The Food and Agriculture Organization (FAO) of the United Nations has released a report highlighting the forecasted increase in the world’s food import bill, although at a slower pace compared to previous years. The report reveals that rising world prices, particularly for fruits, vegetables, sugar, and dairy products, are dampening demand, especially in economically vulnerable nations.
According to FAO’s Food Outlook, the global food import bill is expected to reach a new record of $1.98 trillion in 2023, reflecting a 1.5 percent increase compared to 2022. This growth rate is significantly lower than the 11 percent increase observed in 2022 and the 18 percent increase in 2021.
While food imports by advanced economies continue to expand, the report predicts a decline of 1.5 percent in the import bill for the group of Least Developed Countries (LDCs) and a 4.9 percent decline for net food-importing developing countries (NFIDCs).
FAO’s Markets and Trade Division warns that the decline in food import volumes for these groups is concerning and indicates a decline in purchasing capacity. The report also highlights the fact that lower international prices for primary food items have not fully translated into lower domestic retail prices, suggesting that cost-of-living pressures could persist in 2023.
The latest edition of Food Outlook features a special chapter that examines changes in the food component of the consumer price index for NFIDCs. It explores how currency movements, particularly in relation to the US dollar, impact food price inflation in these countries. The report notes that while the depreciation of the US dollar during the 2007-08 global food crisis helped food importers offset the increase in food prices, recent years have seen the reverse effect. For example, world maize prices decreased by 10.2 percent between April 2022 and September 2022, but only by an average of 4.8 percent when calculated in real local currencies of NFIDCs.
FAO Senior Economist El Mamoun Amrouk, author of the chapter, emphasizes the importance of well-tailored interventions to combat inflation. Without such interventions, rising food prices can lead to social unrest and increased financial challenges, undermining efforts to fight poverty and food insecurity.
The Food Outlook report also provides forecasts for the production, trade, utilization, and stock levels of major food commodities worldwide. It points to expected increases in production across most categories, including rice, coarse grains, oilcrops, milk, sugar, meat, fish, and fishery products. However, global wheat output may decline from the all-time high achieved in the previous season.
The report serves as a valuable resource for policymakers, analysts, and stakeholders involved in global food markets, providing insights into current trends and potential challenges in the food industry. It underscores the importance of addressing rising prices and ensuring access to affordable food for all, particularly in vulnerable economies.
