AMSTERDAM: The world’s food import bill may reach a five-year low in 2015, driven by a decline in international prices, low freight rates and a strong dollar, the United Nation’s Food and Agriculture Organisation (FAO) said on Thursday.
Global cereal production is likely to decline by 1.5% from last year’s record output but the impact will be “cushioned by exceptionally high levels of existing stocks”, according to forecasts in the Food Outlook report released by FAO.
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FAO forecasts global cereal production in 2015 at 2.5 billion tonnes, lower than last year, but nearly 5% higher than the average of past five years.
The driving factor behind the lower food import bill is the slump in commodity prices due to large supplies, FAO said.
FAO’s Food Price Index slid further in April by 1.2% from March, reaching 171 points, its lowest level since June 2010 and 19.2% lower than a year ago.
Except for meat, prices of all other commodities tracked by the index, including cereals, sugar, dairy and oils, declined further during the past month.
“Several years of solid harvests and stockpiling mean most basic food commodities are in surplus. As a result, the projected drop in cereals output is not expected to impact availability of food for consumption,” the UN body said in a statement.
Sugar production is expected to increase only slightly, it added, driven by India, the European Union and Australia, but will surpass consumption for the fifth consecutive season.
FAO’s latest estimates do not augur well for Indian farmers who have been battered by low prices of key crops like rice, wheat and sugar, alongside weather uncertainties during the 2014-15 crop season.
