Rising demand for biofuels made from coarse grains and vegetable oil is driving up the cost of food imports, with developing countries facing a 9.0 percent spike in import spending this year, the UN Food and Agriculture Organization said Thursday.
Overall, global expenditures on imported foodstuffs are expected to surpass 400 billion dollars, an increase of 5.0 percent over last year, according to the FAO's latest Food Outlook report.
Most of that increase is attributable to demand for coarse grains and vegetable oils, commodities used to produce biofuels. Import bills for coarse grains and vegetable oils are projected to increase by as much as 13 percent this year over 2006, the report said.
Developing nations are likely to face a 9.0 percent increase in what they pay for imported food. In low-income countries the food import bill could be 10 percent higher than in 2006, according to the FAO.
"The food import basket for the least developed countries in 2007 is expected to cost roughly 90 percent more than it did in 2000," said FAO economist Adam Prakash.
"This is in stark contrast to the 22 percent growth in developed country import bills over the same period."
The FAO said more expensive feed ingredients will exert upward pressure on meat and dairy prices, while record-high international freight rates will place an additional strain on the ability of some countries to pay for imported food.
The organization predicted that world cereal production would rise 6.0 percent from last year to 2.125 billion tonnes.
"The prospect of a strong recovery in global cereal production in 2007 is a positive development," said Abdolreza Abbassian, one of the authors of the report.
"But total supplies will still be barely adequate to meet the expected rise in demand, not only from the traditional food and feed sectors but in particular from the fast-growing biofuels industry.
"This means prices for most cereals are likely to remain high in the coming year."
