Poorest countries face growing burden from the cost of importing food

Food imports are placing an increasing burden on the world’s poorest countries, a new FAO report says.

The world food import bill has broadly tripled since 2000 to reach $1.43 trillion in 2017, while it has risen around fivefold for countries that are the most vulnerable to food shortages. This shows a trend that has “been deteriorating over time, portending an increasing challenge, especially for the poorest countries, to meet their basic food needs from international markets,” said Adam Prakash, a FAO economist and author of the study in the Food Outlook released on July 10.

The global food import bill is likely to rise by around 3 percent to about $1.47 trillion this year. The annual increase mostly reflects greater international trade in fish – a high-value food mostly imported by developed countries – and cereals, a staple that is an essential import for many Low-Income Food-Deficit Countries (LIFDCs).

This year FAO took a longer-term view of that trend and found that countries may indeed be “paying more for less food,” even though global production and trading conditions have been quite benign in recent years.

The analysis focuses on both the trend and the composition – animal proteins, fruits and vegetables, cereals, beverages, oilseeds and coffee, tea and spices – of food import bills over time. Food imports have risen at an annual global average rate of 8 percent since 2000, but that pace has been in the double-digits for the vast majority of the poorest countries. In a “stark contrast”, the share of cereals compared to higher-value foods in the import basket has not declined in poorer countries, while it has declined considerably in wealthier ones.

The food import bill now accounts for 28 percent of all merchandise export earnings for the group of least-developed countries (LDCs), nearly double the share of 2005. Developed nations not only have larger GDP per capita but also they typically only spend around 10 percent of their export earnings on food imports.

The big picture

The Food Outlook primarily reviews market trends for the world’s major food commodities, including cereals, fish, meat, dairy, sugar and vegetable oils.

While food markets have remained relatively stable thanks to generally good supply conditions across most categories, they remain vulnerable in light of recent rising trade disputes and the potential for weather and other shocks.

Original source: FAO
Published on 10 July 2018