Global Imported Food Prices Hit Record High... Concerns Over 'Agflation'

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] The prices of imported food are soaring rapidly. Concerns about 'agflation,' where the sharp rise in agricultural product prices pressures overall inflation, are growing.

According to the food outlook report released on the 11th (local time) by the United Nations Food and Agriculture Organization (FAO) at its Rome headquarters, the total global food import value this year is expected to reach $1.75 trillion (2,063 trillion KRW). This is a 14% increase from last year, marking an all-time high.

It is also about 12% higher than the figure projected in June. This is due to the significant rise in imported food prices in some countries, especially in the second and third quarters.

The report forecasts that food import values will increase by 11% in developed countries this year. In developing countries, the increase is expected to be close to 20%, and even higher in low-income countries.

Global food trade, which was hit by the COVID-19 pandemic, is recovering along with the economic recovery.

However, the sharp rise in imported food prices is expected to bring greater hardship to low-income food-deficient countries already suffering from COVID-19 and rising energy prices.

FAO projected that food prices will inevitably and promptly rise along with increased production costs, Bloomberg reported.

Last year, adverse weather caused grain prices to surge, and global supply chains were hit by rising shipping costs and labor shortages. As energy shortages worsened, fuel prices rose, leading to a chain reaction including fertilizer price increases.

Future production outlooks vary by item.

Grains such as corn and rice are expected to have record harvests next year. However, FAO anticipates that consumption for food and animal feed will increase at a faster pace.

The supply of oilseeds (seeds from which oil can be extracted) and related products will improve somewhat, but year-end stock levels are expected to remain below average.

Sugar production, which had declined over the past three years, is expected to rebound by next year but will still fall short of consumption. Global sugar trade is projected to slightly decrease due to reduced exports from major countries and rising prices.

Meat production this year is expected to increase as pork production rises in China.

This content was produced with the assistance of AI translation services.