The Food and Agriculture Organization of the United Nations (FAO) believes that the food crisis will continue to spread globally in 2024.
The good news is that FAO's latest forecast for world cereal stocks at the end of the 2024 season is 2 percent higher than at the beginning of the season7%, a record high. According to the latest**, the global cereal stocks-to-use ratio in 2023 and 2024 is expected to be 308%, indicating a more relaxed situation and a record 2024 cereal harvest is expected.
Downside factors include extreme weather events caused by El Niño and geopolitical conflicts.
In this context, how to judge the global food ** in 2024?After reaching an all-time high in 2022 and declining in 2023, global food** is expected to see another annual decline in 2024 due to lower input costs and a good harvest, Oxford Economics said in its latest report.
Kiran Ahmed, senior economist at Oxford Economics, told CBN that even if it falls, food is still at a historic high level due to factors such as high energy, interest rates and wages, as well as limiting the world, "so although we think global food will fall back, it will still be about 45% higher than the 2019 level." ”
A good harvest is expected in 2024.
Based on the judgment of international institutions in 2024, it can be seen that a "good harvest" is an important factor contributing to the decline in the next year.
The FAO raised its latest forecast for global cereal production in 2023 to 282.3 billion tons, a year-on-year increase of 09%, which is 10.3 million tonnes higher than the all-time high in 2021. At the same time, the latest forecast for world cereal stocks at the end of the 2024 season increased by 2.0 percent from their opening levels7%, a record high. In addition, the FAO raised its latest forecast for global rice production in 2023 and 2024 by 0.0 compared to the previous season8%。
Data from the U.S. Department of Agriculture (USDA) also showed that the 2023 2024 rice and soybean crops will hit record highs, while the 2023 2024 wheat harvest will be slightly lower than the all-time high set in 2022 2023.
The Oxford Institute report shows that global food** has been moderating in the second half of 2022 and into 2023 after hitting a record high in 2022. Global food**, as measured by the World Bank's Food** Index, will decline further in 2024, by 4%-5%. However, there will be no return to pre-pandemic levels.
The key factor, Ahmed said, is that cost pressures are easing, but most are still above pre-pandemic levels.
The Oxford Institute report shows that by 2024, a decline is expected, but the average in 2024 will still be nearly 20% above the pre-pandemic peak. Similarly, natural gas (the main feedstock for fertilisers) will be well above pandemic levels – the European average is expected to be more than double what it was in 2019.
Our **fertilizer** will remain about double what it was in 2019. Many non-energy costs will also remain high, Ahmed said, adding, "We expect interest rates to remain high in 2024 as central banks will only gradually lower them." High interest rates will keep borrowing costs high, increase farmers' operating costs, and discourage investment. In addition, while wage growth is slowing, wage levels remain high. For emerging markets in particular, this is likely to be further supported by more labour-intensive farming practices**.
Export restrictions remain in place.
Another obstacle to the normalization of food is growing protectionism, according to the Oxford Economics report. "Food insecurity has worsened significantly after the recent spike, leading countries to impose export bans and tariffs. Although the number of such policies has decreased in 2023, it is still well above pre-pandemic levels. "The report shows that the most far-reaching of such policies enacted in 2023 is the rice policy.
India is the world's largest rice exporter, with 22.2 million tonnes of rice exported last year, accounting for about 40% of the world's total rice exports, more than Thailand, Vietnam and other rice exporting countries combined.
In July, India imposed a ban on rice exports, a move that follows the ban on broken rice in 2022. Subsequently, the FAO rice ** index was **9 in August8%, a 15-year nominal high, reflects the impact of India's rice export ban in July.
The move led to a sharp drop in global volumes and boosted rice*** Ahmed said, "We expect restrictions to remain in place beyond the end of the year." Meanwhile, India's rice production is expected to decline in the 2022-2023 marketing year due to adverse weather conditions, which will increase the pressure on India's domestic **. Moreover, 2024 is a crucial election year for India. Both of these factors will hinder the lifting of the export ban. ”
The first financial reporter learned that within the World Trade Organization (WTO), there have been many discussions on India's implementation of a ban on rice exports, but India has not changed its ban position.
El Niño skewed risks to the upside.
Extreme weather events caused by climate change are frequently occurring and affecting agricultural harvests. According to FAO data, multiple post-disaster assessments conducted between 2007 and 2022 show that agriculture suffers an average of 23 percent of all losses caused by disasters across sectors. More than 65 per cent of losses in the agricultural sector are caused by a single disaster, drought. Over the past 30 years, crop and livestock production has lost about 3$8 trillion.
Ahmed said: "Our risk remains skewed to the upside. The main risk is related to the arrival of El Niño, which could disrupt global food and put pressure on it. ”
Historical analysis, he explained, shows that El Niño has the potential to cause significant damage to food, as changes in global climate patterns affect the harvests of various crops, and as a result, global food**.
In addition, he said that the end of the Black Sea Grain Initiative could also put Ukrainian grain exports at risk.
CBN).