Global Food Bill to Hit Record $1.98tn in 2023

The world food import bill is forecast to reach a new record of $1 98 trillion this year.

World food import was predicted to grow at a much slower pace compared to last year, as rising world prices, driven by higher quotations for fruits, vegetables, sugar and dairy products, dampen demand, especially in the most economically vulnerable countries, a new released by the United Nations Food and Agriculture Organisation (FAO).

According to FAO’s Food Outlook estimates, the global food bill would rise to $1.98 trillion in 2023, up by 1.5 per cent from 2022. It rose by 11 per cent in 2022 and 18 per cent in 2021.

While food imports by advanced economies continued to expand, the import bill for the group of Least Developed Countries (LDCs) was predicted to decline by 1.5 per cent this year and that for net food-importing developing countries (NFIDCs) to decline by 4.9 per cent.

The top five African importers accounted for 50 per cent of Africa’s total food imports. They included Egypt (15 per cent); Algeria (12 per cent); South Africa (9 per cent); Morocco (7 per cent) and Nigeria (7 per cent).

Main sources of imports included the emerging markets of Brazil and India at the top, with several EU countries also featuring in the top 20 suppliers.

The FAO biannual report released from FAO’s Markets and Trade Division warned: “The decline in food import volumes is a concerning development in both groups, suggesting a decline in purchasing capacity.

“These concerns are amplified by the fact that lower international prices for a number of primary food items have not, or at least not fully, translated into lower prices at the domestic retail level, suggesting that cost-of-living pressures could persist in 2023.”

The new edition of Food Outlook has a special chapter examining recent changes in the food component of the consumer price index for NFIDCs, and how currency movements, especially in relation to the US dollar in which most agri-food trade is invoiced, impact food price inflation in these countries.

While the US dollar’s depreciation during the 2007-08 global food crisis helped food importers offset the increase in food prices, the reverse effect has marked recent years.

For example, world maize prices declined by 10.2 per cent between April 2022 and September 2022, but by only 4.8 per cent on average when calculated in real local currencies of NFIDCs.

That underscored the importance of well-tailored interventions to combat inflation, FAO Senior Economist El Mamoun Amrouk, author of the chapter stated.

Otherwise, Amrouk warned that, “rising food prices can lead to social unrest and increased financial challenges, undermining efforts to fight poverty and food insecurity and wiping out any progress achieved so far.”

FAO’s latest release of the Food Outlook, containing forecasts of the production, trade, utilisation and stock levels across the world’s major basic foodstuffs, pointed to likely increases in production across most categories, including rice, coarse grains, oil crops, milk, sugar, meat and fish and fishery products.

However, global wheat output could fall from last season’s all-time high.

Notwithstanding this generally positive outlook, the global agrifood production systems remained vulnerable to shocks, stemming from extreme weather events, geopolitical tensions, policy changes and developments in other commodity markets, with the potential to tip the delicate demand-supply balances and impact prices and world food security.

Global production of coarse grains was forecasted to rise by three per cent to 1,513 million tonnes, a new record, buoyed by an expected significant increase in maize output in the United States of America and a record harvest in Brazil, leading to higher overall supplies and lower prices.

World rice production was also forecasted to rise by 1.3 per cent in 2023/24, to 523.5 million tonnes, while international trade was expected to drop by 4.3 per cent in volume terms to 53.6 million tonnes.

The anticipated output increase mostly reflects positive incentives provided by generally higher producer prices, easing fertilizer costs and continuing government assistance measures.

By contrast, world wheat production in 2023 was expected to decline by three per cent from its all-time high of 777 million tonnes in 2022, due mainly to expected decreases in the Russian Federation and Australia, both of which registered record outputs last year. The declines mostly reflected the likely impacts of extreme weather events, seen leading to lower planted areas.

Global outputs of oil crops, milk and sugar were all expected to expand, as is that for meat, although pig and bovine meat volumes could drop slightly in 2023.

Global production of aquatic animals is also expected to grow in 2023, although that is due to an anticipated increase in aquaculture production as capture fisheries are seen contracting.

Ndubuisi Francis in Abuja

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