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FAO. 2022. Food Outlook – Biannual Report on Global Food Markets. Food Outlook, November 2022. Rome. https://doi.org/10.4060/cc2864en

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HIGHLIGHTS

FAO’s latest forecasts point to somewhat easing of market conditions for basic foodstuffs. However, increased climate variability, conflicts and geopolitical tensions, bleak economic prospects, soaring agricultural input costs and export restrictions continue to pose challenges to global food commodity market stability.

WHEAT

With expectations of a record wheat production and slower utilization growth, global wheat inventories are set to rise in 2022/23. However, most of the increase in stocks is anticipated to be concentrated in a few countries. Export disruptions and reduced import demand are seen reducing world wheat trade below the 2021/22 level.

COARSE GRAINS

A forecast fall in production is seen tightening the global coarse grain markets in 2022/23, driving an expected contraction in global utilization and stocks. World trade in coarse grains is predicted to decline slightly, mostly reflecting expectations of weaker import demand and tighter export supplies.

RICE

Although inclement weather and sharp hikes in input costs are forecast to lower global production and tighten exportable availabilities, a still overall adequate global harvest and large carry-ins are anticipated to keep rice supplies abundant in 2022/23.

MEAT

World meat production in 2022 is forecast to expand, albeit moderately, with expected production growth slowdowns in the pig and poultry meat sectors, reflecting animal disease prevalence and producer margin erosion. Meanwhile, an anticipated reduction in import demand, notably for pig meat, coupled with high prices and economic downturns, may lead to a slight decline in global meat trade.

SUGAR

An anticipated increase in world sugar production, amid a likely slow rise in utilization, is set to push the global sugar surplus to 4.9 million tonnes in 2022/23. Global trade in sugar is predicted to expand moderately, largely spurred by larger export availabilities compared to the previous season.

OILCROPS

FAO’s preliminary forecasts for the 2022/23 (October/September) season point to a somewhat easing market situation for oilseeds and derived products from the previous season, mainly on account of expectations of production recoveries. However, the outlook remains relatively tight and is subject to numerous uncertainties.

DAIRY

World milk production is forecast to expand in 2022, albeit slowly, impacted by extreme weather events, labour shortages and high input costs. Following two decades of uninterrupted increases, global dairy trade could contract, principally caused by likely lower purchases by China amid rising domestic production and elsewhere due to high prices and economic downturns.

FISHERIES

Total fisheries and aquaculture production is expected to increase globally by 1.2 percent in 2022 (+2.6 percent for aquaculture and -0.2 percent for capture fisheries). Continued supply limitations and high inflation could cause prices to strengthen, but a slowing global economy will likely increase price sensitivity.

MARKET INDICATORS

Global food import bill

At USD 1.94 trillion, the global food import bill (FIB) is forecast to reach another record in 2022. The year-on-year increase will likely be less pronounced than in the previous year, owing to the falling purchasing power of importers at a time when food prices are at all-time highs. Worryingly, many economically vulnerable countries are paying more while receiving less food.

Global agriculutral input import bill

The global agricultural input import bill (IIB) is forecast to reach an all-time high of USD 424 billion in 2022, representing a near 50-percent increase from 2021 and reaching more than twice the level registered in 2020. This sharp increase is almost entirely on account of soaring costs of inputs, while growth in imported volumes remains subdued.

Ocean Freight Market developments

Despite generally buoyant trade in grains and oilseeds, as well as challenging logistics in some areas, freight rates for the transportation of dry bulk commodities took a significant step down over the past six months, as geopolitical tensions, export restrictions and global recessionary fears weighed on market sentiment and curbed chartering activity.

Contents

MARKETS AT A GLANCE

Wheat

Coarse grains

Rice

Oilcrops, oils and meals

Sugar

Meat and meat products

Milk and milk products

Fish and fishery products

MAJOR POLICY DEVELOPMENTS

Grains

Rice

Meat

Dairy

STATISTICAL TABLES

MARKET INDICATORS

Ocean freight rates

Food import bill

Agricultural input import bill

The FAO price indices

Food Outlook is published twice a year, normally in June and November. The June report contains a more detailed market analysis while the November report only provides summary market assessments (Markets at a glance).

ACKNOWLEDGEMENTS

The Food Outlook report is a product of the FAO Markets and Trade Division of the Economic and Social Development stream. This report was prepared under the overall guidance of Boubaker Ben-Belhassen, Director and Upali W. Galketi Aratchilage, Senior Economist. Market summaries were written by a team of economists, whose names appear under their respective contributions. A contribution by the International Grains Council on ocean freight rates for the market indicators section is also gratefully acknowledged. The report benefited from research support from many staff, namely, David Bedford, Harout Dekermendjian, Grace Maria Karumathy, Lavinia Lucarelli, Emanuele Marocco, Emanuele Mazzini, Marco Milo, Fabio Palmeri, and the Fisheries and Aquaculture Statistics Team and GLOBEFISH.

Special thanks go to David Bedford and Lavinia Lucarelli for preparing the charts and statistical tables and to Valentina Banti for her administrative support. Additionally, the team is grateful to Ettore Vecchione for the desktop publishing and Rosemary D. Allison for her valuable editorial assistance.

WHEAT

FAO’s forecast for world wheat production in 2022/23 stands at a record 784 million tonnes, up 0.6 percent from last season. Significant harvest recoveries in Canada and the Russian Federation are expected to make up the bulk of the year-on-year increase and offset production declines foreseen in several countries, including Argentina, Australia, the European Union, India, Morocco and, especially, Ukraine.

At 775 million tonnes, total wheat utilization is seen expanding marginally in 2022/23, by 0.3 percent, from 2021/22, mostly driven by higher food consumption of wheat, which is forecast to continue rising in line with population growth, as well as a greater industrial use. By contrast, high wheat prices relative to feed grains, maize in particular, will likely reduce feed use of wheat in 2022/23, largely in China and, to a lesser extent, the United States of America, where supplies are tight.

