FAO announce trillion dollar food bill
ROME- International food import bills could pass the one trillion dollar mark in 2010 with prices in most commodities up sharply from 2009, FAO said today.
In the latest edition of its Food Outlook report, the agency also issued a warning to the international community to prepare for harder times ahead unless production of major food crops increases significantly in 2011.
Food import bills for the world’s poorest countries are predicted to rise 11 percent in 2010 and by 20 percent for low-income food-deficit countries.
This means, by passing a trillion dollars, the global import food bill will likely rise to a level not seen since food prices peaked at record levels in 2008.
“With the pressure on world prices of most commodities not abating, the international community must remain vigilant against further supply shocks in 2011 and be prepared,” FAO said.
“Given the expectation of falling global inventories, the size of next year’s crops will be critical in setting the tone for stability in international markets,” FAO said. “For major cereals, production must expand substantially to meet utilization”
“Cereals however may not be the only crops farmers will be trying to produce more of, as rising prices have also made other commodities attractive to grow, from soybeans to sugar and cotton.
This could limit individual crop production responses, meaning that consumers may have little choice but to pay higher prices for their food,” FAO warned.
Price increases, seen for 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 of the exporting countries, and fluctuations in currency markets.
Sugar was an important reason for the rise in the price of the global food basket in recent months. According to FAO, sugar prices, which recently surpassed 30-year highs, remain elevated and extremely volatile.