World’s food import bill is rising despite large production and robust supply
Staff Writer |
While food commodity prices have been generally stable, the cost of importing food is set to rise in 2017 to $1.413 trillion, a 6 percent increase from the previous year and the second highest tally on record according to FAO's latest Food Outlook report.
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The higher import bill is driven by increased international demand for most foodstuffs as well as higher freight rates.
Of particular concern is the economic and social implications of the double-digit increases in the food import bills for Least-Developed Countries (LDCs) and Low-Income Food-Deficit Countries (LIFDCS).
"Higher bills do not necessarily translate into more food being bought by them as the cost of importing has greatly escalated" said FAO economist Adam Prakash.
The higher import costs come at a time when inventories are robust, harvest forecasts are strong and food commodity markets remain well supplied.
The food commodity outlook, issued twice a year, takes a close look at the markets of key food categories, including cassava, the livestock and dairy sectors, fish, vegetable oils and the main cereal grains.
While production trends are broadly strong across the board, average prices in international transactions can mask more specific trends.
For example, while international wheat prices have been flat, U.S. Hard Red Spring wheat, a popular high-quality variety with enough protein content to make noodles and pasta, was 40 percent higher in July 2017 than a year ago.
Aromatic rice varieties have risen eight times faster than the FAO All Rice Index, which is up 4 percent on the year.
Likewise, the FAO Butter Price Index has risen 41 percent so far in 2017, more than three times as much as the Dairy Price Index of which it is a component.
The livestock and dairy sectors are particularly dynamic. The meat import bill is set to reach an all-time high of $176 billion this year, up 22 percent from 2016.
World milk production is predicted to grow by 1.4 percent, led by a robust 4 percent expansion in India, even as more stringent environmental regulations and quality controls in China may lead to a contraction there.
World output of oilseeds oils - vegetable oils and animal fats are the largest items in the LIFDC import bills - is expected to increase slightly this year after last year's strong season.
But global soybean production, despite a planting boom in the Northern Hemisphere, is set to decline as yields return to normal levels after last year's nearly optimal weather. ■