Based on the latest global production and utilization forecasts, global wheat inventories are expected to rise above opening levels by 2.0 percent in 2022/23 to 300 million tonnes, the highest level on record. However, most of the projected accumulation of wheat stocks is expected to occur in China and the Russian Federation. Excluding these two countries, wheat inventories in the rest of the world are predicted to fall by more than 8 percent below their opening levels, led by drawdowns expected in India, the European Union and the United States of America, as well as several countries in Africa and Asia.

World wheat trade in 2022/23 (July/June) is forecast to contract by 1.0 percent from the 2021/22 record level, down to 194 million tonnes, mostly reflecting export disruptions and expectations of lower import demand in some countries due to bigger domestic harvests. Despite greater recent shipments due to the Black Sea Grain Initiative, wheat exports from Ukraine in 2022/23 are forecast to be well below average and last season’s level because of a slower pace of exports and ongoing logistical challenges. Export restrictions to protect domestic supplies are expected to reduce wheat sales from India, while reduced production will likely curb Argentina’s exports. On the import side, anticipated smaller purchases by China, the Islamic Republic of Iran and Kazakhstan, on account of bigger national harvests, are seen to be reducing wheat import demand.

For additional analyses and updates, see:

FAO Cereal Supply and Demand Brief

http://www.fao.org/worldfoodsituation

Crop Prospects and Food Situation

http://www.fao.org/giews/reports/crop-prospects

AMIS Market Monitor

http://www.amis-outlook.org/amis-monitoring

Contact:

Erin Collier

Jonathan Pound (Production)

COARSE GRAINS

Total production of coarse grains is forecast to fall by 2.8 percent in 2022, down to 1 467 million tonnes, the lowest output since 2019. The foreseen year-on-year fall stems predominantly from an anticipated decline in maize production, led by smaller harvests in the European Union, Ukraine and the United States of America. World sorghum production is also forecast to decline, owing mostly to a lower output expected in the United States, while global barley production is seen rising.

Because of lower availabilities, world total utilization of coarse grains is forecast to decline by 1.2 percent in 2022/23, marking the first drop in over a decade. The biggest contraction is foreseen in feed use of coarse grains, underpinned by expectations of a sharp fall in feed use of maize, especially in the United States and the European Union due to tight supplies, as well as lower feed use of barley and sorghum. Industrial use of coarse grains is also forecast to fall in 2022/23, mostly in China and the United States.

With global consumption predicted to outweigh production, coarse grain inventories are forecast to fall by 5.3 percent in 2022/23 to their lowest levels since 2013/14. The bulk of the expected contraction is attributed to maize inventory drawdowns, especially in China, the European Union and the United States. It is also expected that global sorghum stocks will decline below their opening levels, while a build-up of barley stocks in the Russian Federation is seen raising global barley inventories.

World trade in coarse grains is forecast to decline by 3.4 percent in 2022/23 (July/June), compared to 2021/22. Anticipated declines in barley and sorghum trade make up most of the forecast overall drop, driven by smaller purchases of both grains by China and lower barley imports by Türkiye. On the export side, sorghum shipments by the United States, as well as barley sales from Australia and Ukraine, are all expected to decline following smaller harvests, in addition to trade disruptions in the latter. Global maize trade is forecast to decline only marginally in 2022/23, with record exports from Brazil forecast to nearly balance a likely fall in sales by the United States, and, to a lesser extent, Argentina and the European Union. Ukraine’s maize exports could approach last season’s level, pending the future of the Black Sea Grain Initiative. Expected lower maize imports by Canada and China are seen outweighing an anticipated increase in purchases by the European Union to compensate for reduced production.

For additional analyses and updates, see:

FAO Cereal Supply and Demand Brief

http://www.fao.org/worldfoodsituation

Crop Prospects and Food Situation

http://www.fao.org/giews/reports/crop-prospects

AMIS Market Monitor

http://www.amis-outlook.org/amis-monitoring

Contact:

Erin Collier

Jonathan Pound (Production)

RICE

Although inclement weather and sharp hikes in input costs are predicted to lower world rice output for the first time in three years, the 2022/23 global harvest is still envisaged to remain at an overall average level of 512.6 million tonnes (milled basis). Asia is seen largely underpinning this result, thanks to a resilient level of plantings, which should help to counteract some of the yield declines anticipated to stem chiefly from poorly distributed rains, especially in Southern Asia. Output is also forecast to recover in Africa, with positive results likewise registered in Oceania. Production expectations are negative elsewhere, in particular for the United States of America and Europe, where rice harvests are set to fall to multi-decade lows.

Global use of rice for food is predicted to remain robust in 2022/23, expanding in tandem with population growth to reach 426.5 million tonnes. Conversely, after reaching extraordinary highs in 2021/22, animal feed and industrial uses of rice may contract. This could result in total world utilization of rice in 2022/23 declining by 0.7 percent year-on-year, to 518.3 million tonnes.

The outlook for international trade in rice in 2023 (January–December) is dampened by prospects of tighter exportable availabilities, as well as uncertainties surrounding the impact of the slowdown in economic growth and the strength of the United States dollar on import demand. This is so, even if efforts to compensate for domestic production shortfalls and mitigate the impact of food price inflation through imports could keep volumes traded across the globe at a comparatively abundant level of 52.9 million tonnes.

Global rice stocks at the close of 2022/23 marketing seasons are forecast at 193.4 million tonnes, 1.8 percent below their record opening levels, but still the third largest volume on record. This relative abundance mainly reflects expectations of stock accumulations in China and India, which could overshadow a forecast 8.1-percent drawdown in aggregate inventories held by all other countries.

International rice prices have moved up for the large part of 2022, reversing most of the declines registered in 2021, due to large exportable availabilities. Supply constraints in the Japonica and basmati markets contributed to the price increases, as did strong demand for Indica varieties and export policy changes in India. Reflective of these trends, the FAO All Rice Price Index averaged 112.0 points in October 2022, up 2.5 percent from May and 12.1 percent above its year-earlier level.

