Food-import bills could pass $1 trillion in 2010
November 17, 2010
by Bryan Salvage
ROME – Considering prices of most commodities are up sharply compared to 2009, international food import bills could pass the $1 trillion dollar mark in 2010, according to the Food and Agriculture Organization of the United nations (FAO). The agency also warned in the latest edition of its Food Outlook report that the international community should prepare for harder times unless production of major food crops increases significantly in 2011.
In 2010, food-import bills for the world’s poorest countries are predicted to increase 11% and by 20% for low-income, food-deficit countries. By passing $1 trillion, the global import food bill will likely increase to a level not seen since food prices peaked at record levels in 2008.
World cereal production, contrary to earlier predictions, is now forecast to contract by 2% rather than to expand by 1.2% as anticipated in June. Unexpected supply shortfalls due to unfavorable weather events were responsible for this change in direction, according to the study.
Price increases, seen for most agricultural commodities over the past six months, are the result of unexpected supply shortfalls due to unfavorable weather events, policy responses by some of the exporting countries and fluctuations in currency markets. International prices could rise even more if production next year does not increase significantly – especially in maize, soybean, and wheat, FAO said.
FAO relays that sugar prices, which recently surpassed 30-year highs, remain elevated and extremely volatile. In the oilseeds sector, firm prices reflect relatively slow growth in world production failing to keep pace with fast expanding demand.
Meat prices have risen, but so far the increase has been far more contained. However, in the dairy sector butter has already hit an all-time high.
Fish prices have also increased greatly, showing a strong recovery after sharp falls since the end of 2008. This is primary due to aquaculture producers responding to low prices by cutting stocks, which affected production.