Rome — The global cost of food imports is on track to hit a new record of $1.8 trillion this year, but most of the projected increase is due to rising prices and transport costs rather than rising prices. volumes, according to a new report released today by the Food and Agriculture Organization of the United Nations (FAO).
“It is worrying that many vulnerable countries pay more, but receive less food,” says the FAO in the latest edition of the Food Outlook report.
The global cost of food imports is projected to increase by US$51 billion from 2021, of which US$49 billion will reflect higher prices. The least developed countries are estimated to see a 5 percent contraction in their food import costs this year and sub-Saharan Africa and the group of net food-importing developing countries to see an increase in total costs, despite of the reduction in imported volumes.
“These are alarming signs from a food security perspective, as they indicate that importers will find it difficult to finance rising international costs, which may herald the end of their resilience to price increases,” according to The report.
“Given rising input prices, weather concerns and heightened market uncertainty as a result of the war in Ukraine, the latest FAO forecasts point to the likelihood of contracting food markets and food import costs reaching a new record,” said Mr Upali Galketi Aratchilage, FAO Economist, Lead Editor of the Food Outlook report.
FAO has proposed the creation of a Food Import Financing Fund to provide balance of payments support to low-income countries that are most dependent on food imports as a strategy to safeguard their food security.
Animal fats and vegetable oils are the products that contribute most to the increase in import costs projected for 2022, although closely followed by cereals in the case of developed countries. Developing countries as a whole are reducing imports of grains, oilseeds and meat, reflecting their inability to cover rising prices.
Published twice a year, the Food Outlook report provides FAO’s reviews of supply and demand trends in the markets of the world’s major food commodities, including cereals, oil crops, sugar, meat and dairy products, and fish. Trends in forward markets and transportation costs for food staples are also examined. The new edition also contains two special chapters that examine the role of rising prices for agricultural inputs, such as fuel and fertilizer, and the risks that the war in Ukraine poses to world food markets.
Source: Food and Agriculture Organization of the United Nations