For additional analyses and updates, see:

FAO Rice Price Update

https://www.fao.org/markets-and-trade/commodities/rice/fao-rice-price-update/

Cereal Supply and Demand Brief

http://www.fao.org/worldfoodsituation/csdb/

AMIS Market Monitor

http://www.amis-outlook.org/amis-monitoring

Contact:

Shirley Mustafa

OILCROPS

Global oilseed production in 2022/23 is forecast to rebound from the previous season to an all-time high, primarily driven by expected output recoveries of soybean and rapeseed, which more than offset a likely drop in sunflower seed production. The anticipated record world soybean production is chiefly underpinned by a markedly higher output expected in Brazil, assuming normal weather conditions, whereas the crop in the United States of America could fall slightly because of lower yields. International rapeseed production is predicted to rise sizeably, thanks to favourable outlooks across Australia, Canada and the European Union. By contrast, world sunflower seed production is seen declining, as the war in Ukraine has disrupted sowing activities significantly, while yields are also expected to fall as a result of shortages of inputs. In the case of palm oil, global output is forecast to rise modestly, as lingering labour shortage issues in Malaysia continue to constrain the potential for a higher growth rate.

In 2022/23, world oils/fats consumption is anticipated to recover from an exceptional slowdown registered in 2021/22 amid elevated costs, while global oilmeal uptake is also seen expanding moderately after stagnating during the previous season, linked to expectations of growing feed demand mainly in China (mainland). Meanwhile, international trade in vegetable oils and oilmeals is forecast to rebound after contracting for two consecutive seasons, on account of anticipated improving global supplies and larger import purchases, particularly from Asia.

With the global output of oilcrop derived products seen exceeding consumption, a replenishment of world stocks is envisaged for both oils/fats and oilmeals by the end of the 2022/23 season, although the stocks-to-use ratios for both products are anticipated to remain below their respective five-year averages, implying relatively tight market outlooks. In line with such fundamentals, international prices of oilseeds, vegetable oils and oilmeals continued hovering around multi-year high levels in recent months, after spiking to all-time highs in early 2022.

In the coming months, the markets of oilcrops and their by-products will be influenced by numerous uncertainties. These include climatic conditions in major growing regions, consumption patterns associated with global economic prospects, the war in Ukraine, changes in trade policies, the direction of biodiesel admixture mandates and crude oil prices.

For additional analyses and updates, see:

Oilcrops Monthly Price and Policy Update

https://www.fao.org/markets-and-trade/publications/en/?querystring=Oilseeds

AMIS Market Monitor

http://www.amis-outlook.org/amis-monitoring

Contact:

Di Yang

SUGAR

FAO’s preliminary forecast for the 2022/23 (October/ September) season pegs world sugar production at 179.6 million tonnes, up 4.5 million tonnes, or 2.6 percent, from the 2021/22 outturn. The increase is largely attributed to expectations of a significant recovery in Brazil’s production, the world’s largest sugar producer and exporter, and larger crops in China and Thailand that more than offset likely reductions in the European Union and Pakistan. While production prospects in India, the world’s second largest sugar producer, are favourable, sugar output is anticipated to fall short of record level of 2021/22, as additional volumes of sugarcane are foreseen to be diverted for ethanol production.

Global sugar consumption is seen increasing for a third successive season in 2022/23, up 1 million tonnes, or 0.6 percent, from the previous season. Overall, the year-on-year growth in consumption is expected to mostly originate in Africa, driven by population growth and urbanization, and Asia, reflecting robust demand from the food processing industry. However, the growth pace of global sugar consumption will likely be muted and lower than the long-term trend, amid the projected significant deceleration in global economic growth in 2022/2023. The slower increase in consumption, compared to production, is expected to push the sugar market into a global surplus of 4.9 million tonnes in 2022/23.

The forecast for the world sugar trade in 2022/23 stands at 61.2 million tonnes, which corresponds to a 1.8-percent increase over the estimated volume for 2021/22. Foreseen higher exports from Brazil and Thailand will likely outweigh expected lower shipments from India, which are forecast to be down from their record level in 2021/22. On the import side, it is anticipated that strong purchases will be made by traditional importers, in particular China, the largest international sugar buyer, and Indonesia. Imports by the European Union are set to increase from last year, based on prospects of a reduced domestic sugar output.

After reaching a five-year high in April 2022, international sugar prices generally decreased in the following months. The price declines were mainly the result of a slowdown in the global economic activity coupled with overall greater world availabilities. Further downward pressure on sugar prices was exerted by lower ethanol prices, which prompted a larger use of sugarcane to produce sugar in Brazil, and the weakening of the Brazilian real against the United States dollar, which prompted greater exports.

Contact:

ElMamoun Amrouk

Fabio Palmeri

MEAT AND MEAT PRODUCTS

World meat production in 2022 is forecast at 360 million tonnes (in carcass weight equivalent), up by 1.2 percent from 2021. Much of the expansion is foreseen to originate in Asia, mainly for pig meat in China, amid recovery from the African swine fever disease, and in South America, notably for bovine and poultry meats, reflecting solid international demand, which will likely be offset by expected production declines in Europe. Meat production systems worldwide could register setbacks in 2022 amid producer margin erosion resulting from rising input costs, animal diseases and unfavourable weather conditions. In some countries, this situation has led to high and premature liquidation of animals, inducing carcass weight to decline, reduced overall meat production, or the scaling down of production to ensure financial buoyancy. While COVID-19-related physical-distancing requirements have been significantly relaxed, they continue to disrupt meat production value chains and limit the normal market functioning in some countries.

World meat trade in 2022 is forecast to total nearly 42 million tonnes, down by 0.8 percent from 2021, principally due to a predicted decline in pig meat imports by China because of rising internal production and lower domestic prices earlier in the year. Meat imports across many other countries are likely to be subdued, reflecting economic downturns and high world meat prices. By contrast, meat purchases by several countries are expected to increase, including the United Kingdom of Great Britain and Northern Ireland, the European Union, the United States of America and the Republic of Korea, mainly because of higher internal demand. Nevertheless, tight supplies and high domestic demand will likely limit meat shipments from large exporters, such as the European Union, the United States of America, Canada and New Zealand. By contrast, higher meat exports are forecast for Brazil, China, Türkiye, India and Thailand, benefitting from high domestic availabilities and the strength of the United States dollar.

