National food imports to hit $1.3 trillion in 2011 – FAO

The global cost of national food imports is expected to approach $1.3 trillion this year, the United Nations Food and Agriculture Organisation (FAO) says November 3, 2011.

According to the FAO high food prices are putting pressure on least developed countries (LDCs).

“High food prices are putting pressure on least developed countries (LDCs) who have seen their food import bill soar by almost a third from last year…the global cost of national food imports is expected to approach $1.3 trillion this year,” the FAO said in its Food Price Index report.

According to the FAO, world cereal inventories are forecast to increase by 3.3% from their reduced opening levels, to 507 million tonnes by the end of seasons in 2012. “At this level, the world cereal stocks-to-use ratio for 2011/12 is expected to approach 22 percent, up only slightly from 2010/11.”

The monthly food index, the UN agency said dropped to an 11-month low in October, declining 4%, or nine points, to 216 points from September 2011 but prices still remain generally higher than last year and very volatile.

An improved supply outlook for a number of commodities and uncertainty about global economic prospects, the FAO says is putting downward pressure on international prices, although to some extent this has been offset by strong underlying demand in emerging countries where economic growth remains robust.

“The drop was triggered by sharp declines in international prices of cereals, oils, sugar and dairy products. Meat prices declined the least,” it said but “prices last month (October) were still some 5% above the corresponding period last year.”

Most agricultural commodity prices could thus remain below their recent highs in the months ahead, according to the FAO’s biannual Food Outlook report also published November 3, 2011.

“Food outlook prices generally remain extremely volatile, moving in tandem with unstable financial and equity markets. Fluctuations in exchange rates and uncertainties in energy markets are also contributing to sharp price swings in agricultural markets,” the FAO Grains Analyst, Abdolreza Abbassian says.

By Ekow Quandzie