grains and will cause significant difficulties to the huge impoverished people in the developing countries, who now numbers more than 1.1 billion, and will likely be large in year 2020.
A significant global shortfall of grains is forecast for year 2020 because of the long-run transformation in the European and American agricultural policies, the limitations in the natural resources and in the improvement in agricultural technology, and population explosion and fast economic growth in the developing countries which lead to fast increase in the demand for food and feed grains.