After rising almost uninterruptedly since October 2020, the FAO Meat Price Index reached an all-time high in June 2022, driven mainly by tight supplies across nearly all meat types from key exporting countries. Meanwhile, global meat import demand has been sluggish in recent months, impacted by economic downturns, high food import costs and financial constraints, less-buoyant food service sales, and increased domestic availability in a few large meat-producing countries.

For additional analyses and updates, see:

Meat Market Review

https://www.fao.org/markets-and-trade/publications/en/?news_files=113402

Meat Market Review: Emerging trends and outlook 2022 (forthcoming)

Contact:

Upali Galketi Aratchilage

Emanuele Marocco

MILK AND MILK PRODUCTS

World milk production in 2022 is forecast at 930 million tonnes, up by 0.6 percent from 2021, the slowest growth pace in the last two decades. Much of the expansion is foreseen to originate in India and Pakistan on rising dairy herds, although at slower growth rates than in earlier years due to animal disease outbreaks and extreme weather events, and in China, sustained by large-scale dairy operations. These predicted output increases will likely be nearly offset by possible output contractions in several countries. Most notable declines are anticipated in Ukraine, impacted by the ongoing war, and in Brazil, the European Union, Türkiye, New Zealand and Australia, owing to extreme weather events, labour shortages and high input costs, leading to squeezed profit margins.

Global trade in dairy products in 2022 is forecast at 85 million tonnes (in milk equivalents), down by 3.4 percent from 2021, which would represent the first decline in nearly two decades. The anticipated trade contraction is primarily attributable to a likely 15 percent decline in imports by China, mostly of whey and milk powders, starting from April, on high inventories, rising domestic milk production and lower food services sales related to COVID-19-related measures. Imports are also forecast to drop significantly in Viet Nam, the Russian Federation and Bangladesh, reflecting lower consumer purchases, and in Sri Lanka, because of limited foreign exchange availability. By contrast, imports by the Philippines, Indonesia and Mexico are anticipated to increase markedly, partially offsetting the declines expected elsewhere. On the supply side, New Zealand, the European Union, Belarus and Türkiye may register steep drops in exports, which could be partially compensated by higher shipments from Mexico, India, Argentina and the United States.

The FAO Dairy Price Index rose steadily since May 2020, except for four months from June to September 2021, reaching near record highs in June 2022, only 4 percent below the all-time high that the index reached in December 2013. This episode of price increase was mainly driven by the tightening of global markets on the back of lower supplies from Western Europe and Oceania. Since June, however, international dairy prices have been declining, underpinned by lower global import demand, notwithstanding the continued tight supply situation in several leading exporting countries.

For additional analyses and updates, see:

Dairy Market Review

https://www.fao.org/markets-and-trade/publications/en/?news_files=113040

Dairy Market Review: Emerging trends and outlook 2022 (forthcoming)

Contact:

Upali Galketi Aratchilage

Harout Dekermendjian

FISH AND FISHERY PRODUCTS

Total fisheries and aquaculture production is expected to increase globally by 1.2 percent in 2022 to 184.1 million tonnes. Output from aquaculture is forecast to grow by 2.6 percent, remaining marginally behind its long-term growth rate (3.7 percent between 2015–2020), as producers grapple with high input costs and market uncertainties, such as high freight rates and reduced consumer purchasing power. High fuel prices, lower quotas on major stocks, and poor weather in some key fishing grounds have all contributed to a slowdown in capture fisheries, which is forecast to fall by 0.2 percent in 2022. Looking towards 2023, aquaculture production is forecast to continue to rise, while that of capture fisheries will remain essentially flat.

The FAO Fish Price Index (FPI) stood at 119 points in September 2022, down 16 points from June 2022, when overall fish prices reached historic highs due to revived demand following the pandemic slump. However, September 2022 prices remained strong compared with September 2021, demonstrating a 20-point rise in the FPI. Prices of aquaculture products have since fallen back to previous levels, mainly because of reduced feed costs. A slowing global economy has reduced consumer purchasing power, and is likely to increase price-sensitivity in the near future. Tighter supplies have kept prices of capture fisheries high, with limited quotas for key whitefish and small pelagic fisheries exerting upward pressure on prices.

Trade volumes in live weight equivalent are forecast to in 2022. However, the higher prices will lead to a substantial increase in the value of trade. Much of this growth will stem from record-breaking salmon prices in the first half of the year and sustained high prices for whitefish and small pelagics. Overall, the value of global trade is projected to increase from USD 174.8 billion in 2021 to USD 193.5 billion in 2022, which would represent a surge of 10.7 percent. Trade values had slumped in 2020, largely due to reduced volumes, before rising by 16 percent in 2021 as economies reopened. In particular, China (mainland), Chile, Ecuador and Norway will account for most of this increase.

For additional analyses and updates, see:

The GLOBEFISH market reports at

http://www.fao.org/in-action/globefish/market-reports

Contact:

Audun Lem

Stefania Vannuccini

Statistical appendix tables

Appendix Table 1 (A & B): Cereal statistics

Appendix Table 2 (A & B): Wheat statistics

Appendix Table 3 (A & B): Coarse grains statistics

Appendix Table 4 (A & B): Maize statistics

Appendix Table 5 (A & B): Barley statistics

Appendix Table 6 (A & B): Sorghum statistics

Appendix Table 7 (A & B): Other Coarse grains statistics

Appendix Table 8 (A & B): Rice statistics

Appendix Table 9: Cereal supply and utilization in main exporting countries

Appendix Table 10: Total oilcrops statistics

Appendix Table 11: Total oils and fats statistics

Appendix Table 12: Total meals and cakes statistics

Appendix Table 13: Sugar statistics

Appendix Table 14: Total meat statistics

Appendix Table 15: Bovine meat statistics

Appendix Table 16: Ovine meat statistics

Appendix Table 17: Pigmeat statistics

Appendix Table 18: Poultry meat statistics

Appendix Table 19: Milk and milk products statistics

Appendix Table 20: Fish and fishery products statistics

Appendix Table 21: Selected international prices for wheat and coarse grains

Appendix Table 22: Wheat and maize futures prices

Appendix Table 23: Selected international prices for rice and price indices

Appendix Table 24: Selected international prices for oilcrop products and price indices

