The cost of coffee, tea and cocoa has caused the global food import bill to skyrocket to $2 trillion
Every two years reportfocuses on developments affecting global food and feed markets, highlighting that higher costs of cocoa, coffee and tea are driving the increase, while differences in bills Imports persist across income levels.
Cocoa prices increased nearly 4 times the 10-year average Earlier this year, coffee prices nearly doubled and tea prices were 15% higher than long-term levels.
Together, these items are responsible for more than half of the expected increase in global food import spending. FAO economists predict will increase nearly 23% by 2024.
National disparities
While high-income countries, which account for two-thirds of total global food import spending, will increase by 4.4%, low- and middle-income countries’ import spending is expected to decline. .
Lower-income countries may see a slight decline in grain and oilseed costs, although per capita food intake from wheat and coarse grains is expected to decline, in contrast to The predicted increase in rice consumption is 1.5%.
FAO emphasizes the important role of food exports in supporting many economies.
For example, income from coffee exports can offset nearly 40% of the cost of food imports in Burundi and Ethiopia, while Côte d’Ivoire’s cocoa exports completely offset its food import bill. . Similarly, tea exports account for more than half of Sri Lanka’s import costs.
Mixed forecast
FAO forecasts show a mixed picture for global food production and trade.
Wheat and coarse grain production is expected to decline but remain above consumption levels, while Rice production is set for a record harvest in 2024/25 could enable increased global rice consumption, storage and international trade.
Meat and dairy production are forecast to grow modestly while global seafood production is expected to increase 2.2%, driven by aquaculture.
Meanwhile, vegetable oil consumption may exceed production for the second consecutive season, leading to reduced inventories.
The report warns that Extreme weather, geopolitical tensions and policy changes can destabilize production systems, further straining global food security.
Olive oil prices skyrocket due to climate stress
Special focus on olive oil price increases due to climate-related production declines.
Compost made from a mixture of hollow pine cones and cow dung helps olive trees grow sustainably.
In Spain, the wholesale price of cold-pressed extra virgin olive oil reached nearly 10,000 USD/ton in January 2024, nearly triple their 2022 level.
High temperatures force olive trees to conserve water for core functions instead of fruit production, resulting in cut nearly 50% of output in two years consecutive.
Although Spain’s next harvest is expected to exceed the 10-year average, high prices could limit global consumption.
The report notes that manufacturers should consider more sustainable land and water management practices.
FAO economist Di Yang said that because of the huge potential to expand olive oil exports, governments could provide support to olive growers, such as insurance programs and other measures. control the spread of disease.
Fertilizer is cheaper…mostly
The report also highlights one Fertilizer prices fall 50% from 2022 peak due to falling natural gas prices and reduced trade barriers.
However, FAO economist Maria Antip noted that phosphate fertilizer has bucked this trend, as ongoing trade barriers and geopolitical tensions pose risks to future supplies, especially especially in Latin America and Asia.
Additionally, the report highlights the potential of low-carbon ammonia, a key component of nitrogen-based fertilizers, as a sustainable alternative.
However, although using renewable energy instead of natural gas is feasible and investments to do so are underway, scaling up production will require incentives. Targeted incentives to offset higher production costs and encourage farmer adoption.
