FAO Warns Global Food Costs Could Reach $2 Trillion Amid Rising Beverage Prices
Islamabad:The Food and Agriculture Organization (FAO) has warned that global food expenditure could surge to $2 trillion this year, largely due to rising prices of hot beverages such as tea and coffee. According to the FAO’s latest biennial report on food security, the prices of cocoa, which have risen fourfold compared to the 10-year average, have significantly contributed to the price hikes, doubling the cost of coffee. Meanwhile, tea prices have increased by 15% compared to long-term levels.
The report highlights that over half of the increase in global food costs is attributed to the rising prices of tea and coffee. The FAO forecasts that these prices will rise by approximately 23% by the end of the year.
**Food Exports and Economic Improvement**
The report also pointed out that food imports account for a larger share of the costs in higher-income countries, with food import costs expected to increase by 4.4%. In contrast, medium and low-income countries will experience a decrease in their food import expenses. Lower-income nations are likely to benefit from reduced prices for grains and oilseeds. However, per capita consumption of wheat and coarse grains is expected to decline, while rice consumption could increase by up to 1.5%.
The FAO also highlighted the significant role of food exports in the economic recovery of several nations. For example, Burundi and Ethiopia’s food exports saw coffee accounting for nearly 40% of their export value. In Côte d’Ivoire, cocoa exports exceeded the value of all its food imports. Similarly, Sri Lanka earned over half of its total food export value from tea.
**Concerns Over Food Security**
The FAO’s estimates signal mixed prospects for global food production and trade. While wheat and coarse grain production is expected to decrease, it will still exceed consumption. Conversely, record production of rice this financial year may lead to higher consumption, storage, and international trade.
The report also suggests slight increases in meat and dairy product production, while fish production could rise by 2.2%. However, the demand for vegetable oils is projected to outstrip production for the second consecutive year, potentially leading to reduced reserves.
The FAO issued a warning that extreme weather events, geopolitical tensions, and policy shifts could destabilize production systems, leading to further declines in global food security.
