The Food and Agriculture Organization of the United Nations (FAO) has revealed in its latest report that Vulnerable Countries are paying more but receiving less food.
The global food import bill will hit a new record of US$1.8 trillion this year. Still, higher prices and transport costs rather than volumes account for the bulk of the expected increase, according to a new report released today by the Food and Agriculture Organization of the United Nations (FAO).
“Worryingly, many vulnerable countries are paying more but receiving less food,” says FAO in its latest Food Outlook.
The global food import bill is projected to rise by $51 billion from 2021, of which $49 billion reflects higher prices. Least Developed Countries (LDCs) are anticipated to undergo a 5-percent contraction in their food import bill this year. In contrast, sub-Saharan Africa and the Net food-importing Developing Countries are expected to register an increase in total costs, despite a reduction in imported volumes.
“These are alarming signs from a food security perspective, indicating that importers will find it difficult to finance rising international costs, potentially heralding an end of their resilience to higher prices,” the report notes.
“Given 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 Food Outlook.
Least Developed countries cut down on importation
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.
Animal fats and vegetable oils are the most significant contributor to the higher import bills expected to be reached in 2022, although cereals are not far behind in developed countries. Developing countries, as a whole, are reducing imports of grains, oilseeds, and meat, reflecting their incapacity to cover the increase in prices.
Issued twice a year, Food Outlook offers FAO’s reviews of market supply and demand trends for the world’s significant foodstuffs, including cereals, oil crops, sugar, meat, dairy, and fish. It also looks at future market trends and food commodities’ shipping costs. The new edition also contains two special chapters examining the role of rising prices for agricultural inputs, such as fuel and fertilizers, and the risks the war in Ukraine poses for global food commodity markets.
FAO Food Price Index
Along with rising food prices – with the FAO Food Price Index (FFPI) near its all-time high and prices of several staples having registered large runups in the past year – the agricultural sectors are exposed to supply limitations due to rising input costs, in particular for fertilizers and fuels, that could spur further food price rises.
The Global Input Price Index (GIPI), a new tool introduced by FAO in 2021, is now at an all-time high and has risen even faster than the FAO Food Price Index over the past 12 months.
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