G/AG/GEN/189  
 
11 June 2021  
(21-4822) Page: 1/5 
Committee on Agriculture  Original: English  
 
 
WTO COMMITTEE ON AGRICULTURE  
98TH MEETING (17 -18 JUNE 2021)  
 
"COVID -19 AND AGRICULTURE"  
Contribution by the Food and Agriculture Organization of the United Nations (FAO)  
The following submission, dated 11 June 2021, is being circulated at the request of the Food and 
Agriculture Organization (FAO).  
 
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1.1.  The COVID -19 crisis is unlike any other crisis in modern times. Global in nature, and occurring 
in multiple waves, supply and demand shocks are causing significant  economic and social impacts, 
which are still unfolding in many parts of the world. Massive vaccination campaigns may eventually 
obviate the need for economically damaging restrictions; however, inadequate supplies and 
inequitable access to vaccines means that population immunity in low - and middle -income countries 
will not be achieved in 2021.  
1.2.  Since the outbreak of COVID -19 in the beginning of 2020, concerns and fears emerged 
regarding the ability of global food and agricultural markets to withstand the s hock and their capacity 
to continue to function properly and meet the growing demand, particularly from those countries 
that depend on trade for safeguarding the food security of their populations. This note examines 
developments in global food and agricul tural markets and trade in 2020 and 2021 . 
1  WORLD AGRI -FOOD MARKETS AND TRADE REMAINED RESILIENT1 
1.1.  Despite initial predictions of a likely significant contraction, global merchandise trade remained 
remarkably resilient to the pandemic 's logistical and economic impacts, with world agri -food markets 
and trade, in particular, emerging as the most robust sector. However, it should be noted that in 
many countries, disruptions have emerged and continue to pose challenges to food security.  
1.2.  On the export side, agricultural exports continued their upward trend, rising by USD  51.8 billion 
(or 3.2 %) from 2019 to 2020. The expansion in exports by developing countries contributed 
USD 21 billion (or 40 %) to the global increase, with developed countries accounting for the 
remainder. The data show a considerable contraction in agricultural exports during the first half 
of 2020, followed by a rapid recovery in the second half of the year.  
1.3.  Regarding imports, global food imports increased by USD 47.2 billion  in 2020, compared 
to 2019, with developing countries ' imports expanding by USD 39.4 billion and those of developed 
countries growing by USD 7.8 billion. The data show that the imports of fish and beverages declined 
considerably during the first six months  of 2020.  
1.4.  For 2021, it is projected that world agricultural trade will continue to expand, reaffirming the 
resilience of the sector to COVID -19 pandemic. Global agricultural exports in 2021 are anticipated 
to expand by USD 137 billion, or 8 %, from the 2020  level. With economic recovery expected to 
 
1 FAO. 2021. Food Outlook: Biannual Report on Global Food Markets , Rome. 
https://doi.org/10.4060/cb4479en . G/AG/GEN/189  
 
