Global Food Import Bill to Reach Record High of $1.98 Trillion in 2023
The global food import bill is expected to reach a record high of $1.98 trillion in 2023, according to the latest biannual report from the Food and Agriculture Organization (FAO) of the United Nations. This represents a 1.5 percent increase from 2022, due to a combination of factors including higher international prices and higher volumes. The anticipated increase in the 2023 bills will be due to an additional $18.4 billion stemming from higher international prices and $12.9 billion from higher volumes.
Slow Growth in Global Food Import Bill
Despite this surge, the UN body predicts that the world food import bill will grow at a much slower pace compared to last year as demand diminishes. The global food bill jumped by 11 percent back in 2022 and by a significant 18 percent in 2021. The low demand this year is mainly attributed to the global hike in prices which is primarily driven by higher quotations for fruits, vegetables, sugar and dairy products.
Impact on Economically Vulnerable Countries
While food imports by advanced economies continue to expand, the import bill for the least developed countries is projected to decline by 1.5 percent this year. With regard to the import bill for the net food-importing developing countries, it will decline by an estimated 4.9 percent. The decline in food import volumes is a concerning development in both groups, suggesting a decline in purchasing capacity.
Concerns Over Cost-of-Living Pressures
The FAO report warned that lower international prices for a number of primary food items have not fully translated into lower prices at the domestic retail level, suggesting that cost-of-living pressures could persist in 2023. Rising food prices can lead to social unrest and increased financial challenges, and well-tailored interventions are crucial to combat inflation.
Forecasts for Global Production, Trade Utilization, and Stock Levels
Latest forecasts of the production, trade utilization, and stock levels on a global level across major basic foodstuffs suggest a rise in production across most categories including rice, coarse grains, and oil crops. While the production of milk, sugar, meat, and fish is also forecast to increase, the global wheat output is projected to drop. Nevertheless, the global agricultural food production systems remain vulnerable to shocks such as severe weather turbulence, geopolitical tensions, policy changes, and developments in other commodity markets.
Potential Impact on Prices and World Food Security
These shocks could potentially alter demand and supply balances while impacting prices as well as world food security. The FAO report highlights the need for well-tailored interventions to combat inflation and ensure that cost-of-living pressures do not persist in 2023. Rising food prices can lead to social unrest and increased financial challenges, making it crucial for policymakers to take action to address this issue.