FAO warns that with inflation and the war in Ukraine, food imports will increase by 10% in 2022.
The Food and Agriculture Organization of the United Nations (FAO) warns of the food import bill on Friday, November 11: it should be 10% higher in 2022 than in 2021 on average. In parallel with the increase in food costs, the global bill for the import of agricultural products, especially fertilizers, is expected to increase by 48% compared to 2021, the FAO warns, worrying about fragile countries already suffering from food insecurity. FAO warns in its biennial Food Outlook report that the consequences will be dramatic for poorer importing countries, who will pay more for less. Because “most of the increase in the bill goes to high-income countries,” the latter would see volumes purchased, unlike economically weaker countries such as Madagascar, Liberia or Lebanon.
“The total food import bill for the low-income group is expected to decrease by 10% in volume, but is expected to remain virtually unchanged,” FAO said. Sub-Saharan Africa, already hit hard by malnutrition, is expected to spend $4.8 billion more on food imports despite lower volumes. The FAO warns that the “increasing affordability problem for these countries” could herald the end of their “resistance to rising international prices”. The overall increase in the food bill, aggravated by the depreciation of the currencies of importing countries against the dollar, the main currency of exchange in international markets, is directly related to the war in Ukraine – this is the recovery of the post-Covid economy after an initial period of upswing.
More than 30 countries depend on Russia and Ukraine for at least 30% of their imports
The conflict between the two agricultural superpowers, which before Russia’s invasion of Ukraine accounted for 30% of world wheat trade and 78% of sunflower oil exports, has sent the cereal to unprecedented prices. However, more than thirty countries that are net importers of wheat depend on two countries (Russia and Ukraine) for at least 30% of their imports. The opening of the safe sea corridor has allowed more than 10 million tons of agricultural products to leave Ukraine since August 1, prompting a cautious drop in market prices.
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World wheat production “should reach a record level of 784 million tons in 2022/23” due to another rest factor, especially Russian and Canadian products. But other elements weigh heavily on the balance of poor importing countries, the FAO warns: the global import bill for agricultural products, particularly fertilizers, this year “should reach $424 billion, a 48% increase over 2021.” Question: Rising prices of gas and nitrogen fertilizers, of which Russia is the world’s leading exporter, and whose prices have tripled in a year.
“As a result, some countries may be forced to reduce their input programs, which will almost inevitably lead to reduced agricultural productivity and national food availability,” FAO said. Noting that “the negative effects on global agricultural production and food security will continue until 2023,” the UN organization has been advocating for months the creation of a financing mechanism for countries that are heavily dependent on imports. In the report, the International Monetary Fund (IMF) launched a one-year “food shock” window at the end of September as “an important and welcomed step in easing the burden of imported food costs.” Low-income states provide quick access to emergency financing or in the event of a sudden rise in prices.
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