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Cheaper coffee, oilseeds and shipping costs mean the world’s food import bill is expected to fall for the first time in four years.
The cost of buying food from abroad may drop 2.5% to $1.47 trillion this year, according to the the United Nations’ Food & Agriculture Organisation. The FAO doesn’t forecast increases for any of the main food groups and coffee, tea, cocoa and vegetable oil prices are expected to fare worst.
Lower bills would be good news for consumers who’ve paid more for food in recent years, helping to push up inflation. Costs are now coming down as coffee to grains are pressured by abundant supplies and trade tensions. At the same time, commodity freight costs have fallen almost 50% from a July peak amid concerns about worsening prospects for global economic growth.
“Lower unit costs of importing food are likely to offset an expansion in global demand for many foodstuffs, implying that in 2019, more food can be purchased nominally for the same or lower cost,” the FAO said in a report Thursday.
Coffee futures have reached the lowest in more than a decade in New York as the market grapples with a global glut. The Baltic Dry Index, a measure of commodity shipping costs, reached a more than two-year low in February. Still, it’s a mixed bag for some of the poorest nations, where import bills will range from 3% declines to gains of 4%. Those countries are likely to need to import more grains because of poor production prospects. The dependence on cereal imports could reach 35% of the total food bill for least-developed countries and those in sub-Saharan Africa, the FAO said.
The food import bill for last year was revised to $1.51 trillion, the FAO said. Costs peaked at $1.52 trillion in 2014.