Appendix Table 25: Selected international prices for sugar and sugar price index

Appendix Table 26: Selected international prices for milk products and dairy price indices

Appendix Table 27: Selected international meat prices

Appendix Table 28: Selected international meat prices and FAO meat price index

Appendix Table 29: Fish price indices

Appendix Table 30: Selected international commodity prices

NOTES

GENERAL

• FAO estimates and forecasts are based on official and unofficial sources.

• Unless otherwise stated - all charts and tables refer to FAO data as source.

• Estimates of world imports and exports may not always match - mainly because shipments and deliveries do not necessarily occur in the same marketing year.

• Tonnes refer to metric tonnes.

• All totals are computed from unrounded data.

• Regional totals may include estimates for countries not listed. The countries shown in the tables were chosen based on their importance of either production or trade in each region. The totals shown for Central America include countries in the Caribbean.

• Estimates for China also include those for the Taiwan Province of China - Hong Kong SAR and Macao SAR - unless otherwise stated.

• Up to 2019/20 the European Union includes 28 member states. From 2020/21 the European Union includes 27 member states.

• Information provided by the Russian Federation includes statistical data for the Autonomous Republic of Crimea and the city of Sevastopol, Ukraine, temporarily occupied by the Russian Federation and is presented without prejudice to relevant UN General Assembly and UN Security Council resolutions, including UN General Assembly resolution 68/262 of 27 March 2014 and UN Security Council resolution 2202 (2015) of 17 February 2015, which reaffirm the territorial integrity of Ukraine.

• Information provided by Ukraine excludes statistical data concerning the Autonomous Republic of Crimea, the city of Sevastopol and certain areas of the Donetsk and Luhansk regions. The information is presented without prejudice to relevant UN General Assembly and UN Security Council resolutions, including UN General Assembly resolution 68/262 of 27 March 2014 and UN Security Council resolution 2202 (2015) of 17 February 2015, which reaffirm the territorial integrity of Ukraine.

• ‘-’ means nil or negligible.

• Cereals include wheat - rice and coarse grains. Coarse grains include maize - barley - sorghum - millet - rye - oats and NES (not elsewhere specified).

Production

• Cereals: Data refer to the calendar year in which the whole harvest or bulk of harvest takes place.

Utilization

• Cereals: Data are on individual country’s marketing year basis.

Trade

• Trade between European Union member states is excluded - unless otherwise stated.

• Wheat: Trade data include wheat flour in wheat grain equivalent. The time reference period is July/June - unless otherwise stated.

• Coarse grains: The time reference period is July/June - unless otherwise stated.

• Rice, dairy meat and fish products : The time reference period is January/ December.

• Oilseeds, oils/fats and meals: The time reference period is October/ September - unless otherwise stated.

Stocks

• Cereals: Data refer to carry-overs at the close of national crop seasons ending in the year shown.

Price indices

• The FAO price indices are calculated using the Laspeyres formula; the weights used are based on the average export value of each commodity for the 2014-2016 period.

COUNTRY CLASSIFICATION

In the presentation of statistical material, references are made to special country groupings: Low-Income Food-Deficit Countries (LIFDCs) - Least Developed Countries (LDCs). The LIFDCs include 51 countries that are net importers of basic foodstuffs with per caput income below the level used by the World Bank to determine eligibility for International Development Aid (IDA) assistance (i.e. USD 1 945 in 2011). The LDCs group currently includes 47 countries with low income as well as weak human resources and low level of economic diversification. The list is reviewed every three years by the Economic and Social Council of the United Nations.

DISCLAIMER

The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal status of any country - territory - city or area or of its authorities - or concerning the delimitation of its frontiers or boundaries.

Ocean freight rates

International Grains Council (IGC)

OCEAN FREIGHT MARKET (MAY 2022 – OCTOBER 2022)

Despite generally buoyant trade in grains and oilseeds, as well as challenging logistics in some areas, freight rates for the transportation of dry bulk commodities took a significant step down over the past six months, as geopolitical tensions, export restrictions and global recessionary fears weighed on market sentiment and curbed chartering activity.

The dry bulk freight complex witnessed volatile demand over the past six months, with market sentiment often shaped by macroeconomic conditions, as well as geopolitical factors, including the ongoing Black Sea conflict and fears of potentially escalating tensions between China and the United States of America.

Amid hostilities between the Russian Federation and Ukraine, freight rates in the second half of 2022 were buoyed by a broad-based increase in dry bulk journey length and times, especially for Capesize and Panamax carriers, as some trade flows were re-directed owing to international sanctions and difficulties sourcing supplies from the region. This included a partial shift in purchases of grains and oilseeds from Russia and Ukraine to the Americas, as well as increased coal deliveries from Australia and South Africa to Europe. Coal exports from South Africa to the European Union rose nearly six-fold year-on-year during the first nine months of 2022, also signalling growing demand for alternative energy supplies amid surging gas prices. More broadly, world seaborne coal trade over the same period was estimated to be 3 percent higher year-on-year, at around 890 tonnes, marking a recovery to pre-COVID-19 levels.

Nevertheless, with mounting worries about worsening global economic conditions, and the associated uncertain outlook for seaborne trade, average time charter rates posted a sizable drop in the past six months, as reflected by the benchmark Baltic Dry Index (BDI), which has contracted by more than one-fifth since late-April 2022. After peaking at a five-month high in late-May, the composite indicator subsequently fell markedly, to its lowest level in more than two years by the end of August. Although markets saw some improvement in the period since, values remain subdued, with the Index down by 59 percent year-on-year as at late-October, including steep annual declines in all constituent sectors.

