The world will spend $1.17 trillion on food imports, including freight costs, this year, the smallest figure since 2010 due to low prices for meat, dairy, and grains, said the U.N. Food and Agriculture Organization. The developing world will see a smaller decline, only 5 to 9 percent, the group said, because the strong dollar “is keeping the cost of food imports high from a local currency perspective and adding strain to scarce foreign exchange reserves.”
The FAO said global food markets are likely to be generally well balanced through fall 2017 with prices that are both relatively low and stable. Grain supplies will be ample following record-setting wheat, corn, and rice harvests worldwide this year. The production of soybeans and other oil-bearing crops could set a record as well. Futures prices at the Chicago Board of Trade for wheat and corn have dropped by more than 16 percent this year, and rice futures are the lowest since 2008.
In its semiannual Food Outlook, the FAO said the total value of food imports would fall by 11 percent this year, “marking the largest annual fall in absolute terms in recent history, to a level not witnessed since 2010.” Costs will be down sharply for meat, dairy, and grains, outweighing increases from 2015 for sugar, fish, vegetable oils, and fruits and vegetables.
Freight costs have been volatile in the past year, said the FAO, using the example of the Baltic Dry Index, one yardstick for costs. While the index is much lower than a year ago, it has risen by 90 percent since January.
The FAO’s monthly Food Price Index rose by nearly 3 percent in September and is 10 percent higher than the same month a year ago. The index, which tracks international prices for a basket of commodities, has risen every month this year except July and is now at its highest level since March 2015. Sugar and dairy prices were up in September, while grains were down, meat stable, and vegetable oils up slightly.