The Philippines and other so-called Low-Income Food Deficit Countries (LIFDCs) are among the most vulnerable to food price shocks, according to experts.
“(The) Philippines is importing so much of its rice and so it’s very vulnerable to rice prices,” Oxfam Great Britain CEO Barbara Stocking said in an interview.
“The general situation for agricultural crops and food commodities is tight with world prices at stubbornly high levels, posing a threat to many low-income food deficit countries,” David Hallam, director of the markets and trade division of the Food and Agriculture Organization (FAO) of the United Nations, said in a statement.
Dr. Rolando Dy, an agribusiness economist with the University of Asia and the Pacific, has already predicted as much. “There is an upside to the price of food items, including rice,” Dy said earlier.
International food prices, which in February soared to levels seen in the 2007-2008 food crisis, dropped a modest 1 percent in May, according to the FAO. Declines in the prices of cereals and sugar more than offset increases in meat and dairy.
However, high and volatile farm commodity prices are likely to prevail for the rest of this year and maybe well into 2012 because the international supply of farm commodities such as cereals, oilseeds, meat, and fish can barely meet demand, FAO said.
The FAO said LIFDCs and Least Developed Countries would be hardest-hit as they would likely have to respectively spend 27 and 30 percent more on food imports than in 2010.
Expenditures on imported foodstuffs for “vulnerable countries” could make up roughly 18 percent of their total import bills compared with a world average of around 7 percent, FAO said.
Globally, the food import bill is expected to reach a new record of $1.29 trillion in 2011, or 21 percent more than in 2010.
Current prospects for cereals (such as wheat and rice) in 2011 point to a record harvest of 2,315 million tons—a 3.5-percent increase over 2010, which marked a 1-percent drop over 2009.
However, demand for cereals has also been increasing. The FAO said this means that the 2011 crop, even at record levels, is expected to “barely meet consumption.” This would support further price increases, even though the Russian Federation’s anticipated revival of cereals exports next month could help relieve some of that pressure, according to FAO’s grain analyst, Abdolreza Abbassian.
In the oilseeds market, supplies in 2011/12 may not be enough to meet growing oil and meal demand, implying further reductions in global inventories, FAO said. There are apparently better prospects to sugar because of large anticipated production in 2010/11, which is likely to surpass consumption for the first time since 2007/08.