Info Service on WTO and Trade Issues (Oct16/11)
12 October 2016
Third World Network
United Nations: Global food import bill to fall to six-year low
Published in SUNS #8331 dated 12 October 2016
Geneva, 11 Oct (Kanaga Raja) -- The value of total food imports is
forecast to decline by 11 percent in 2016 to US$1.17 trillion, the
Food and Agriculture Organisation of the United Nations (FAO) has
In its latest Food Outlook, FAO said that this marks the largest annual
fall in absolute terms in recent history, and to a level not witnessed
At the product level, the import bills anticipated to undergo the
largest absolute declines in 2016 are those for livestock products
and cereal-based foodstuffs, which could fall by around US$27 billion,
or 12 percent, and US$25 billion, or 16 percent, respectively.
Commodity import bills that could instead increase in 2016 include
sugar (+US$10 billion), fish (+US$6 billion), fruit and vegetables
(+US$5 billion), and vegetable oils (+US$3 billion).
In all of these cases, said FAO, international benchmark quotations
are above the 2015 levels, and import volumes are set to exceed those
of last year.
The FAO report however noted that the tendency at the world level
for substantially lower import costs in 2016 does not necessarily
extend to many of the economically vulnerable nations.
The food import bills of least-developed countries (LDCs), low-income
food-deficit countries (LIFDCs) and those geographically situated
in sub-Saharan Africa (SSA) are forecast to fall by less than the
11 percent global decline, with falls ranging between only 5 and 9
percent among the country groups.
"For all of these economically disadvantaged countries, higher
import volumes of products in the oilseed complex, as well as of sugar
and cereals, particularly maize, are seen to offset the gains to be
made from lower import bills of other product groups."
In some cases, particularly for countries in SSA as well as LIFDCs,
the larger maize purchases are in response to shortfalls in the domestic
production of the staple.
"Despite the general decline of the US dollar-denominated food
bills in 2016, a different picture emerges when denominated in local
currencies, given the prevailing strength of the US dollar. Although
having stabilized in recent months, the US dollar remains exceptionally
strong, keeping the cost of food imports high from a local currency
perspective and adding strain to scarce foreign exchange reserves
from which the cost of importing is met."
According to the Food Outlook, FAO's biannual report on global food
markets, from a global perspective, food markets are expected to remain
"generally well balanced" in 2016/17 amid large export availabilities
and relatively low and more stable international prices, especially
A positive outlook for global cereal production in 2016, together
with abundant stocks, points to a generally comfortable supply and
demand balance in 2016/17, said FAO.
In 2016, world cereal production is set to increase by 1.5 percent,
or 38 million tonnes, to hit a new record of 2,569 million tonnes,
topping by at least 5.5 million tonnes the previous peak of 2014.
The current FAO forecast is 3.4 million tonnes higher than projected
in September, with most of the upward revisions concerning wheat and
World wheat production in 2016 is expected to exceed the 2015 record
by 1.2 percent, underpinned by output increases in India, the Russian
Federation and the United States.
Similarly, global rice production is forecast to grow by 1.3 percent,
to an all-time high, driven by recoveries in Asia, as well as by gains
in Africa and North America.
Global production of coarse grains is set to rebound by 1.8 percent
from last year's reduced level, mostly reflecting prospects for record
maize crops in the United States, Argentina and India.
Global cereal utilization in 2016/17 is projected to expand by 1.6
percent to 2,560 million tonnes, with feed usage, in particular, seen
increasing by 2.7 percent in 2016/17, amid large supplies of maize
and low quality wheat.
In spite of the projected year-on-year growth in total cereal utilization,
the rise in world cereal production in 2016 would still result in
an increase in the level of global cereal inventories.
According to the report, all would be in the form of wheat, as ending
inventories of coarse grains and rice are anticipated to slide below
their opening levels.
The international wheat market in 2016/17 is likely to witness another
season of abundant supplies, amid expectations of record production
and rising stocks, it said.
At 742.4 million tonnes, FAO's current forecast for global wheat production
in 2016 is 1.2 percent above the 2015 all-time high, with increases
in India, the Russian Federation and the United States accounting
for most of the year-on-year growth.
The forecast for world wheat trade (including wheat flour in wheat
equivalent) in 2016/17 (July/June) has been raised by 1.5 million
tonnes since September, and now stands at 165 million tonnes, similar
to the 2015/16 record.
