The food import bill of the global community could surpass the $1 trillion mark in 2010, with prices of most commodities going up sharply compared to the previous year, the Food and Agriculture Organisation has said.
In the latest edition of its ‘Food Outlook’ report, the U.N. agency asked the world community to be prepared for harder times ahead unless production of major food crops increases significantly in 2011.
The food import bills of the world’s poorest countries are predicted to rise by 11 per cent in 2010, the U.N. body said, adding that low-income, food-deficit countries would witness a 20 per cent jump in their food import bills.
By crossing the $1 trillion mark, the world food import bill this year will be higher than the peak achieved in 2008.
In its report, the FAO said that contrary to earlier predictions, world cereal production is now forecast to contract by 2 per cent in June, in contrast to its earlier prediction of 1.2 per cent expansion during the month. Unexpected supply shortfalls due to unfavourable weather events are responsible for the revision, the statement added.
Global cereal stocks are forecast to decline sharply and the FAO made a strong call for production to be stepped up to replenish inventories. World cereals stocks are anticipated to shrink by 7 per cent according to FAO, with barley reserves plunging by 35 per cent, maize by 12 per cent and wheat by 10 per cent. Only rice reserves are forecast to increase by 6 per cent, according to the report.
Sugar was an important factor contributing to the rise in the price of the global food basket in recent months.
According to the FAO, sugar prices, which recently surged to new 30-year highs, remain elevated and extremely volatile.
The price increases seen by most agricultural commodities over the past six months are the result of a combination of factors, especially unexpected supply shortfalls due to unfavourable weather events, policy responses by some exporting countries and fluctuation in currency markets, the report said.
International prices could rise even more if production does not increase significantly next year, especially of maize, soybean and wheat, it added.