With record harvests, world’s food import bill expected to fall 11 per cent – UN agency

With prices for most of the internationally-traded agricultural commodities, especially for the staple grains remaining relatively ‘low and stable,’ it is expected the global food import prices will fall to a six-year low, the United Nations agricultural agency said today.

“Record global production forecasts for this year's wheat and rice harvests, along with rebounding maize output, are helping keep inventories ample and prices low,” said the UN Food and Agricultural Organization (FAO) in a news release today.

The agency noted that the value of total food imports is expected to fall 11 per cent (in U.S. dollar terms) in 2016 to 1.168 trillion, as lower bills for livestock products and cereal-based foodstuffs more than offset higher bills for fish, fruit and vegetables, oils and sugar.

“However,” the UN agency added: “the decline is expected to be slower for economically more vulnerable nations, many of which have depreciating local currencies.”

Referring to its updated Food Outlook, which focuses on developments affecting global food and feed markets, FAO also highlighted that worldwide cereal production in 2016 should rise 2,569 million tonnes, up 1.5 per cent from the previous year and enough to further boost existing inventories.

The agency also raised its forecast for global wheat production to 742.4 million tonnes on the back of increased yields in India, the United States and Russia.

Similarly, the global output of rice is also expected to increase 1.3 per cent, the first such rise in three years, to an all-time high of 497.8 million tonnes. This increase has been attributed to abundant monsoon rains in Asia and substantial increases in Africa. Outputs have also increased for coarse grain (1.8 per cent) and cassava (2.6 per cent).

Increased yields are also anticipated for soybeans and other oil crops and these could reach an all-time production high this year, FAO noted.

Additionally, while global fish production is also anticipated to expand 1.8 per cent (to 174 million tonnes), wild-caught fish yields are expected to decline by 0.9 per cent, due in part to El Niño impact on Pacific sardines, anchovetas and squid.

FAO also reported that unchanged world meat output in 2016, paired with rising international demand for pig-meat and poultry, especially from east Asian markets, continues to lend support to meat prices.

Also announcing its updated Food Price Index, the agency noted that the Index averaged 170.9 points in September, up 2.9 per cent from August and 10 percent from a year earlier.

The increase was driven by a 13.8 per cent monthly jump in the agency’s Dairy Price Index, partly as a result of a sharp jump in butter prices benefiting exporters in the European Union, where dairy output is declining.

The Sugar Price Index and Vegetable Oil Price Index also rose 6.7 per cent and 2.9 per cent, respectively, in September, while the Meat Price Index remained unchanged, as compared to August.

The agency’s Cereal Price Index, meanwhile, slipped 1.9 percent from the previous month and is 8.9 percent below its year-earlier level.