Countries with strong agricultural bases are likely to be encouraged by the most recent assessment of the global food market released by the Food and Agriculture Organization (FAO) which projects that the agri-foods sector is likely to continue to demonstrate a greater resilience in the face of the continued COVID-19 threat.
“Whilst COVID-19 has posed a serious threat to food security, overall, our analysis shows that from the global perspective, agricultural commodity markets are proving to be more resilient to the pandemic than many other sectors, the WHO says in its report released last week though it says that the size of the challenge and the “enormous uncertainties” associated with it requires that the international community “remain vigilant and ready to react if and when necessary.”
The FAO’s recent Food Outlook Report assesses global supply and demand for the world’s most traded commodities including cereals, oil crops, meat, dairy products, fish and sugar through to 2021. Its projections appear to point to a “comfortable cereals supply and demand situation with early prospects pointing to an increase of around 2.6 per cent on the previous year’s record cereal production.
Several weeks ago this newspaper reported on the upbeat projection for rice production in the short to medium term in Guyana, provided by one of the country’s leading rice milling companies. That projection appears to carry through globally. Overall world cereal trade in 2020/21 is projected to stand at 433 million tonnes, up 2.2 percent (9.4 million tonnes) from 2019/20, and setting a new record high, boosted by expected expansions in trade of all major cereals.
Meanwhile, a combination of COVID-19-related market disruptions, animal diseases and the lingering effects of droughts is projected to cut global meat production by 1.7 per cent this year though the FAO says that the international meat trade is likely to register a moderate growth, albeit slower than in 2019.
According to the FAO, one of the heaviest sectorial declines in global food availability is likely to be registered in the seafood sector where the market, particularly for “fresh products and popular restaurant species” is likely to be heavily affected. This, the FAO report says, is attributable to the fact that one of the knock-on effects of COVID-19 has been reduced fishing fleet activity. Global shrimp and prawn supplies are expected to be drastically affected by this situation. Simultaneously, there has been a drastic reduction in “stocking targets” in the aquaculture sector.
And according to the FAO report, world production of sugar over the 2019-2020 period is forecast to drop for the second consecutive year and to fall below the estimated level of global consumption – for the first time in three years. “Trade in sugar is foreseen to expand, sustained by low prices and stock rebuilding in some traditional importing countries,” the FAO says adding that “the expectation of a global sugar production deficit for 2019/20 season has done little to support international sugar prices, which have been falling since mid-2017, and are below estimated production costs for the vast majority of world producers.”
Meanwhile, wider market disruptions appear not to have had any negative impact on milk production with the FAO report seeing modest growth in the sector this year. However, according to the report, global dairy exports is likely to experience a contraction of around 4% on account of falling import demand.