Significant logistics-related developments during the six-month period included the late-July deal to establish safe corridors for seaborne grain and oilseed exports from Ukraine, and the subsequent resumption of shipments from three Black Sea ports – Odessa, Chornomorsk and Pivdennyi. This had an overall positive impact on the market, although observers highlighted the reluctance of some vessel owners, especially of larger-sized carriers, to commit to business in the region because of perceived conflict-related risks.

In the past several weeks, the attention of the market was also focused on worsening bottlenecks across the United States Midwest, where low water levels on the main Mississippi river hampered barge movements to export terminals at the Gulf.

Calculated total costs on key grain and oilseed routes (including fuel expenses), which are tracked by the International Grains Council (IGC) Grains and Oilseeds Freight Index (GOFI), also saw a sizable net decline since April. While values slipped by one-quarter over the period, the annual drop was relatively smaller compared to the BDI, in part owing to firmer bunker prices. Steep losses were recorded at all underlying origins, although voyage rates out of the Black Sea region were seen as highly indicative, with trade sources citing significant risk premiums for local deliveries.

While prospects for seaborne trade remain hazy against a poor macroeconomic backdrop, some positivity stems from an envisaged rebound in Chinese mineral demand following the removal of COVID-19-related measures. Furthermore, the implementation of new rules from the International Maritime Organization, which seek to reduce greenhouse gas emissions, is expected to slow the supply of new vessels in the medium term, while potentially triggering increased demolition rates for non-compliant ships.

Movements across Panamax, Supramax and Handysize vessel segments – commonly associated with deliveries of grains and oilseeds as well as bulk commodities, such as coal, sugar and fertilizer – were broadly consistent during the past several months. With initial falls followed by a moderate rebound, average rates contracted by one-third in the period since late-April. Consequently, values were less than half their year-earlier levels.

Reduced enquires at the United States Gulf and in South America amid relatively soft demand from China – the world’s major importer of dry bulk commodities – contributed to declines in vessel hire rates during the summer months. Bearish influences also included India’s move to raise export taxes on iron ore pellets and some steel products, following earlier bans on wheat and sugar shipments. Subsequent restrictions on a few rice shipments were also negative for fixing activity. Variable enquiry levels were also reported in other parts of Asia during that period, albeit as Australia and the northern Pacific benefited from robust grains and oilseeds-related trade.

Aided by softening marine fuel prices, vessel earnings across the three segments moved higher in September, while markets welcomed news of the easing of pandemic-induced restrictions in parts of China. Participants noted accelerating Chinese imports of coal amid surging demand for air-conditioning and the need to compensate for reduced hydropower generation resulting from hot and dry weather in some regions. However, concerns persisted about the country’s zero-COVID-19 approach, coupled with broader worries about the state of the domestic property sector. Active coal purchases by India in the run up to its late-September festive season were also notable, especially from Indonesia and Russia, with record accumulated January–September volumes from both origins.

Supramax and Handysize markets drew additional support from strong early-season demand for grain deliveries out of Europe amid disrupted Black Sea supplies. Further underpinning came from a recent upturn in activity out of Argentina, owing to surging soybean sales following the introduction of a temporary special exchange rate for local growers, as well as solid maize shipments from Brazil.

Average Capesize rates fared better compared to other dry bulk segments, the corresponding Baltic sub-Index up by a net 10 percent since late-April. Concerns about growth prospects in China pressured market sentiment in the first half of the period, but resurgent iron ore trade, paired with vessel supply tightness in some loading areas and spells of adverse weather in the Pacific Basin, provided support to rates more recently.

Global food import bill set to increase at a slower pace in 2022, nevertheless to another record level

Contributed by Josef Schmidhuber and Bing Qiao

Higher international food prices set to lift the global food import bill (FIB) to a record USD 1.94 trillion in 2022, but growth foreseen to slowdown from the previous year.

The world food import bill is forecast to reach another all-time high in 2022, surpassing USD 1.9 trillion. While this represents another increase by 10 percent, or USD 180 billion, over last year’s record level, the expansion is foreseen to slow significantly compared to the 18-percent increase registered in 2021 relative to 2020 (Table 1). The anticipated slowdown in growth in 2022 reflects higher world food prices and depreciating currencies against the United States dollar, all of which are expected to weigh on the purchasing power of importers and subsequently on the quantity of imported foods.

Overall, in 2022, high-income countries (HICs) and upper-middle-income countries (UMICs) are expected to account for 85 percent of world expenditures on imported food and over 80 percent of the growth in these expenditures. The bulk of the increase in the food import bill is expected to be cost-driven, reflecting record international food prices that come on the back of surging input prices as well as disrupted food supply chains. Imports by low-income countries (LICs) are expected to become increasingly responsive to higher prices; their volumes are forecast to come to a standstill in 2022.

Higher import bills do not translate into higher inflows for vulnerable countries.

Decomposing food import bills to ascertain the extent to which changes in prices and volumes drive changes in expenditures at the global level, the anticipated increase in the 2022 import bill is almost entirely on account of higher prices, with USD 157 billion due to higher international prices and merely USD 27 billion reflect higher volumes[1] (Table 2). The upshot is that higher import bills mainly reflect higher unit costs rather than higher volumes, with many regions or country groups set to face higher bills in return for lower or the same volumes. Worryingly, this development is much more pronounced for some economically vulnerable country groups. Sub-Saharan Africa, for instance, is expected to spend USD 4.8 billion more on food imports but to see a decline in volumes worth USD 0.7 billion. Similarly, least developed countries (LDCs) are expected to see an expansion in their food import bill by USD 4.9 billion fully on account of higher prices. As for net food-importing developing countries (NFIDCs), they are forecast to face USD 21.7 billion in extra costs for merely USD 4 billion of extra imported food volumes. The aggregate food import bill for LICs is expected to remain unchanged in value terms but could shrink by as much as 10 percent in volume terms, highlighting growing accessibility issues for such countries. These are alarming signs from a food security perspective, indicating importers are finding it difficult to finance rising international costs, potentially heralding an end of their resilience to higher international prices.

