108^th meeting of the Committee on Agriculture

23-24 MAY 2024

WORK PROGRAMME PURSUANT TO PARAGRAPH 8 OF THE MINISTERIAL DECLARATION
ON EMERGENCY RESPONSE TO FOOD INSECURITY

Submission by the Food and Agriculture Organization of the United Nations (FAO)

The following submission, dated 21 May 2024, is being circulated at the request of the Food and Agriculture Organization of the United Nations (FAO).

_______________

1  Global food security situation

1.1.  The 2023 edition of The State of Food Security and Nutrition in the World (SOFI)[1] highlights that global hunger - as measured by the Prevalence of Undernourishment (PoU) - remained relatively unchanged from 2021 to 2022 but is still well above pre-COVID-19 pandemic levels. About 9.2% of the world's population in 2022 were affected by hunger, up from 7.9% in 2019. In addition, nearly 600 million people are projected to be chronically undernourished in 2030. This is about 119 million more than in a scenario in which neither the pandemic nor the war in Ukraine had occurred. It is also about 23 million more than in a scenario in which the war in Ukraine had not occurred.

1.2.  The report also notes that the prevalence of moderate or severe food insecurity at the global level remained unchanged for the second year in a row, following a sharp increase from 2019 to 2020. About 29.6% of the world's population - 2.4 billion people - were moderately or severely food insecure in 2022, of which about 900 million (11.3% of the world's population) were severely food insecure. The new SOFI report will be released in July 2024, with updated figures on undernourishment.

1.3.  Finally, according to the 2024 edition of the Global Report on Food Crises (GRFC),[2] released on 24 April 2024, about 281.6 million people in the 59 countries/territories faced high levels of acute food insecurity in 2023.[3] The number of people affected increased by 24 million since 2022, marking the fifth consecutive year of increases.[4]

1.4.  The Sudan experienced the greatest deterioration due to the devastating impact of conflict since April 2023, with an additional 8.6 million people facing high levels of acute food insecurity, bringing the total to 20.3 million.

1.5.  Likewise, the escalation of hostilities in Palestine (Gaza) in late 2023 led to the most severe food crisis in the GRFC history, with the entire population of 2.2 million facing high levels of acute food insecurity, including 26% in Catastrophe (IPC Phase 5) from December 2023 to February 2024.

2  DRIVERS OF FOOD INSECURITY

2.1.  The intensification of the main drivers of food insecurity and malnutrition – conflicts and wars, climate extremes, economic setbacks and increasing inequalities - is hampering global efforts to improve food security and achieve the Sustainable Development Goal (SDG) target on zero hunger, as highlighted in the SOFI report.

2.2.  According to the latest edition of the GRFC report, conflict/insecurity was the main driver in 20 of the 59 countries/territories in food crises in 2023, where almost 135 million people were estimated to face high levels of acute food insecurity. Meanwhile, climate-related shocks were the main driver in 18 countries, where nearly 72 million people faced high levels of acute food insecurity. This represents an increase from 2022, when 56.8 million acutely food insecure people in 12 countries were estimated to need urgent humanitarian assistance. Economic shocks were the main driver in 21 countries, where 75.2 million people faced high levels of acute food insecurity. This is down from 83.9 million people in 27 countries in 2022, but still more than double the number in 2019, before COVID-19 triggered large increases in domestic food prices.

3  Trends in global food prices

3.1.  The FAO Food Price Index (FFPI) stood at 119.1 points in April 2024, up marginally (0.3%) from its revised March level, as an increase in the price index for meat and smaller upturns of vegetable oil and cereal indices slightly more than offset decreases in those for sugar and dairy products. Compared to a year ago, the FFPI was down by 7.4%.

3.2.  The FAO Cereal Price Index averaged 111.2 points in April, up nearly 0.3% from March but 18.3% below its April 2023 value. After declining for three consecutive months, average global wheat export prices stabilized in April. The FAO Vegetable Oil Price Index averaged 130.9 points, also up by almost 0.3% month-on-month and marking a 13-month high. The marginal increase reflects the net effect of higher sunflower and rapeseed oil quotations, more than offsetting slightly lower palm and soyoil prices. The FAO Dairy Price Index averaged 123.7 points in April, down marginally from March, marking a downturn after six months of continuous increases, but remained 4.3% below its value in the corresponding month last year. The FAO Meat Price Index averaged 116.3 points in April, up 1.6% from March, marking the third consecutive monthly increase and making the index stand only marginally (0.4%) below its corresponding value one year ago. Lastly, the FAO Sugar Price Index averaged 127.5 points in April, down 4.4% from March, marking a second consecutive monthly decline and standing 14.7% below its value in April 2023. The decrease in world sugar prices was mostly related to improved global supply prospects.

Figure 1. FAO Food Price Index (left) and Price Indices for commodity groups (right)

Source:      FAO. 2024. Food Price Index. 3 May 2024. https://www.fao.org/worldfoodsituation/foodpricesindex/en/

4  GLOBAL CEREAL supply and demand

4.1.  FAO's latest forecast (Table 1) for world cereal production in 2023/24 has been raised by 5 million tonnes and now stands at 2,846 million tonnes, up 1.2% (35.1 million tonnes) from the previous year's level. This upward revision mostly rests on adjustments to global rice production, which has been raised by 2.9 million tonnes since April. As a result, global rice production in 2023/24 is expected to reach a new record of 529.2 million tonnes (milled basis), 0.7% above the 2022/23 estimate. Furthermore, modest upward revisions were made to the forecasts for global maize and wheat production.