On a regional basis, wheat imports in 2016/17 are predicted to remain
close to the previous season's levels.
"However, on the export side, an emerging feature is the anticipated
emergence of the Russian Federation as the world largest wheat exporter,
taking over from the EU which is expected to occupy a distanced second
place, almost on par with the United States."
Total wheat utilization in 2016/17 is projected to reach 730.5 million
tonnes, almost 15 million tonnes, or 2 percent, above the 2015/16
At 498 million tonnes, food consumption would continue to account
for the bulk of global wheat utilization. On the other hand, the use
of wheat in animal rations is forecast to increase by 6.2 percent
to 146 million tonnes, reflecting the ample availabilities of low
quality wheat at competitive prices.
World wheat stocks are forecast to increase further in 2016/17 and
reach 234 million tonnes, up 8.4 million tonnes from their already
elevated opening levels and the highest level since 2001/02.
Against this background, said FAO, international wheat prices are
likely to remain stable and relatively low during the 2016/17 season.
Although world production of coarse grains is set to increase in 2016,
the overall supply and demand outlook for 2016/17 suggests a slight
tightening of the market compared to the previous season. However,
with large export availabilities and weak import demand prospects,
international coarse grain prices could remain subdued.
World production of coarse grains in 2016 is forecast to rise by 1.8
percent from the reduced 2015 harvest.
Record maize outputs in the United States and Argentina, along with
gains in a number of other major producing countries, are likely to
boost world maize production in 2016, despite expected sharp declines
in Brazil, China and South Africa.
World production of sorghum is also heading to an increase, with anticipated
growth in Sudan and Mexico more than offsetting a reduction in the
United States. By contrast, barley production is expected to fall
below its 2015 level on smaller outputs in several countries, especially
Morocco and Turkey.
Global utilization of coarse grains is anticipated to grow by 1.5
percent in 2016/17, driven largely by higher uptakes of coarse grains
for animal feeding and industrial use.
The most significant expansion concerns maize, which could see much
greater volumes fed to animals in the United States and China, supported
by larger domestic supplies and more competitive prices than in the
"Relatively low prices are also likely to stimulate industrial
uses, in particular of maize for the production of starch and biofuels."
FAO said the 2016 season is unfolding favourably in the Northern Hemisphere,
with abundant monsoon rains over Asia more than compensating for El
Nino-related setbacks that occurred along or south of the Equator.
As a result, forecasts of world rice production in 2016 have been
upgraded to a record 497.8 million tonnes, up 6.3 million tonnes,
or 1.3 percent, from the depressed outcome of 2015. If confirmed,
this would mark the first year of global output growth since 2013.
Much of the expansion is forecast to stem from recoveries in Asia,
although sizeable gains are also foreseen in Africa and the United
After a combination of tighter export availability and subdued import
demand depressed 2016 deliveries, early prospects point to world rice
trade stagnating at 43.8 million tonnes in 2017.
"On the import side, improved local harvests may enable countries
in the Far East and Latin America and the Caribbean to reduce imports,
with good crops and depreciated currencies also tempering import growth
As for exports, an output recovery could help India boost its sales
to international markets, primarily at the expense of lower deliveries
by Thailand, consolidating India's position as the world's leading
supplier of rice.
FAO said with expanding food use lifting total rice utilization over
projected production in 2016, global rice reserves at the close of
2016/17 are anticipated to fall for the second successive season,
reaching 169.6 million tonnes.
India and Thailand are predicted to lead the 0.7 percent stock draw-down,
but the fall is expected to be mitigated by accumulations elsewhere,
especially in China (Mainland).
After a tightening in market fundamentals in 2015/16, preliminary
forecasts for the 2016/17 season point to a relatively balanced global
supply and demand situation for both meals/cakes and oils/fats. In
2016/17, global oilseed production is forecast to recover fully from
last season's fall, possibly climbing to a new record.
While the expansion would be led by soybeans, the other oilseeds are
also anticipated to post sizeable gains, with the exception of rapeseed.
Soybean growth would be concentrated in the United States, where record-high
yields are set to boost output. In South America, production might
grow only moderately, as farmers are expected to reduce soybean plantings
in favour of competing crops.
In China and India, production could expand, reversing the downward
trend observed in recent years.
