In parallel with this increase, the global import bill for agricultural inputs, particularly fertilizers, is expected to increase by 48% compared to 2021.
Global spending on food imports is expected to reach $1.94 trillion in 2022, a 10% jump from the previous year, due to rising prices, the FAO warned on Friday. Alongside this surge in food spending, the global import bill for agricultural inputs, including fertilizers, is expected to increase by 48% compared to 2021, warns the Food and Agriculture Organization of the United Nations, which is concerned for fragile countries already plagued by food insecurity.
In its bi-annual report on theFood Outlook», the FAO warns that the consequence will be dramatic for poor importing countries, which will pay more for less. Because if “most of the increase in the bill is attributable to high-income countries“, the latter will also see the volumes purchased increase, unlike economically vulnerable countries such as Madagascar, Liberia or Lebanon. “The overall food import bill for the group of low-income countries is expected to remain virtually unchanged, although it is expected to decline by 10% in volume“, underlines the FAO.
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Sub-Saharan Africa, already hard hit by malnutrition, is expected to spend 4.8 billion more on food imports, despite lower volumes. The “growing problem of accessibility for these countries“could announce”the end of their resistance to the rise in international prices“, warns the FAO.
Easing the “burden” of imports
The general rise in the food bill, aggravated for importing countries by the depreciation of their currencies against the dollar, the main currency of exchange on international markets, is directly linked to the war in Ukraine – after an initial period of rise attributable to the post-Covid economic recovery. The conflict, involving two agricultural superpowers that accounted for 30% of the world’s wheat trade and 78% of sunflower oil exports before Russia’s invasion of Ukraine, has propelled cereals to unprecedented prices. However, more than thirty countries, net importers of wheat, are dependent on the two countries (Russia and Ukraine) for at least 30% of their imports.
The opening of a secure maritime corridor has enabled more than 10 million tonnes of agricultural products to leave Ukraine since August 1, leading to a cautious decline in prices on the markets. Another factor of relaxation, the world production of wheat “expected to reach a record high of 784 million tonnes in 2022/23», driven in particular by the Russian and Canadian harvests. But other elements weigh heavily in the balance of poor importing countries, warns the FAO: the world bill for imports of agricultural inputs, in particular fertilizers, should reach this year “$424 billion, up 48% from 2021“. In question: the soaring cost of gas and nitrogen fertilizers, of which Russia was the world’s leading exporter and which saw their prices triple in one year.
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“As a result, some countries may be forced to reduce input applications, which would almost inevitably lead to lower agricultural productivity and national food availability.“, underlines the FAO. The UN organization, which sees the “negative impacts on global agricultural production and food security extend into 2023», has been pleading for months for the establishment of a financing facility mechanism for countries highly dependent on imports. The report hails as “an important and welcome step to alleviate the burden of imported food expenses» the announcement at the end of September by the International Monetary Fund (IMF) of the launch of afood shocks», open for one year for low-income countries, providing rapid access to emergency financing or in the event of a sudden rise in prices.
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