Even though commodity prices have slumped, the global food imports are predicted to pass $1,000 billion for the first time in 2008, representing an increase of 23 percent in 2007, and 64 percent higher than the 2006 figure, the Food and Agricultural Organisation (FAO) has revealed.
Developing nations will account for $343 billion of food imports across the world in 2008, a jump of 35 percent, and many nations are trying to cut this bill in the midst of economic difficulties.
FAO has warned that the financial crisis gripping global markets could trigger a new wave of food riots across the developing world.
As the credit crunch hits agricultural markets causing commodity prices to tumble, farmers may cut their planting because of lack of funds to buy fertilizer, the organization said this week in its Food Outlook Report.
The report warned that even though prices of commodities such as corn, rice and wheat have dropped by between 40 and 60 percent, “riots and instability could again capture the headlines” and cautioned against a “false sense of security”.
The twice-yearly FAO study said: “Under the current gloomy prospects for agricultural prices, high input costs and more difficult access to credit, farmers may cut their plantings, which might again result in a tightening of world food supplies.”
In the past 12 months, food riots broke out across the globe in developing nations from Egypt to Haiti as commodity prices for basic foodstuffs surged to record levels.
FAO said further price increases could happen again during the 2009-10 harvesting season, “unleashing even more severe food crises than those experienced recently”.
The possible worsening of the lack of available credit by next year could cause more problems for food producers, with the effect particularly pronounced in the developing world.
By Felix Dela Klutse