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AMIS members review current food market situation and outlook

22 Jun 2022

Focal points of AMIS participating countries and representatives of several of the AMIS member organizations met yesterday for the 21st session of the Global Food Market Information Group. The meeting provided the first occasion for this technical forum to review the impact of the war in Ukraine on global food markets and global food security.

The situation remains particularly tight in wheat markets. A slight fall in global production and disrupted exports from Ukraine will likely sustain supply tightness and uncertainty in the current 2022/23 season. Similarly, global maize markets continue to be volatile in view of production uncertainties in all of the major exporters, including the Ukraine. As for soybeans, global production could reach a new record, but with inventories currently at multi-year lows, the global stock-to-use ratio will likely remain below the five-year average. By contrast, the global supply and demand situation for rice is expected to remain comfortable, although high input costs and water constraints may prevent world rice production from rising.

With food prices currently at all-time highs and economies still recovering from the impact of COVID-19, hunger in the world is expected to rise. According to the World Food Programme, acute food insecurity is projected to increase by an additional 47 million people while humanitarian assistance is limited by rising food, fuel and transport prices.

The World Bank Group explained that commodity prices particularly increased for energy, especially natural gas and coal prices that are three to four times higher than their long-term average. The increase was strong but less pronounced for the agriculture sector. While also above their historical norm, wheat prices for example are still below their historic highs of the 1970s in real terms.

Considering that prices for agricultural inputs such as fertilizer have increased even stronger than those of food commodities, FAO argued that real prices received by farmers are low and falling. Farmers are therefore not incentivized to step-up production, which might point to a prolonged phase of subdued output and high prices for consumers.

IFPRI presented the current state of export restrictions on food commodities and the negative consequences that these may have on agricultural markets. According to their policy tracker, 22 countries have implemented trade restricting measures, including export licensing requirements, taxes and bans, mostly in response to the Ukraine crisis and representing about 17 percent of all agricultural trade (in kcal). Similar to previous crises, least developed countries and developed countries that are net food importers suffer the most in view of their high share of imported calories that are impacted by these restrictions.

Concluding the discussion on topical issues, IGC presented main findings of its work on establishing an ethanol and feedstock matrix to support short-term forecasting of ethanol production trends and grains use.

At the end of the meeting, the AMIS Chair was passed on to the United States, represented by the country’s focal point Mr. Seth Meyer of the United States Department of Agriculture. In his brief remarks, the US confirmed its strong commitment to further strengthening AMIS and working with all members to have a better understanding of the global food market situation and outlook.