Imported food proves expensive for poor countries

July 12, 2018

A United Nations Food and Agriculture Organisation report has brought out an eye opening report about how the cost of importing food is weighing increasingly heavily on the world’s poorest countries. In fact since 2000 the food import bill has risen fivefold for countries that are suffer from food shortages, while it has roughly tripled globally to reach $1.43 trillion in 2017 and is set to rise again this year.

This year the global food import bill may rise by around 3 per cent to about $1.47 and this maybe because of greater international trade in fish, notably seafood – costly foods mostly imported by developed countries – and cereals, a staple that is an essential import for many poor countries, the report said.

Currently the food import bill is at 28 per cent of all merchandise export earnings for the group of least-developed countries – almost double the share of 2005. This compares with some 10 per cent of export earnings spent on food imports by developed countries, which also have higher GDP per capita.

Food imports have been in the double-digits for the vast majority of the poorest countries and since 2000 have risen at an annual global average rate of 8. And the share of cereals imported compared to higher-value foods has not fallen in poorer countries, in stark contrast to wealthier ones, where it has dipped sharply.

According to FAO, strong worldwide urbanisation trends and growing health awareness” as well and “robust wholesale prices” in developed countries point to ample commercial potential for minor tropical fruit exporters in low-income countries. The global output value of these fruits – 86 per cent of which are produced in Asia – was around $20 billion last year. Only around 10 per cent of minor tropic fruits production is currently traded across borders, mostly within Asia – with Thailand a major exporter. Guava is the largest fruit in this category, along with jackfruit, longan, lychee, durian, rambutan and passion fruit, mostly grown in Brazil, and mangosteen,

However, capitalising on this trade opportunity for poorer countries will take innovation in handling perishability, assurance of supply, price volatility and compliance with phytosanitary certification requirements.

Food markets have remained relatively stable thanks to generally good supply conditions across most categories, they remain vulnerable in light of recent rising trade disputes and the potential for weather and other shocks.

In the cereals sector, 2018/19 trade is expected to remain robust, supported by continued strong import demand for nearly all major cereals.

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