The global food import bill will exceed $2 trillion by 2024, driven by the rising cost of everyone’s favorite hot beverages, according to the latest Food Outlook report released Thursday by the United Nations Agriculture and Food Organization. Food (FAO). The biannual report, which focuses on developments affecting global food and feed markets, highlights that higher costs for cocoa, coffee and tea are driving the increase, while disparities in import bills persist. between different income levels.
Cocoa prices have soared to almost four times their ten-year average earlier this year, coffee prices have almost doubled, and tea prices are 15% above long-term levels.
Together, these commodities are responsible for more than half of the projected increase in global food import expenditures, which FAO economists predict will increase by almost 23% in 2024.
National disparities
While high-income countries, which account for two-thirds of the global food import bill, will see a 4.4% increase, import expenditures for low- and middle-income countries are expected to decline.
Lower-income countries may find some relief in reduced costs of cereals and oilseeds, although their per capita intake of wheat and coarse grains is expected to decline, contrasting with a projected increase of 1.5 % in rice consumption.
FAO highlights the crucial role that food exports play in sustaining many economies.
For example, revenue from coffee exports covers almost 40% of food import costs in Burundi and Ethiopia, while Ivory Coast’s cocoa exports fully offset its food import bill. Similarly, tea exports account for more than half of Sri Lanka’s import costs.
Olive oil flows after being pressed
Mixed forecasts
FAO forecasts reveal a mixed outlook for global food production and trade.
Production of wheat and coarse grains is expected to decline but remain above consumption levels, while rice production is set for a record harvest in 2024/25, which could allow for an increase in global consumption of rice, reserves and international trade.
Meat and dairy production is expected to grow modestly, while global fisheries production will increase by 2.2%, driven by aquaculture.
Meanwhile, consumption of vegetable oils could exceed production for the second consecutive season, causing a reduction in reserves.
The report warns that extreme weather conditions, geopolitical tensions and political changes could destabilize production systems, further endangering global food security.
Olive oil prices soar with climate stress
The report focuses especially on olive oil and details price increases due to weather-related production declines.
In Spain, wholesale prices for cold-pressed extra virgin olive oil reached almost $10,000 per ton in January 2024, almost triple that of 2022.
High temperatures, which force olive trees to conserve water for basic functions instead of producing fruit, caused a production cut of almost 50% for two consecutive years.
Although the next Spanish harvest is expected to exceed the average of the last 10 years, high prices may limit global consumption.
Producers should consider more sustainable water and soil management practices, the report says.
Given the huge expansion potential of olive oil exports, governments could offer support to olive growers, such as insurance schemes and measures to control the spread of diseases, said Di Yang, an FAO economist.
Cheaper fertilizers…mostly
The report also highlights a 50% drop in fertilizer prices from their peak in 2022, thanks to falling natural gas prices and lower trade barriers.
FAO economist Maria Antip noted, however, that phosphate fertilizers have resisted this trend, with existing trade barriers and geopolitical tensions posing a risk to future supplies, particularly in Latin America and Asia. .
Furthermore, the report highlights the potential of low-carbon ammonia, a key component of nitrogen fertilizers, as a sustainable alternative.
However, while the use of renewable energy instead of natural gas is viable and investments are being made, increasing production will require specific incentives to offset higher manufacturing costs and encourage adoption among farmers.
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