Market indicators and food import bills

At the global level, expenditures on imported foodstuffs in 2006 could reach a historic high of US$383 billion, over 2 percent more than the level of the previous year. This expectation is based on the realization of current forecasts for commercial food trade and prices for 2006. Rising freight rates in 2006 are incorporated in the import bill forecasts.

On a product basis, Figure 4 shows that the cost of imported sugar, cereals and vegetable oils are expected to be larger, with sugar registering the strongest increase, up 16 percent from the previous year. Higher international prices for these commodities have been the main factor in driving global food import bills upward. By contrast, the value of meat and dairy imports is anticipated to fall because of declining prices and import quantities.

Import bills for developing countries are now anticipated to rise by almost 5 percent from 2005, while for the 82 LIFDCs, expenditures on imported foodstuffs are set to increase by around 3 percent; slightly more than the global average. Regarding the more economically vulnerable countries, Figure 3 shows that LDC food import bills (indexed) in 2006 would be 58 percent higher than they were in 2000. This compares with 19 percent growth in the bills of developed countries.

That the foreseen rise in import bills is largely fuelled by higher international prices of cereals and sugar comes to the dismay of many developing countries that rely on the international market to meet their staple food needs. Indeed, the rise in the bills of these products was mainly caused by the increase in their prices rather than by an increase in the actual volumes of their food imports. Moreover, many countries are anticipated to reduce purchases, not always in response to their own improved domestic supplies but rather because of the high international prices. To further add to the plight of many of the poorer developing countries, higher energy costs as indicated by the CRB energy index, suggest they may need to curtail expenditures on imported staples to sustain their fossil fuel needs.

Forecast import bills of total food and major foodstuffs (US$ million)