Rome, Italy
May 22, 2008
High food prices have particularly
hit vulnerable populations in many countries that spend a
substantial part of their income on food, according to a report
released today by the UN Food and
Agriculture Organization (FAO).
The latest Food Outlook indicates that the food import bill of
the Low Income Food Deficit Countries (LIFDCs) is expected to
reach US$169 billion in 2008, 40 percent more than in 2007. FAO
calls the sustained rise in imported food expenditures for
vulnerable country groups “a worrying development,” and says
that by the end of 2008 their annual food import basket could
cost four times as much as it did in 2000.
International prices of most agricultural commodities have
started to decline, but they are unlikely to return to the low
price levels of previous years, Food Outlook reports. The FAO
food price index has remained stable since February 2008, but
the average of the first four months of 2008 is still 53 percent
higher when compared to the same period a year ago.
Hunger likely to worsen
“Food is no longer the cheap commodity that it once was. Rising
food prices are bound to worsen the already unacceptable level
of food deprivation suffered by 854 million people,” said FAO
Assistant Director-General Hafez Ghanem . “We are facing the
risk that the number of hungry will increase by many more
millions of people.”
Despite a favourable global production outlook, the expected
price decline in many basic agricultural commodities during the
new 2008/2009 season is likely to be limited, because of the
need to replenish stocks and an increase in utilization. Due to
rising utilization, more than one good season is required to
replenish stocks and reduce price volatility.
Record output expected in 2008 world cereal production
FAO’s latest forecast for world cereal production in 2008 points
to a record output, now at nearly 2192 million tonnes, including
milled rice, up 3.8 percent from 2007. Among major cereals, the
tight wheat supply is likely to improve most, given the
prospects for better harvests in 2008. Despite record production
levels in several crops, tight markets will probably lead to
continued price volatility during the season.
Heads of State and Government will address the problem of high
food prices and the challenges of climate change, bioenergy and
food security at the upcoming June summit in Rome (3-5 June
2008).
Other Commodity Highlights:
Oils and oilseeds
The rise in international prices of oilseeds and oilseed
products has accelerated in 2007/08, with values climbing to new
record levels in March 2008. World markets have tightened
considerably as reduced supply growth for oils and a drop in
meal supplies are coinciding with further expansion in demand.
First forecasts for the 2008/09 season point towards a strong
recovery in global oilseed production, and the resulting oil and
meal output should be sufficient to meet global demand.
Sugar
Generally favourable growing conditions led to a record world
sugar production in 2007/08 and although world sugar consumption
is foreseen to increase at a sustained rate, it will not be
enough to absorb an expected second consecutive global supply
surplus. International sugar prices are likely to remain under
downward pressure.
Meat
Global meat output is expected to grow in 2008 despite high feed
prices. Strong economic growth is expected to sustain steadfast
consumption in many developing countries.
Dairy
Global milk production, which is responding to the past year’s
high milk product prices, is forecast to grow strongly in 2008.
However, there is uncertainty as to where dairy markets will
head. Global trade in milk products is anticipated to fall again
in 2008 mainly because of reduced exportable supplies. Import
demand seems to have faltered because of high dairy product
prices due to strong increases in milk output among several
importing countries.
Fisheries
Food Outlook forecasts that aquaculture production growth will
continue this year with the historic milestone of reaching the
same level as the expected capture fisheries in 2008. Prices for
wild species from capture fisheries are moving upwards strongly
but the price increase for farmed species are expected to be
more moderate.
The potato
Worldwide potato production could expand over the next decade
between 2 and 3 percent annually – with developing countries,
especially those situated in Sub Saharan Africa, being the main
engine of growth. In China, the world's biggest potato producer,
authorities are reviewing proposals for the potato to become one
of the country’s major food crops, while India is considering
plans to double potato output in the next five to ten years. |
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