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Global food import bill to hit all-time high in 2021

Victor Uzoho

The Food and Agriculture Organization (FAO), said global food trade has accelerated and is poised to hit a record in both volume and value terms in 2021.

According to the United Nations agency, while the global food trade has shown remarkable resilience to disruptions throughout the COVID-19 pandemic, rapidly rising prices of food commodities and energy pose significant challenges for poorer countries and consumers, who spend large shares of their incomes on necessities.

FAO predicted that the global food import bill could reach an all-time high in 2021 and surpass $1.75 trillion, making a 14% increase from last year’s and 12% higher than the earlier forecast in June 2021.

This was revealed in the new Food Outlook released yesterday, on the FAO official website, which was accessed by Sustainable Economy.

According to the report, the increase was driven by higher price levels of internationally-traded food commodities and a threefold increase in freight costs.

“Developing regions account for 40 per cent of the total and their aggregate food import bill is expected to rise by 20 per cent compared to 2020.

“Even faster growth is expected for Low-Income Food Deficit Countries, due to higher costs more than higher food import volumes.

“Developing regions are facing sharp increases in the prices of basic staples such as cereals, animal fats, vegetable oils, and oilseeds, while high-value foods, such as fruits and vegetables, fishery products, and beverages are driving the bulk of the increases for developed regions,” the report stated.

Issued twice a year, Food Outlook offers FAO’s reviews of market supply and demand trends for the world’s major foodstuffs, including cereals, vegetable oils, sugar, meat, and dairy and fish. It also looks at trends in futures markets and shipping costs for food commodities.

Developing regions are facing sharp increases in the prices of basic staples such as cereals, animal fats, vegetable oils, and oilseeds, while high-value foods, such as fruits and vegetables, fishery products, and beverages are driving the bulk of the increases for developed regions.

Furthermore, the report stated, “World output prospects for major cereals remain robust, with record harvests expected in 2021 for maize and rice, although cereals utilization for human consumption and animal feed is forecast to grow faster.

 “Following a tight balance in 2020/21, preliminary forecasts for the 2021/22 season point to some improvements in the overall supply situation for oilseeds and derived products, but their respective end-season stocks could remain below average.

“World sugar output in 2021/22 is forecast to rebound after three years of contraction but still fall short of global consumption. The world sugar trade is foreseen to decline slightly because of reduced availability in key exporting countries and rising prices.

“World meat production in 2021 is forecast to expand, principally triggered by a swift output rebound in China, especially pig meat. Notable demand-led output expansions are expected in all major producing regions, except Oceania. A growth slowdown in the global meat trade is likely due to anticipated declines in imports by leading importing regions, especially Asia and Europe.

“Global milk production in 2021 is forecast to expand, with anticipated increases in all major producing regions, led by Asia and North America. Global trade in dairy products is also forecast to expand, amid the ongoing economic recovery from COVID-19 market disruptions. However, in recent months, the import growth rate has slowed down due to rising domestic production and sluggish consumer demand.

“Fisheries and aquaculture output in 2021 is forecast to grow by 2.0 per cent from the 2020 level, signalling that new market dynamics resulting from the pandemic – which exacted a heavy toll on this sector – appear likely to endure in the long term. Fish trade is bouncing back despite high freight costs and logistical delays.”

Meanwhile, the report noted that financial instruments such as futures and options related to major agri-food commodities have failed “to attract the speculative fervour marked by other high-priced years.”

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