Food import bills reach a record high - FAO

Global food import bills are increasing, partly due to soaring demand for biofuels, according to UN Food and Agriculture Organisation's latest Food Outlook report.

Global expenditures on imported foodstuffs look set to surpass US$400 billion in 2007, almost five per cent above the record of the previous year, the FAO said in a statement in Accra on Thursday.

Rising prices of imported coarse grains and vegetable oils - the commodity groups that feature most heavily in biofuel production - account for the bulk of the increase. Import bills for these commodities are forecast to rise by as much as 13 per cent from 2006, the report said.

It said more expensive feed ingredients would lead to higher prices for meat and dairy products, raising expenditures on imports of those commodities. In several cases, such as for meat and rice, larger world purchases are likely to drive import bills up.

In the case of sugar, generally high and volatile prices could lead to smaller import volumes, which is likely to result in a drop in the cost of global sugar imports, the report said.

"Record-high international freight rates have also affected the import value of all commodities, putting additional pressure on countries' abilities to cover their food import bills."

The statement said developing countries as a whole were anticipated to face a nine per cent increase in overall food import expenditures in 2007.

The more economically vulnerable countries are forecast to be most affected, with total expenditures by low-income food-deficit (LIFDC) and least developed countries (LDCs) expected to rise by 10 percent from last year.

"The food import basket for the least developed countries in 2007 is expected to cost roughly 90 percent more than it did in 2000," said FAO economist Adam Prakash.

"This is in stark contrast to the 22 percent growth in developed
country import bills over the same period."

FAO said world cereal production in 2007 is forecast to reach 2,125 million tonnes, up 6 per cent from the reduced level in 2006 and higher than FAO's previous forecast in May.

"The prospect of a strong recovery in global cereal production in 2007 is a positive development, but total supplies will still be barely adequate to meet the expected rise in demand, not only from the traditional food and feed sectors but in particular from the fast-growing biofuels industry," said Abdolreza Abbassian, one of the authors of the report.

"This means prices for most cereals are likely to remain high in the coming year."

Source: GNA