The global food import bill is expected to increase by US$51bn to US$1.8tn this year, according to the latest Food Outlook report by the Food and Agriculture Organization of the United Nations (FAO).
Issued by the FAO on 9 June, the report said the increase was driven by higher prices.
Published twice yearly, the report presents FAO’s reviews of market supply and demand trends for the world’s major food commodities, including cereals, oil crops, sugar, meat and dairy and fish. It also looks at trends in futures markets and shipping costs for food commodities. The new edition also contains two special chapters examining the role of rising prices for agricultural inputs, such as fuel and fertilisers, and the risks the war in Ukraine poses for global food commodity markets.
“The increasing cost of food is heightening concern and distress throughout the world,” the FAO said.
While global consumption of vegetable oils was expected to outpace production, despite demand rationing, world production of major cereals was expected to decline this year for the first time in four years, the FAO said.
Global oilseed production is forecast to contract in 2021/22, according to the report, primarily driven by expected lower soyabean and rapeseed outputs, with reduced yield levels despite further expansion in harvested areas.
For oils and fats, the FAO expects global production to increase marginally, with growth in palm oil production overshadowing the estimated losses in soyabean and rapeseed oil outputs.
In the meantime, global consumption of vegetable oils is expected to stagnate at the 2020/21 level, as demand rationing is anticipated for both food and non-food uses due to higher prices, supported by a weakening outlook linked to COVID 19-related lockdowns in China.
Looking ahead to the 2022/23 season, tentative forecasts suggested a possible sharp rebound in world production of oilseeds and derived products, the report said, while global consumption would be likely to resume growth at a moderate level.
For this reason, stock replenishment seemed possible, the FAO said, although world supply-demand balances would remain relatively tight, as suggested by below average global stocks-to-use ratios for both oil meals and vegetable oils.
Against a backdrop of rising food prices – with the FAO Food Price Index (FFPI) reaching a record high in March before dipping slightly in April – the agricultural sectors face supply limitations due to rising input costs, in particular for fertilisers and fuels, that could lead to further food prices, according to the report.
This could lead farmers to reduce input applications or switch to less input-intensive crops, the FAO said, which would lower productivity and negatively affect exports of key foodstuffs to international markets.
Based on current conditions, the situation does “not augur well for a market-led supply response that could conceivably rein in further increases in food prices for the 2022/23 season and possibly the next,” the report noted.