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World food import bill may fall in 2012 – FAO

by Business News Report

The UN Food and Agriculture Organisation (FAO), on Thursday said lower international prices and freight rates, together with lower cereal purchases, could push down the world food import bill in 2012. This is contained in the `Food Outlook’, a bi-annual global market report published by FAO. Global expenditure on food imports was forecast at 1.14 trillion dollars in 2012, 10 per cent lower than last year’s record level.
“In spite of tight markets, a set of conditions and measures have so far stopped international food prices from spiralling up as they did between 2007 to 2008 and 2009 to 2010. Chief among those are the improved international coordination and market transparency brought about by the G20’s Agricultural Market Information System (AMIS), which has helped to prevent panic and to stop the worst drought in decades turning into a food price crisis as has happened in the past,’’ FAO Director-General José Graziano da Silva said. Droughts or floods are not what causes crises, it’s lack of governance. In a globalised world, we cannot have food security in only
one country or in one region. We need to strengthen the global governance of food security,’’ an FAO statement quoted Graziano da Silva as saying.
According to Food Outlook, the balance between global cereal supply and demand is forecast to tighten considerably between 2012 to 2013, due mainly to likely declines in wheat and maize outputs. World cereal production is forecast to fall by 2.7 per cent from previous year’s record, leading to a 25 million tonne contraction in
world stocks.

Meanwhile, the FAO Food Price Index fell one per cent in Oct. 2012, and for the first ten months of the year food prices were on average eight per cent lower than in the same period in 2011. The Index dipped two points to 213 points from September’s revised level of 215 points. FAO said the decline was largely due to lower international prices of cereals, oils and fats, which more than offset increases in dairy and sugar prices.
The FAO Cereal Price Index remained 12 per cent higher than in October last year, falling 1.2 per cent from September, mostly because of slightly lower wheat and maize prices. Current wheat prices reflect reduced trade activity, while maize values are down, mostly due to slowing demand from the livestock
and industrial sectors. For wheat, world trade from 2012 and 2013 is forecast to fall below the previous season’s peak. Prices are expected to stay above 2011 levels.
For coarse grains, the market is also expected to remain extremely tight from 2012 to 2013, with FAO’s latest forecast for production in 2012 pointing to a 2.5 per cent decline from the 2011 record level. Stocks are forecast to fall to historic lows. However, world rice production in 2012 may surpass last season’s record, supported by favourable growing conditions. Steady import demand, together with very ample export supplies, are sustaining an expansion of trade in 2012, with a further, albeit small, increase foreseen in 2013.

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