4.2.  Pegged at 2,829 million tonnes, the forecast for world cereal utilization for 2023/24 is up 1.7 million tonnes from last month and 37.7 million tonnes (1.4%) above the 2022/23 level. Global coarse grain utilization in 2023/24 is forecast at 1,510 million tonnes, up 1.8 million tonnes from the previous month and 1.6% from the 2022/23 level. However, the 2023/24 global wheat utilization is still set to increase by 1.9% above the 2022/23 level, to 794 million tonnes. FAO has raised its April forecast of world rice utilization in 2023/24 by 1.2 million tonnes to 525.0 million tonnes, following upward revisions to expected uses by several countries. Despite the upward revision, global rice utilization remains forecast to fall 1.2 million tonnes below the 2022/23 estimate.

4.3.  Despite a downward revision of 4.6 million tonnes from the previous month, FAO's forecast for world cereal stocks ending in 2024 is now pegged at 890 million tonnes, still 2.1% above their opening levels. The world cereal stocks-to-use ratio in 2023/24 is forecast at a comfortable level of 30.9%, almost unchanged from the level of 30.8% in 2022/23. Pegged at 372 million tonnes, global coarse grain stocks are still predicted to rise above their opening levels, by 5.6%. At 318 million tonnes, the global wheat stocks forecast is 1.4% below opening levels and nearly unchanged this month. Global rice stocks at the close of 2023/24 marketing seasons are forecast to rise by 1.6% above their opening levels to an all-time high of 199.2 million tonnes.

4.4.  The forecast for world trade in cereals has been lifted by 1.9 million tonnes in 2023/24 to 487 million tonnes, pointing to a 7.5 million tonnes (1.6%) increase above the 2022/23 level. The forecast for global trade in coarse grains in 2023/24 (July/June) has been raised by 0.8 million tonnes. Global wheat trade in 2023/24 (July/June) was also lifted by 1.2 million tonnes, attributed mostly to larger than anticipated exports from traditionally minor exporters of wheat products, along with higher imports. Despite the upward revision, global wheat trade in 2023/24 (July/June) is still anticipated to decline by 0.8% from the 2022/23 level to 200 million tonnes. International trade in rice in 2024 (January-December) is forecast at 51.1 million tonnes, down marginally from April, and 3.4% below the already reduced 2023 level.

Production outlook for 2024 crops

4.5.  FAO's forecast for global wheat production in 2024 has been lowered to 791 million tonnes. At this level, the 2024 world wheat outturn is still anticipated to exceed the 2023 output, albeit by a smaller margin of nearly 0.5%. Overall wheat production is pegged at 128.4 million tonnes in 2024, about 4% down year on year. For the 2024 coarse grain crops, the main harvest period is beginning soon in southern hemisphere countries, where recent adverse weather conditions have curbed yield prospects in leading producers. Lastly, significant maize yield reductions are also expected in most Southern African countries in 2024, similarly driven by intense rainfall deficits. 

Table 1. Global cereal markets at a glance

Source:    FAO. 2024. FAO Cereal Supply and Demand Brief. 3 May 2024.https://www.fao.org/worldfoodsituation/csdb/en.

5  FAO's work to address the global food crisis

5.1.  FAO has played a leading role in shaping the response to the global food security crisis, being in the forefront of efforts to alleviate its impact and recommend solutions. As presented in detail in previous FAO submissions to the WTO Committee on Agriculture, FAO provides timely and neutral data and information on global markets, conducts analysis and assessments of impacts, recommends targeted policy responses both globally and nationally, and supports global food security governance.

5.2.  Market transparency is essential to inform policy decisions and reduce market uncertainty in the face of increasing global risks and challenges. Through its regular activities and periodic reports and briefings, FAO continued to provide timely and objective data and information on market developments and prospects, country and regional early warnings and estimates of the impact on global food insecurity. In addition, policy dialogue and coordination at the global level is essential to avoid policy distortions, thereby minimizing market and trade disruptions and ensuring the proper functioning of international markets and supply chains. The Agricultural Market Information System  (AMIS), a G20 initiative with its inter-agency secretariat hosted by FAO, has contributed to enhancing market transparency through its regular and timely market monitoring activities and products, including the publication of the monthly AMIS market Monitor, while its Rapid Response Forum has provided a unique platform for policy dialogue and coordination of responses among the AMIS participant members. In response to new challenges, the programme of work of AMIS is being expanded to cover vegetable oil and fertilizer markets and monitoring of trade disruptions.

5.3.  Moreover, in response to the outbreak of the war in Ukraine, FAO published a series of policy briefs, information notes and other assessments on global agricultural and food markets and food security. FAO has proposed the establishment of a Food Import Financing Facility (FIFF) to support vulnerable countries in facing the soaring food import costs, which prompted the International Monetary Fund (IMF) to approve in September 2022 a new Food Shock Window under the Rapid Credit Facility (RCF) and the Rapid Financing Instrument (RFI) as a complement to the tools used by the Fund to support the broad international effort to address the global food shock.

5.4.  In addition to its leadership in providing market information services and global public goods to inform policy decisions, FAO has also been at the forefront of efforts to develop approaches and solutions to address the global food security crisis in a wide range of global governance mechanisms, including the Group of Twenty (G20), the Group of Seven (G7), the Global Food Security Cluster, the Global Forum on Food and Agriculture and the Global Crisis Response Group on Food, Energy and Finance (GCRG) established by the UN Secretary-General in 2022 in response to the global crisis.

5.5.  Lastly, FAO has a unique role to play in preventing and addressing acute hunger and supporting countries experiencing food crises to return to a path of growth and prosperity in line with its mandate. In humanitarian contexts, FAO helps countries and people to anticipate and prepare for crises, responds fast to shocks, and seeks to reduce risks and address vulnerabilities. In this regard, in 2023, FAO provided emergency livelihood and resilience assistance to 56 million people in crop, livestock, fisheries, forestry, and natural resource management activities.

__________