Geneva Press Briefing: FAO forecasts the possibility of easing market conditions for major food commodities in 2022/23, but uncertainties remain
Boubaker Ben-Belhassen, FAO Director of Markets and Trade Division addressed the Geneva Press Corp on the newly launched FAO Food Outlook at the Biweekly Press Briefing organized by the United Nations Information Service (UNIS) in Geneva
Boubaker Ben-Belhassen said that, according to the latest Biannual Report on Global Food Markets, market conditions for major food commodities could ease somewhat in 2022-2023; that food import bills were expected to reach now record highs in 2022; and that import bills for agricultural inputs – energy, fertilizers, pesticides, and seeds – would also see a sharp increase.
While the markets of basic food stuffs could benefit from easing conditions, many factors – including conflicts, weather variability, bleak economic prospects, soaring agricultural input costs and sudden changes in trade policies – would continue to cause uncertainties to the stability of the global food markets. The expected easing was mainly due to a forecast growth in the globalproduction of several food commodities. World wheat production is expected to increase in 2022 and exceed utilization, leading to a build-up of stocks. For rice, while global production could drop this year due to unfavorable weather and hikes in input prices, supplies were forecast to remain abundant un 2022-2023 thanks to large opening stocks. The outputs of oilseeds and by-products are projected to recover from last year's decreased levels. Likewise, global milk and meat outputs are forecast to expand, though only moderately.
The global food import bill was expected to reach a new high in 2022, rising to nearly USD 2 trillion, up USD 180 billion from 2021, with the bulk of the increase driven by higher cost of imports rather than larger volumes. Economically vulnerable countries were finding it increasingly difficult to finance their food imports, which could in turn have serious consequences for food security. At the same time, the prices of agricultural inputs were augmenting in an alarming manner, with bills having increased by nearly 50 percent in 2022; higher prices of energy and fertilizers were the main factors (90 percent) explaining this increase.
According to the data on the Black Sea Grain Initiative, 10.2 million tons of grain and other food products had been exported from Ukraine from the beginning of the Initiative until 10 November, which had improved food availability globally; it could be complemented by other measures to improve food access in lower income countries, Ben-Belhassen noted.
Answering questions, Ben Belhassen added that FAO also monitored food and fertilizer exports from the Russian Federation. FAO also was looking into the effect of “excessive speculative behavior” on food prices. Experience from the 2007-2008 global food price crisis suggested that this impact would be transitory. Furthermore, he noted, present changes in prices could be explained by market fundamentals and the factors affecting demand and supply, as witnessed by the effect of the Black Sea Grain Initiative.
Responding to a question on the possible termination of that deal at the end of November, Ben-Belhassen explained that nobody would want to see that, given the serious implications it could have for world prices and availability. The impact would be immediately felt by countries that depend on imports from the Black Sea region, such as countries in the MENA region. The impact would also be felt in Ukraine, since the Initiative had allowed the farmers to sell their produce and earn income, and had also helped to free storage for the new cropse.
(Source: United Nations Information Service)
FAO Liaison Office in Geneva
Based in Geneva, a hub of international cooperation and multilateral diplomacy, FAO Liaison Office (LOG) promotes to the Geneva-based partners FAO’s contribution to the 2030 Agenda through its 2022-31 Strategic Framework. Moreover, the Liaison Office monitors and informs the Geneva-based deliberations to strategically position the Organization in line with its mandate and champion key thematic issues. As part of its liaison work, FAO in Geneva cooperates with the United Nations Information Service (UNIS) in Geneva to communicate and highlight the role of food and agriculture in achieving the Sustainable Development Goals (SDGs).
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UNIS Geneva Press briefing: 11 November 2022