High-income regions account for most ofthe growth in the world import bill for all foodstuffs, while low-income countries focus on imports of staple food items

From a food group perspective, existing differences across importing regions are likely to become more pronounced in 2022. While high-income countries continue purchasing across the entire spectrum of food products, the expenditures of developing regions will be increasingly concentrated on importing staple foods. Unsurprisingly, the share of imported staple foods in the total FIB rises with lower income levels; staple foods account for 19, 37, 43 and 46 percent of the total FIBs for HICs, UMICs, lower-middle-income countries (LMICs) and LICs, respectively.

Overall, 2022 may usher in an era of less resilience to higher food prices, notably in poorer regions. In response to these developments, FAO has proposed a Food Import Financing Facility (FIFF), which would provide balance-of-payments support to low-income, highly food import-dependent countries to ease their access to international food markets. The approval of a “Food Shock Window” by the International Monetary Fund (IMF) presents an important and welcome step towards easing the burden of higher imported food expenditures among LICs.

[1] There is a negative “mixed effect” of USD 4 billion in the decomposition of the overall change in the global food import bill (FIB). This explains the difference between the overall increase in the global FIB of USD 180 billion and the sum of the price and quantity effect of USD 157 billion plus USD 27 billion.

Agricultural input import bills

Contributed by Josef Schmidhuber and Bing Qiao

Higher international prices of most agricultural inputs could lift global expenditures on imported inputs to USD 424 billion in 2022, leaving a heavy burden on lower income countries

The world agricultural input import bill (IIB) is forecast to reach a total of USD 424 billion in 2022[1], representing a leap of 48 percent or USD 138 billion over the total reached in 2021 (Table 1). Relative to 2020, the 2022 IIB is projected to rise by as much as 112 percent, albeit from a depressed level of USD 200 billion, owing to lower overall imports during the near ubiquitous trade contractions caused by the COVID-19 pandemic. Higher bills for imported inputs now add to rising food import bills for many low-income countries and, together with a rising US dollar exchange rate, further aggravate existing balance of payments problems.

Higher costs for imported energy and fertilizer are the main drivers behind the soaring global IIB in 2022. These two inputs accounted for well over 75 percent of the overall world bill in the past and are likely to reach a new record of 86 percent in 2022. Fertilizer and energy are particularly important items in the import bills of low-income countries (LICs) and lower middle-income countries (LMIC), accounting for 92 and 91 percent of total imported inputs, respectively.[2] Saddled with higher costs of fertilizer and energy imports, these countries may be forced to cut down on the use of imported inputs, and, where domestic substitutes are not available, will eventually reduce input applications overall. Reduced use of inputs would almost inevitably result in lower agricultural productivity, potentially resulting in lower domestic food availability.

Higher import bills do not translate into higher product inflows

The decomposition of changes in the IIB between 2022 and 2021 shows that price effects dominate volume effects at the global level, meaning that countries around the world are encumbered with higher costs for imported inputs without necessarily receiving higher quantities – they pay more for imported inputs in 2022 while receiving lower volumes than in 2021 (Table 2). While this is a near ubiquitous development, the price effect is less pronounced for LICs, where higher prices account for “only” 67 percent of the respective overall increase in their IIB. This could signal the beginning of a more general slowdown in the demand for imported agricultural inputs.

Pesticides are an exception, especially in sub-Saharan Africa (SSA), where volume effects invariably outweigh price effects, indicating that countries are getting more of the input at the same price. For sub-Saharan Africa, a plausible explanation for the buck in trend is the upsurge of desert locusts, resulting in international purchases of subsidized pesticides. No discernible global trend emerges for seeds, which constitute a minor cost in the import schedule of many countries.

Energy and fertilizer prices are up in tandem – and likely in 2023

Energy, in the form of natural gas, is a key feedstock in the production of nitrogenous (N) fertilizer, where soaring gas costs have driven up N fertilizer prices in the first semester of 2022 by more than 300 percent relative to the levels that prevailed in 2020. With high and inelastic demand for natural gas and little prospects for abating supply shortages, high world fertilizer prices are likely to extend into 2023, with negative repercussions for global agricultural output and food security.

[1] The latest decline in energy prices in general, and those for natural gas in particular, may not fully captured in the input import bills of 2022.

[2] For high and upper-middle-income countries, almost 55 percent of the increased IIB stems from higher fertilizer imports. This compares to 26 and 10 percent for lower-middle and low-income countries, where the increased IIB is dominated by energy imports.

Food price indices

The FAO Global Food Consumption Price Indices[1]

The FAO Global Food Consumption Price Indices (FGFCPIs)[2] track monthly changes in the international prices of a basket of food commodities. The FGFCPIs include the five food commodity groups that comprise the FAO Food Price Index (FFPI) as well as oilseeds and fish among their components. Aside from their comparatively broader commodity coverage, the FGFCPIs differ from the FFPI in that they weigh the individual commodity groups that compose them by their respective contribution to average global caloric intake (Calorie-base FGFCPI) or to average protein uptake (Protein-base FGFCPI) during the 2014–2016 base period. These weights are derived from the FAO food balance sheets (FBS) (http://www.fao.org/faostat/en/#data/FBS).

The Calorie-base FGFCPI reached an all-time nominal high of 157.7 points in May 2022, before easing in a downtrend akin to that of the FFPI. By September, the Calorie-base FGFCPI stood 14.2 percent below its May value at an average of 135.2 points. The fall registered by the Index between May and September 2022 was primarily driven by a 20-percent reduction in wheat prices and a 33-percent retreat in those of vegetable oils, although quotations of all commodities encompassed by the Index were down since May, with the exception of rice and selected meats. Yet, at its September level, the Calorie-base FGFCPI remained 6.8 percent above its already elevated value a year earlier. This relative strength has been largely the result of persistently high grain and vegetable oil prices, although the recovery that rice quotations have registered this year has also contributed.

