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Food Outlook – Semi-Annual Report on the Global Food Markets, November 2021 – World

World food import bill is set to reach a record high in 2021

The FAO’s new Food Outlook report examines the drivers of rising prices for food, freight and agricultural inputs

Rome – Global food trade has accelerated and will hit an all-time record in both volume and value, according to a new report released today by the Food and Agriculture Organization of the United Nations (FAO).

While the global food trade has shown “remarkable resilience to disruption during the COVID-19 pandemic,” the r -idly rising prices of food and energy pose significant challenges for poorer countries and consumers who spend a large part of their income on these basic needs, says the FAO in its new Food Outlook.

The FAO expects global food imports to hit an all-time high in 2021, exceeding $ 1.75 trillion, up 14 percent year over year and 12 percent more than earlier projections in June 2021. The increase is being driven by higher price levels for internationally traded food and a tripling of freight costs.

Developing regions account for 40 percent of the total, and their total food import bill is expected to increase 20 percent compared to 2020. For countries with low income deficits, even faster growth is expected due to higher costs than higher food imports.

Developing regions are faced with sharp increases in the price of st -le foods such as grain, animal fats, vegetable oils and oilseeds, while high-quality foods such as fruits and vegetables, fishery products and beverages account for the majority of price increases in developed regions.

Published twice a year, Food Outlook provides FAO reports on market supply and demand trends for the world’s major foods, including grains, vegetable oils, sugar, meat and dairy products, and fish. It also looks at trends in the futures markets and shipping costs for groceries.

Takeaways

The global production outlook for major grains remains robust, with record crops expected for corn and rice in 2021, although the use of grain for human consumption and animal feed is expected to grow faster.

After a tight balance in 2020/21, preliminary forecasts for the 2021/22 season indicate an improvement in the overall supply situation for oilseeds and derived products, but their respective end-season stocks could remain below average.

World sugar production is forecast to recover in 2021/22 after three years of decline, but still lag behind global consumption. World trade in sugar is expected to decline slightly due to lower availability in important export countries and rising prices.

World meat production is forecast to increase in 2021, mainly triggered by a r -id recovery in production in China, particularly pork. Remarkable demand-related production expansions are expected in all major production regions with the exception of Oceania. A slowdown in growth in global meat trade is likely due to expected declines in imports in leading import regions, particularly Asia and Europe.

Global milk production is forecast to increase in 2021, with increases expected in all major production regions, led by Asia and North America. Global dairy trade is also expected to increase given the ongoing economic recovery from the market disruption caused by COVID-19. In recent months, however, the import growth rate has slowed due to rising domestic production and sluggish consumer demand.

Fisheries and aquaculture production in 2021 is projected to grow 2.0 percent from 2020 levels, suggesting that the new market momentum due to the pandemic that has hit this sector is likely to persist in the long term. The fish trade is recovering despite high freight costs and logistical delays.

Financial instruments such as futures and options related to major agricultural and food commodities have failed to “attract the speculative buzz that has been sh -ed by other high-priced years,” the report notes.

Special ch -ter on agricultural input prices

FAO experts have created a Global Input Price Index (GIPI) to examine the effects of r -idly increasing input prices, especially of fossil fuel energy, on food prices, future price developments and their likely consequences for global food security.

The study shows that the GIPI – consisting of energy, fertilizer, pesticide, feed and seed prices – and the FAO Food Price Index (FFPI) – which records the internationally traded prices of the most important agricultural foods and is a 10-year period in August 2021 -Highly Achieved – have evolved synchronously since 2005, suggesting that higher input costs can easily lead to higher food prices.

In the year ending in August 2021, the FFPI increased by 34 percent and the GIPI increased by a total of 25 percent compared to the same period in 2020.

It has been found that aggregated global measures hide large regional and sectoral differences within agriculture. Soybean producers, for example, have less need for what is currently expensive nitrogen fertilizer, so they should benefit from higher product prices. Pig producers, on the other hand, are faced with high feed costs and low meat prices, which reduces margins.

The analysis provides information about possible loads. Sub-Saharan Africa, for example, is dependent on nitrogen imports for around 70 percent, the price of which is driven by fossil fuels.

It also points to a growing number of countries – now 53 – where households spend more than 60 percent of their income on essentials such as food, fuel, water and housing. The FAO warns that rising food and fuel prices can have highly regressive effects on poor consumers and calls for particular “vigilance” in this regard.

Contact

FAO news and media
(+39) 06 570 53625
[email protected]

Christopher Emsden
FAO News and Media (Rome)
(+39) 06 570 53291 [email protected]

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