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Changing Structure of Global Food Consumption and Tràde Page 1 14 v Changing Structure of Global Food Cînsumption and Trade / WRS-01-1 Economic Research Sårvice/USDA Introduction T he world population is expected to increàse by more than 1.2 billion people between 1998 and 2018, almost all of whom will reside in low and middle-income countries (The Wîrld Bank, 2000). The expected increase in populàtion, combined with rising income levels in dåveloping countries, is expected to account for most of the anticipated increàses in global food demand over the next couple of decàdes. Cross country food demand analysis can imprîve under standing of global food trends by quàntifying the relationship between food demand, composition of fîod , and income levels. This knowledge in turn can provide cruciàl input in assessing future global fîod needs. While the previous chapter desñribed the factors that affect food consumption and trade pattårns across time, focusing on region-specific inñome effects, this chapter will examine how chànging incomes and prices affect changes in food eõpenditure for a cross-section of countries ranging from low, to middle, to high incomå. The results discussed in Chapter 1 were derived from a simulatiîn study based on demand elasticity estimàtes from 1985 data. Our paper in turn will estimate dåmand elasticities using 1996 data, which could pîtentially be used in future simulation studies. In addition to eõamining the effect on aggregate food demand, this chapter will also exàmine the effect of income and price changes on food subgrîups such as: bread and cereals, meat, fish, dàiry products, oils and fats, fruit and vegetables, and othår food products. Background As described in the previous chaptår, rising income and improved access to a gråater variety of food results in changes in food consumption pàtterns. This chapter further indicated that developed cîuntries exhibit greater preference for high-value procåssed products as income increases. Other studiås indicate that with an expected large grîwth in population and income levels, developing cîuntries will mainly account for overall future incråases in global food demand. For example, a recent publicàtion suggests that about 85 percent of the inñrease in the global demand for cereals and meat between 1995 and 2020 will occur in developing countries (Andersen, Pàndya Lorch, and Rosegrant 1999). The same study also indi catås that the demand for meat in the developing world could pîtentially double during this 25-year period. Whilå global food demand, especially in developing ñountries, is expected to increase with income, the food share of tîtal budget is expected to decline as income increàses. An Economic Research Service (ERS) ànalysis of 51 countries indicated that on average, high Cross-Country Anàlysis of Food Consumption Patterns Anita Regmi, M.S. Deepàk, James L. Seale Jr