Growth in global palm oil output is forecast to resume, as palms in
Southeast Asia begin to recover from the effects of adverse weather
in 2015/16. Based on current forecasts, world output and consumption
of oils and meals would reach record levels in 2016/17.
International trade in oils/fats is forecast to grow at a faster pace
than last season, fuelled by the anticipated recovery in palm oil
production in Indonesia and Malaysia. The outlook is less buoyant
for world meal trade, which could face slowing growth, mainly reflecting
subdued import demand by China.
World meat production is anticipated to stagnate in 2016, rising by
a meagre 0.2 percent to 319.8 million tonnes.
While output is expected to rise particularly in the United States,
the EU, Brazil, India, Mexico, Canada and the Russian Federation,
a down-turn in meat production - especially in China, but also in
Australia - would weigh on the overall trend. Excluding the last two
countries, aggregate meat production of the rest of the world would
rise by 1.4 percent.
Global meat trade is forecast to recover in 2016, rising by 4.4 percent
to 31.1 million tonnes, representing a return to trend, after a fall
Based on current expectations, trade in pigmeat is expected to increase
by 10.8 percent, poultry meat by 4.4 percent and bovine meat by 0.3
percent, while ovine meat (lamb and mutton) may decrease by 2.8 percent.
Increased meat imports are expected particularly in China, but also
in Japan, South Africa, Chile, the Republic of Korea, Mexico, the
EU, Iraq, the Philippines, Viet Nam, the United Arab Emirates and
the Russian Federation.
By contrast, growth in domestic production may result in reduced imports
by the United States and Canada, with Angola also anticipated to buy
The expansion in world exports is projected to be led by Brazil and
the EU, followed by the United States and Canada, with sales also
rising for Belarus, Thailand, the Russian Federation, Paraguay, Mexico
Meanwhile, exports by Australia, China, Turkey, South Africa, New
Zealand, Argentina and India are likely to be curtailed.
World milk production is forecast to grow by 1.1 percent to 817 million
tonnes in 2016, with output set to expand in Asia and North and Central
America, but to stagnate in Europe and Africa and decline in Oceania
and South America.
"The removal of some excess export supplies in the EU and anticipation
of tighter milk availabilities during the second half of the year
caused international dairy prices to rebound between May and September,"
Trade in dairy products in 2016 is projected to be almost unchanged,
remaining at 72 million tonnes of milk equivalent. This stands in
marked contrast to an average annual rate of increase of 6 percent
for period 2009-2014.
In 2015, a drop in shipments to China and the embargo by the Russian
Federation on imports from specific countries impinged on international
dairy product trade. For 2016, purchases by China and, to a lesser
extent, the Russian Federation are projected to recover somewhat,
with growth also foreseen for Brazil, the United States and Mexico.
However, this is forecast to be largely counterbalanced by substantial
reductions in imports by Venezuela and Algeria, and also by the United
Arab Emirates, Nigeria, Singapore, Malaysia, Vietnam and Thailand.
Overall, said FAO, international trade flows in cheese and butter
are anticipated to expand, while shipments of milk powders may fall.
"Among exporters, the EU, New Zealand, Belarus and Uruguay are
forecast to increase their sales. However, this is likely to be almost
matched by a fall in shipments from the United States, Brazil and
Argentina, while exports by Australia and Switzerland could be unchanged."
After falling for much of 2015, international fish prices have given
signs of a recovery in the first five months of 2016, while still
remaining below their 2015 levels.
The report said the recent price strength, which extended to all the
major species except for shrimps, generally reflected a tightening
of supplies in some major exporting countries, combined with a stronger
Global fish production is forecast to grow by 1.8 percent to 174.1
million tonnes in 2016, boosted by a 5 percent expansion of aquaculture
to 81.4 million tonnes, confirming the sector as the main engine for
fishery growth, which compensated for a 1 percent contraction in wild
fish output to 92.7 million tonnes.
"Consumer demand for fish remains strong, with more people worldwide
appreciating the health benefits of regular fish consumption."
Direct human consumption, which accounts for more than 85 percent
of all fish uses, is projected to grow by 2.3 percent to 152.8 million
tonnes in 2016. This would result in a slight increase in per capita
fish intake, from 20.3 kg in 2015 to 20.5 kg in 2016.
Although several exporters are likely to face supply constraints associated
with El Nino, diseases and fishing quotas, the value of international
fish trade may increase by 4 percent in 2016, recouping part of the
losses registered in 2015, said the report. +