2023-06-24 22:43:04
Dear Editor, Global food imports are hitting a new record. This was reported by the latest FAO report which indicates a total volume of purchases equal to almost two trillion dollars and an increase in the order of 1.5 percent compared to last year. However, the gap between developed and developing countries widens: while the former expand their imports, the latter decrease them significantly and this trend particularly involves net food importing countries which contract their flows by almost 5 %. This means that their purchasing power is weakening. Estimates also suggest a probable increase in production for most agricultural goods. But the global production of wheat – a fundamental cereal – could decrease, also due to extreme weather phenomena as already reported in Russia and Australia for example. All of this tells us once again that agricultural and food systems are highly vulnerable to shocks caused by climate and geopolitical tensions.
We know it well even at home. A few days ago, Istat analyzed the trend of the agricultural economy of our country, highlighting some data that deserve attention. Added value and the volume of production are decreasing, but it must be said that drought and rising production costs are putting agricultural systems in difficulty everywhere. In European countries, the drop in production was around three points against an increase in prices that came close to 23 percent compared to the previous year, with growth even exceeding 40 percent in Poland and Hungary, and above 30 percent in Germany. Looking wider, food inflation remains high for more than 66 percent of low-income countries, more than 81 percent of lower-middle-income countries and 77 percent of upper-middle-income countries. Realities such as Venezuela, Lebanon, Zimbabwe and Argentina are reckoning with even triple-digit increases.
The fact is that climate and food inflation hold much more than you think. Climatic conditions will increasingly influence the trend in food prices and it is no coincidence that the World Bank reports that the prediction of the El Nio phenomenon could lead to record temperatures that risk further limiting crops, particularly in the southern hemisphere. Furthermore, several export bans implemented recently due to ongoing geopolitical tensions have not helped, and twenty countries are still reported to implement around thirty specific blocks on food exports. Any restriction in this sense only makes the situation worse.
Certainly, the current trend in the exchange rate of currencies, in particular the dollar, also weighs on the trend of food inflation. And the attention raised for some realities regarding the influence of profits on food inflation should not be underestimated. What is certain is that having to spend more to buy less food primarily compromises low-income families, the most fragile and vulnerable people, wherever they are. Despite the drop in prices internationally, we still do not see a decrease in food inflation, just a slowdown in the pace of increases. Far too little not to have to keep the attention high and above all the action on this front.
FAO Deputy Director-General
June 24, 2023, 10:42 pm – edit June 24, 2023 | 10:42 PM
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