FAO Food Outlook: Global output set for expansion, but declining imports by the most vulnerable countries are a cause for concern

Rome - The world food import bill is forecast to reach a new record this year, though it is 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, according to a report released today by the Food and Agriculture Organization of the United Nations (FAO). 

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

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

“The decline in food import volumes is a concerning development in both groups, suggesting a decline in purchasing capacity,” the biannual report from FAO’s Markets and Trade Division warns. “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 agrifood 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 percent between April 2022 and September 2022, but by only 4.8 percent on average when calculated in real local currencies of NFIDCs. 

That underscores the importance of well-tailored interventions to combat inflation, said FAO Senior Economist El Mamoun Amrouk, author of the chapter. Otherwise, he warned, “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.”

Extensive statistical details are presented in the report.