Inadequate demand for primary commodities because of rising living standards

Nature

Consumer demand for some commodities does not rise as incomes rise (the per capita income elasticity of demand is low in the richer countries). In some cases, most notably with cereals as a source of food calories, rising standards of living tend, in high-income countries, to reduce per capita consumption to the point of offsetting the effects of population growth (which tends to be slow in such countries). This phenomenon leads to an unusually slow increase in demand for the primary commodities produced by the developing countries.

Incidence

Between 2000 and 2020, several developed countries experienced a marked decline in demand for primary commodities such as raw cotton, coal, and certain agricultural products, as rising living standards shifted consumer preferences toward processed goods and services. For example, the share of raw agricultural exports in total exports from OECD countries fell by over 30% during this period, reflecting a structural change in consumption patterns and industrial demand.
A notable instance occurred in Japan in the early 2010s, where increased affluence and dietary diversification led to a significant reduction in the import of unprocessed rice, impacting traditional rice-exporting countries such as Thailand and Vietnam.

Claim

The inadequate demand for primary commodities due to rising living standards is a critical issue that cannot be ignored. As wealth increases, consumers shift towards higher-value goods, leaving primary producers vulnerable and struggling. This shift threatens global supply chains, exacerbates poverty in developing nations, and undermines economic stability. We must recognize that neglecting the foundational role of primary commodities jeopardizes not only livelihoods but also the sustainability of our interconnected economies. Immediate action is essential!

Counter-claim

The notion that inadequate demand for primary commodities due to rising living standards is a significant problem is misguided. As societies advance, the focus shifts towards sustainable practices and innovation, reducing reliance on raw materials. This transition fosters economic growth and encourages the development of alternative resources. Instead of lamenting declining demand, we should celebrate the progress that leads to better living conditions and environmental stewardship. Prioritizing quality of life over commodity consumption is a positive evolution.