The UN Food and Agriculture Organization (FAO) noted in a press release from yesterday that, "The latest Food Outlook indicates that the food import bill of the Low Income Food Deficit Countries (LIFDCs) is expected to reach US$169 billion in 2008, 40 percent more than in 2007. FAO calls the sustained rise in imported food expenditures for vulnerable country groups 'a worrying development,' and says that by the end of 2008 their annual food import basket could cost four times as much as it did in 2000.
Food Prices
The UN Food and Agriculture Organization (FAO) noted in a press release from yesterday that, "The latest Food Outlook indicates that the food import bill of the Low Income Food Deficit Countries (LIFDCs) is expected to reach US$169 billion in 2008, 40 percent more than in 2007. FAO calls the sustained rise in imported food expenditures for vulnerable country groups 'a worrying development,' and says that by the end of 2008 their annual food import basket could cost four times as much as it did in 2000.
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"International prices of most agricultural commodities have started to decline, but they are unlikely to return to the low price levels of previous years, Food Outlook reports. The FAO food price index has remained stable since February 2008, but the average of the first four months of 2008 is still 53 percent higher when compared to the same period a year ago."
And Reuters writers Robin Pomeroy and Brian Love reported yesterday that, "In a 10-year look-ahead at likely food price scenarios, to be published next week, the FAO and the Organization for Economic Co-operation and Development saw no return to pre-crisis levels.
"'On average over the coming 10-year period, nominal prices for cereals, rice and oilseeds are expected to be 35 percent to 65 percent higher than on average in the past 10 years,' said a summary of the Agricultural Outlook report seen by Reuters.
"'Prices in real terms are projected to be 10 percent to 35 percent higher than in the past decade.'
"Even a bumper harvest expected this year will do little to ease the plight of the world's poor, FAO said in its twice-yearly Food Outlook which gives short-term estimates."
The article noted that, "Good weather and increased plantings will provide a 3.8 percent rise in world cereal output, with wheat up 8.7 percent. That has meant the price surge has started to level off, but prices will not plummet back to pre-crisis levels, FAO said.
"Rice, a staple for more than half the earth's population, will remain in short supply on global markets, and poor countries that rely on food imports could see food bills up 40 percent this year after a similar price hike in 2007, its report said."
With respect to rice, Keith Bradsher and Andrew Martin reported in today's New York Times that, "Japan is preparing to send at least 220,000 tons of rice to the Philippines, and possibly Africa. The Japanese government says the plan is meant to ease the suffering of poor nations punished by rising rice prices.
"But critics, including some in Washington, worry that it could set a precedent for Japan to dump foreign rice it was obligated to import but had never wanted. They say that the Japanese plan risks setting off a trade dispute with the United States - and may barely dent the price of rice.
"Yet opposing the Japanese plan could put the United States in a delicate diplomatic position. The price of rice, the most important staple food of the world's poor, has risen faster than any other cereal, nearly tripling this year alone, according to rice traders. The high prices have caused protests in many countries and, according to World Bank officials, pushed 100 million people back into poverty."
The Times article explained that, "The plan is controversial among trade experts because the rice earmarked for shipment is rice that Japan reluctantly imported from other countries under an agreement to provide at least a minimum level of access to its largely protected rice market each year.
"Separately, experts in international development warn that shipments of free or subsidized food hurt farmers in developing countries, robbing them of their customer base and making the country dependent on foreign food.
"The United States led an international effort by rice-exporting nations in the 1980s and early 1990s to insist that Japan begin allowing rice imports. Japan finally agreed to buy nearly 700,000 tons a year, as part of the 1993 global pact that created the World Trade Organization.
"But Japan has put much of the imported rice in warehouses at an annual cost to the government of $144 million, according to the United States Department of Agriculture."
Bradsher and Martin indicated that, "A draft text for the slow-moving Doha Round of global trade talks would ban countries from exporting free food if it displaced commercial purchases.
"Selling the imported rice instead of donating it would address the food aid issue, and might comply with the letter of Japan's pledges to the W.T.O.
"South Korea and Taiwan have both accepted deals under W.T.O. auspices that require them to allow some rice imports and explicitly bar them from re-exporting the rice. But the text of Japan's agreement to allow minimum access to imported rice does not mention the prohibition on re-exports.
"Lawyers at the W.T.O.'s headquarters have been arguing strenuously this week over whether Japan can re-export rice, and have not come to a consensus. The W.T.O. declined to comment on the Japanese plan."
