In a new food outlook report, which examines drivers of rising prices of food commodities, freight and agricultural inputs, the Food and Agriculture Organisation of the United Nations (FAO) said global food trade has accelerated and poised to hit an all-time record in both volume and value terms.
According to the report which was released on Friday, the global food import bill will reach an all-time high in 2021 and surpass US$1.75 trillion, marking a 14 per cent increase from the previous year and 12 per cent higher than earlier forecast in June 2021.
It stated that the increase was driven by higher price levels of internationally traded food commodities and a threefold increase in freight costs.
“While global food trade has shown remarkable resilience to disruptions throughout the COVID-19 pandemic, rapidly rising prices of food commodities and energy pose significant challenges for poorer countries and consumers, who spend large shares of their incomes on these basic necessities,” said the report.
Issued twice a year, food outlook offers FAO’s reviews market supply and demand trends for the world’s major foodstuffs, including cereals, vegetable oils, sugar, meat and dairy and fish. It also looks at trends in futures markets and shipping costs for food commodities.
The report added that developing regions account for 40 percent of the total and their aggregate food import bill is expected to rise by 20 percent compared to 2020, as it envisaged that faster growth is expected for low-income food deficit countries , due to higher costs more than higher food import volumes.
It said developing regions are facing sharp increases in the prices of basic staples such as cereals, animal fats, vegetable oils and oilseeds, while high-value foods, such as fruits and vegetables, fishery products and beverages are driving the bulk of the increases for developed regions.
On insight into potential strains, FAO said Sub-Saharan Africa depends on imports of nitrogen, the price of which is driven by those of fossil fuels, for around 70 percent of supply.
FAO warned that rising food and fuel prices can have a highly regressive impact on poor consumers especially in the 53 countries where households spend more than 60 percent of their income on necessities such as food, fuel, water and housing and urged particular vigilance in this regard.