“These are alarming signs from a food security perspective and show that it is difficult for importers to finance rising international costs, which could anticipate their resilience to rising prices,” the report notes.
“Given the sharp rise in input prices, concerns about the weather and increased market uncertainty due to the war in Ukraine, the latest FAO forecasts are likely to point to a tightening food market and a new record rise in food import bills,” said the FAO economist. Upali Galketi AratchilageEditor-in-Chief of Food Outlook.
The FAO has proposed a financial instrument for food imports to provide balance of payments support to low-income countries that are most dependent on food imports as part of a strategy to ensure food security.
Animal fats and vegetable oils are the single largest factor in the expected increase in import bills in 2022, although cereals are not far behind developed countries. As a whole, developing countries are reducing imports of cereals, oilseeds and meat, reflecting their inability to absorb rising prices.
The bi-annual Food Outlook provides FAO reviews of trends in demand and supply for the world’s major food products, including cereals, oilseeds, sugar, meat, and dairy and fish products. It also looks at futures market developments and the cost of delivering food commodities.
According to the report, world production of key cereals is expected to decline in 2022 for the first time in four years, and global consumption is also seen to decline, for the first time in 20 years. However, the use of cereals in direct human consumption is not expected to be affected, as the decline in overall consumption is expected to be due to reduced feed consumption of wheat, coarse grains and rice.
World wheat inventories are expected to grow slightly this year, mainly due to the expected increase in inventories in China, the Russian Federation and Ukraine. In addition, world corn production and consumption is projected to reach new records related to increased ethanol production in Brazil and the United States and industrial starch production in China.
According to the report, global consumption of vegetable oils is forecast to exceed production, although demand regulation is expected.
Although meat production is expected to decline in Argentina, the European Union and the United States, world production is projected to grow by 1.4%, driven by an projected 8% increase in Chinese pork production. exceeds the level before the dramatic spread of the African swine fever virus in 2018.
World milk production is forecast to grow at a slower pace than in previous years, constrained by dairy herd numbers and lower profit margins in several key production areas, while trade may contract from a high level in 2021, the report added.
It further said that world sugar production is expected to grow after a three-year decline due to growth in India, Thailand and the European Union.
Source: The Nordic Page