The Protein-base FGFCPI has followed a similar trajectory to that of its calorie counterpart, peaking in May 2022 at an average of 150.5 points to then fall, largely due to declines in grain, oilseed and fish prices. However, at a September average of 135.5 points, the Protein-base FGFCPI has exhibited more resilience to downward pressure than its sister indices, showing a 10.0 percent retreat since May and remaining some 12.4 percent above its year-earlier value. This tendency reflects some offsetting effects of price movements of other important sources of protein. This is namely the case of poultry and pig meat quotations, which have edged up by 1.7 and 3.5 percent, respectively, since May, but also of dairy prices, which have shown a modest decline of just 1.1 percent over this period. This more resilient propensity of the Protein-base FGFCPI has effectively closed the 3-13 point gap between it and its sister FFPI and calorie-base FGFCPI benchmarks, thereby resulting in the September values of the three indices essentially converging for the first time since early 2020.

FAO Food Price Index virtually unchanged in October, with higher world cereal prices almost offsetting lower prices of other food commodities

The FAO Food Price Index[3] (FFPI) averaged 135.9 points in October 2022, virtually unchanged from September, with the price indices of all the covered commodity groups, except cereals, down month-on-month. An upturn in the Cereal Price Index countered drops in the indices for vegetable oils, dairy, meat and sugar. With the latest updates, the FFPI has dropped 23.8 points (14.9 percent) from its peak in March this year, but remained 2.7 points (2.0 percent) above its value in the corresponding month last year.

The FAO Cereal Price Index averaged 152.3 points in October, up 4.4 points (3.0 percent) from September and 15.2 points (11.1 percent) above its value a year ago. International reference prices of all the major cereals were up month-on-month. World wheat prices rose by 3.2 percent, mostly reflecting the continued uncertainties of the Black Sea Grain Initiative. Tighter supplies in the United States of America, following a downward production revision, also contributed to the firmer tone in markets. International prices of coarse grains increased by 3.5 percent month-on-month, led by a 4.3-percent rise in world maize prices. The maize price increase was underpinned by lower production prospects in the United States of America and the European Union, along with dry planting conditions in Argentina and uncertainty about the continuation of Ukraine’s exports. International sorghum prices also increased by 3.0 percent in October, influenced by the strength in maize prices. Meanwhile, world barley prices increased only marginally (0.3 percent), with higher global supplies stemming from better production prospects in the European Union helping to cap price gains. International rice prices remained on an uptrend in October, as the bulk of new crop arrivals were still forthcoming in Asia, although limited the monthly price increase to 1.0 percent.

The FAO Vegetable Oil Price Index averaged 150.1 points in October, down 2.4 points (1.6 percent) month-on-month and standing nearly 20 percent below its year-earlier level. The continued decrease of the index was driven by world lower prices of palm, soy and rapeseed oils, which more than offset higher sunflowerseed oil quotations. In October, international palm oil prices declined slightly from the previous month, broadly weighed by lingering heavy stock levels in Southeast Asia, despite concerns over unfavourable weather prospects in pockets of major growing regions. Meanwhile, world soy and rapeseed oil quotations dropped on outlooks of ample supplies in the coming months. By contrast, international sunflower oil prices rebounded moderately after falling continuously over the past half a year due to uncertainty over the future of the export corridor in Ukraine amid rising geopolitical tensions.

The FAO Dairy Price Index averaged 140.1 points in October, down 2.5 points (1.7 percent) from September, marking the fourth consecutive monthly decline, nevertheless, it remained 18.7 points (15.4 percent) above its value a year ago. In October, international prices of all dairy products covered by the index fell. Lower-than-anticipated purchases by China and lacklustre demand for spot supplies as most importing countries were well covered for their immediate needs, together with the impact of the weaker Euro against the United States dollar, underpinned the drop in world dairy prices. Market uncertainty about the direction of demand for dairy products, due to soaring inflation and economic downturns, also pressured international dairy prices down. Nonetheless, demand for some dairy products in other countries in Asia increased, containing potential larger declines in dairy prices.

The FAO Meat Price Index[4] averaged 118.4 points in October, down 1.6 points (1.4 percent) from September, marking the fourth consecutive monthly decline, with world prices of all meat types registering drops. However, the index remained 6.4 points (5.8 percent) above its value a year ago. International ovine meat prices registered the steepest drop, underpinned by the impacts of currency movements and seasonally increasing supplies from Oceania amid subdued import purchases. Likewise, world pig meat prices dropped substantially on weak global import purchases in tandem with softer internal demand in some leading producing countries. Meanwhile, world bovine prices fell slightly on high current supplies and rising availability of slaughter cattle, notably in Brazil. International poultry meat price downward trend continued for the fourth consecutive month, as export availabilities outpaced subdued global demand, notwithstanding setbacks to production stemming from avian influenza outbreaks and high feed costs.production expansions remained weak due to high feed costs and avian flu outbreaks, especially in Europe. World ovine meat prices also increased slightly on continued supply limitations from Oceania due to high demand for flock rebuilding.

The FAO Sugar Price Index averaged 109 points in October, down 0.7 points (0.6 percent) from September and 10.1 points (8.5 percent) from its value in the corresponding month last year. The positive global supply outlook for the 2022/23 season, further bolstered by improved production prospects in India, weighed on world sugar prices in October. However, concerns over rains hampering harvest progress in Brazil and delaying the start of the season in India limited the month-on-month price decline. Additional support that prevented world sugar prices from dropping further was lent by a stronger import demand, particularly from Indonesia and China, along with higher ethanol price quotations in Brazil, prompting a greater use of sugarcane to produce ethanol.

[1] All changes referred to in this section, in absolute or percentage terms, are calculated based on unrounded figures.

[2] The FAO Global Food Consumption Price Indices are published twice a year in Food Outlook.

[3] The FAO food price index and its sub-indices are updated on a monthly basis and are available on: http://www.fao.org/worldfoodsituation

[4] Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.