Favorable macroeconomic conditions, including steady global economic growth and lower food commodity prices, are driving the outlook
Supplies of most of the world’s major food commodities are expected to be adequate in 2024-2025, although extreme weather, rising geopolitical tensions, sudden policy changes and other factors could all upend the delicate balances between global supply and demand and affect prices. And global food. Security, according to a new report issued by the Food and Agriculture Organization of the United Nations (FAO).
The latest FAO Food Outlook, a semi-annual publication, provides updated forecasts for the production, trade, use and stocks of major staple foods.
On the production side, global rice and oilseed production is expected to reach record levels, while wheat and maize production are likely to decline modestly. The Food Forecast provides detailed market assessments for wheat, coarse grains, rice, oil crops, sugar, meat, dairy and fisheries.
Food bill is rising
The Food Outlook also provides FAO’s preliminary estimates of the global food import bill in 2024, which is expected to rise by 2.5 percent to exceed $2 trillion. These forecasts are due to relatively favorable macroeconomic conditions, including steady global economic growth and low food commodity prices.
The new edition of the report contains a special chapter on the dynamic effects of shocks to shipping costs on the food import bill – a subjective variable given the fluctuations caused by conflict on the Black Sea and Red Sea routes and by the effects of drought on the Panama Canal. The analysis shows that these shocks have a positive impact on the value of the First Investment Bank in the short run, with a greater impact on the group of net food importing developing countries.
The Food Outlook also includes a special chapter focusing on fertilizers, providing a comprehensive review of global fertilizer trade between 2021 and 2023 and short-term market forecasts for 2024-2025.
The article explains that in April 2024, fertilizer prices as displayed by the nitrogen, phosphorus and potassium price basket averaged $327 per ton, compared to $815 in April 2022. As prices fell, fertilizer trading volumes rebounded as nitrogen trading closed. To its level in 2021.
Overall, the short-term outlook for fertilizers points to stabilization over the next six months, according to the FAO, with improved availability and affordability across the three main components. Future shocks to global fertilizer markets are likely to be determined by developments in energy markets for geopolitical or other reasons.
What the latest forecasts say
wheat
Global wheat markets are expected to contract in 2024-2025, with global wheat production, use, trade and stocks expected to fall below 2023-2024 levels. However, abundant supplies and lower demand for feed and other uses globally are likely to maintain a weak tone in wheat markets.
Coarse grains
The outlook for global coarse grains markets points to another season of abundant supplies, with stocks expected to reach their highest level since 2017-18. International trade in coarse grains is likely to decline in 2024-25, with lower export availability expected in Brazil and Ukraine and weak import demand from China.
rice
International rice prices remained high amid continued export restrictions and aggressive purchases by some Asian countries. However, early forecasts for 2024-25 suggest global production will reach a new peak, which could revive rice use growth and push stocks to a record high.
Meat
Global meat production is expected to expand marginally in 2024, driven by increased poultry meat production, despite potential negative impacts from extreme weather events, the spread of animal diseases and slim profit margins. At the same time, global meat trade is likely to rebound as demand is expected to exceed domestic supplies in major meat-importing countries.
sugar
Improved global supply prospects for the 2023-2024 season led to significant declines in global sugar prices. Due to lower sugar prices, global sugar consumption is expected to expand above its recent trend. Global trade in sugar is expected to expand, amid abundant export availability and increased global demand for imports.
Oil crops
In 2023-2024, forecasts for record global production of oilseeds and meals/cakes are expected to build further oilmeal inventories, while a projected marginal increase in oil/fat production, amid lower-than-potential palm oil productions, could It was overtaken by the growth of consumption, which led to a somewhat narrowing of the global balance between supply and demand for vegetable oils.
Dairy
Global milk production is expected to reach about 979 million tons in 2024, up 1.4 percent from 2023. Asia will continue to lead production growth, driven by rising numbers of dairy cows and increasing contributions from large-scale dairy farms. At the same time, global trade in dairy products is expected to rebound moderately despite an expected lower import demand in some major importing countries.
Fisheries
In 2024, stable landings from capture fisheries are expected to complement the expansion of the aquaculture sector. Stifling public demand, coupled with increased supply of some types of aquaculture, has led to lower prices for some aquatic products. Overall, rising production costs and stagnant consumer spending remain a challenge.
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