Countries to pay more for less as global food import bill set for record $1.81trn in 2022

BY GRACE AIRHULE

Countries of the world will spend more importing food in 2022 but the additional spending will not buy them more food, the Food and Agricultural Organization of the United Nations (FAO) said in its latest food outlook report released Thursday.

The UN agency said global food import bill is on course to hit a new high of $1.81 trillion in 2022, an additional $51 billion, or nearly 3 percent, higher than the all-time high set last year.

The expected increase will be driven mainly by higher prices and transport costs rather than volumes, FAO said. This means that though countries will spend more, they will not buy more food as inflation worsens a cost-of-living crisis in developed nations and deepens hunger in poorer countries.

“Countries are expected to spend a staggering $1.8 trillion importing food they need this year; this would be a new world record but worryingly, it’s going to buy them less food, not more,” FAO said.

The report said this year’s “bigger-than-ever global food import bill” will also be driven by higher fixed costs for farmers of so-called “agricultural inputs”, such as fertiliser and fuel.

The single biggest contributor to higher import bills, it said, would be animal fats and vegetable oils. Cereals would also contribute to the import bills of developed countries.

“Developing countries, as a whole, are reducing imports of cereals, oilseeds and meat, which reflects their incapacity to cover the increase in prices,” FAO said.

Though countries will spend more buying food this year, least developed countries would have little option but to spend $2.4 billion less importing food, the report showed.

Sub-Saharan African countries and other nations that buy more food than they export are likely to face an increase in costs, for which they would get lower amounts of essential foodstuffs.

“These are alarming signs from a food security perspective, indicating that importers will find it difficult to finance rising international costs,” FAO warned.

“The year 2022 may usher in an era of lower resilience to higher food prices, notably by the poorer regions of the developing world,” it said.

Commenting on the report, Upali Aratchilage, FAO economist, said, “In view of the soaring input prices, concerns about the weather, and increased market uncertainties stemming from the war in Ukraine, FAO’s latest forecasts point to a likely tightening of food markets and food import bills reaching a new record high.”

To help avert even greater food insecurity among low-income nations and to guarantee food imports, FAO recommended the creation of a balance-of-payment support mechanism.