Dearer food to hit consumption

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Javier Blas, FT Syndication Service
LONDON: Poor countries are likely to have to cut food consumption after an "alarming" increase in their agricultural commodities bill, the United Nations' Food and Agriculture Organisation warned on Wednesday.
The FAO said its biannual Food Outlook report that high and volatile prices of grains, such as wheat and maize, could curtail procurement in many countries.
"Given the firmness of food prices in the international markets, the situation could deteri orate further in the coming months leading to reduction in imports and consumption in many low-income food-deficit countries," it said.
The world's food import bill will rise in 2007 to $745bn, up 21 per cent from last year. Developing countries' food bill will increase 25.5 per cent, to almost $233bn, according to FAO estimates. The annual food expenditures for the most vulnerable countries have more than double since 2000.
The warning comes after Jacques Diouf, FAO's director-general, said recently that rising food prices would likely to force some developing countries to follow Russia's example and impose retail price controls to avoid social unrest
"Many (countries) will have to take hard decisions because of the impact of food prices on their populations," Mr Diouf told the Financial Times in October. "In some countries there will be price controls, some will scrap import tariffs on food to minimise the impact of rising costs and others will increase food subsidies."
The FAO warned that food retail prices were now been increased after high international food prices "ripple through the food supply chain." That is causing "a widespread and commonly share concern about food price inflation".
Food prices are rising on strong demand from developing countries; a rising global population; more frequent floods and droughts caused by climate change; and the biofuel industry's appetite for grains.