RIYADH: The Food and Agriculture Organization (FAO) of the United Nations has forecasted that the global food import bill will hit a record high of $1.98 trillion in 2023, marking a 1.5 percent increase from the previous year. The rise can be attributed to a combination of factors, including higher international prices and increased volumes, according to the latest biannual report by the FAO.
The anticipated surge in the food import bill for 2023 is estimated to be driven by an additional $18.4 billion resulting from higher international prices and $12.9 billion from increased volumes. However, despite this upward trend, the FAO predicts a slower growth rate compared to previous years due to declining demand.
The global food bill experienced an 11 percent increase in 2022 and a significant 18 percent rise in 2021, as stated in the FAO report. This year, low demand, particularly in economically vulnerable countries, can be attributed to the elevated global prices of fruits, vegetables, sugar, and dairy products.
While advanced economies continue to witness an expansion in food imports, the report highlights a projected decline of 1.5 percent in the import bill for the least developed countries. Additionally, net food-importing developing countries are expected to see a decline of around 4.9 percent in their import bills.
FAO Report Raises Concerns About Decline in Food Import Volumes
The FAO report raises concerns about the decline in food import volumes for both groups, suggesting a decrease in purchasing capacity. It also emphasizes that lower international prices for primary food items have not translated into equivalent decreases at the domestic retail level, potentially resulting in persistent cost-of-living pressures in 2023.
FAO Senior Economist El-Mamoun Amrouk warns about the potential consequences of rising food prices, including social unrest and increased financial challenges. He emphasizes the need for targeted interventions to combat inflation effectively.
The report indicates an increase in global production across most categories of basic foodstuffs such as rice, coarse grains, and oil crops. Milk, sugar, meat, and fish production are also projected to rise, although global wheat output is expected to decrease.
However, the report highlights that global agricultural food production systems remain vulnerable to various shocks, including severe weather events, geopolitical tensions, policy changes, and developments in other commodity markets. Such factors could alter demand and supply balances, impacting prices and world food security.
