Higher prices for animal fats and vegetable oils are helping drive what is expected to be a record global food import bill this year, forcing consumers to spend more and get less to eat, according to the UN’s Food and Agriculture Organization.
Total costs to import food worldwide are on their way to hit $1.8 trillion, with higher prices accounting for $49 billion of the increase and transport costs the remaining $2 billion.
“Worryingly, many vulnerable countries are paying more but receiving less food,” FAO says in the Food Outlook report released Thursday.
Meanwhile, FAO’s Global Input Price Index (GIPI), introduced just last year, is at an all-time high, having risen faster than the FAO Food Price Index in the past 12 months.
“This points to low (and falling) real prices for farmers, despite the higher prices faced by consumers,” FAO said in a news release. “That, in turn, stymies incentives for them to step up production in the future.”
“In view of the soaring input prices, concerns about the weather, and increased market uncertainties stemming from the war in Ukraine, FAO’s latest forecasts point to a likely tightening of food markets and food import bills reaching a new record high,” said FAO economist Upali Galketi Aratchilage, lead editor of the report.
The report projects a decline this year in global production of major cereals for the first time in four years, and a decline in global use for the first time in 20 years, but not a decrease in use for direct food consumption.
“World wheat stocks are set to increase marginally in the year, mostly due to anticipated build-ups of inventories in China, the Russian Federation and Ukraine,” FAO said. “Word maize output and utilization are forecast to hit new records, associated with greater ethanol production in Brazil and the [U.S.] as well as industrial starch production in China.”
FAO has proposed a Food Import Financing Facility “to provide balance-of-payment support to the low-income countries most reliant on food imports as a strategy to safeguard their food security,” the organization said.
More highlights, from FAO’s news release:
- “Global consumption of vegetable oils is predicted to outpace production, despite expected demand rationing.
- “While meat production is expected to decline in Argentina, the European Union and the United States of America, global output is forecast to expand by 1.4 percent, led by an 8-percent foreseen increase in pig meat production in China, reaching and even exceeding the level before the dramatic spread of the African swine fever virus in 2018.
- “World milk production is forecast to expand more slowly than in previous years, constrained by falling dairy herd numbers and lower profit margins in several major producing regions, while trade may contract from the elevated level of 2021.
- “World sugar production is expected to increase after three years of decline, led by gains in India, Thailand and the European Union.”
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