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  gather considerable pace in 2021, demand for commodities that are more income -elastic could 
rebound significantly, especially for fisheries products and beverages.   
1.5.  A number of reasons could explain the observed r esilience of international agri -food markets 
and trade during the pandemic. Global food supplies were ample and production prospects were 
positive, compared, for instance, to the 2007/08 situation. The efforts of governments worldwide to 
keep markets open and trade flowing smoothly have contributed to the remarkable resilience of 
agri-food markets.2 Another key element is the availability of up -to-date data and information on 
market conditions. For instance, the Agricultural Market Information System (AMIS )3, an 
inter-agency platform launched by the G20 in 2011 and housed at FAO, played an important role in 
market transparency and policy dialogue among the major players in food markets. Furthermore, 
many countries adopted measures to facilitate food trade,  including a greater use of digital 
technologies such as e -certificates. Other reasons for the resilience of the agri -food sector include 
the accommodative fiscal policies implemented by many countries across the globe, the depreciation 
of the currencies o f some major agri -food exporters (e.g. Argentina and Brazil), and the appreciation 
of the currencies of main importers (e.g. China) against the US dollar, prompting increased imports.  
2  INTERNATIONAL FOOD COMMODITY PRICES ON A RISING TREND  
2.1.  Since mid -2020, w e have seen a significant increase in the prices of most commodities, and in 
particular agricultural commodities, with many reaching multi -year highs in both nominal and real 
terms. Crude oil prices are now above USD 60 a barrel, while minerals and metals quotations have 
also been rising steadily.  
2.2.  The FAO Food Price Index  (FFPI)  averaged 127.1 points in May 2021, 5.8 points  (4.8%) 
higher than in April and as much as 36.1 points (39.7 %) above the same period last year. The May 
increase represented the bigges t month -on-month gain since October  2010. It also marked the 
twelfth consecutive monthly rise in the value of the FFPI to its highest value since September  2011, 
bringing the Index only 7.6 % below its peak value of 137.6 points registered in February 2011.  The 
sharp increase in May reflected a surge in prices for oils, sugar and cereals along with firmer meat 
and dairy prices (Figure 1).  
Figure 1.  - FAO Food Price Index and sub -indices  
 
Source:  FAO, June 2021 . 
 
 
2 Trade restricting measures, in particular export restrictions, were introduced at the beginning of the 
pandemic. However, their use was limited, compared to the 2007/08 cris is, and they were generally 
short-lived.  
3 For more information on AMIS: http://www.amis -outlook.org/ . 
G/AG/GEN/189  
 
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  2.3.  The FAO Cereal Price Index  averaged 133.1 points in May, up 7.6 points (6.0 %) from  April 
and 35.7 points (36.6 %) above its May 2020 value. Among the major cereals, international maize 
prices rose the most, gaining 12.9 points (8.8 %) in May, reaching 75.6 points (89.3 %) above their 
value last  year and their highest level since January 2013. Downgraded production prospects for 
Brazil added pressure to already tight global supplies amidst sustained strong demand. However, 
towards the end of the month maize prices started to retreat, mostly in ex pectation of higher 
production prospects in the United States. International barley and sorghum prices also increased 
in May, rising by 5.4 % and 3.6 %, respectively. Following a surge in wheat prices in early  May, 
improved crop conditions, particularly in t he European Union and the United States, had led to sharp 
price declines by the end of the month. However, wheat prices still averaged 8.0 points  (6.8%) up 
from April and 27.7 points (28.5%) above May 2020. International rice prices held steady in May, 
with logistics and shipping costs keeping trading activity subdued through the month.  
2.4.  The FAO Vegetable Oil Price Index  averaged 174.7 points in May, gaining 12.7  points 
(or 7.8%) month -on-month and marking a twelfth consecutive monthly rise. The continued st rength 
of the index mainly reflects rising palm, soy and rapeseed oil values. International palm oil 
quotations remained on an upward trajectory in May and reached their highest level since 
February  2011, as slow production growth in Southeast Asian countr ies, together with rising global 
import demand, kept inventories in leading exporting nations at relatively low levels. As for soy oil, 
prospects of robust global demand, especially from the biodiesel sector, lent support to prices, while 
continued global supply tightness underpinned international rapeseed oil prices.  
2.5.  The FAO Dairy Price Index  averaged 120.8 points in May, up 1.7 points (1.5%) from April, 
marking one year of uninterrupted increases and lifting the value 26.4 points (28%) above its level 
of one year ago. However, the index is still 22.8% below its peak value reached in December  2013. 
In May, international quotations for skim milk powder rose the most, reflecting solid import demand 
amid limited spot supplies from the European Union, and those  for whole milk powder increased on 
high import purchases, especially by China, despite New Zealand’s offer of large sales. Cheese 
quotations also strengthened, mostly due to lower supplies from the European Union amidst strong 
demand. By contrast, butter prices fell on increased export supplies from New Zealand, marking the 
end of an eleven -month long price rally.  
2.6.  The FAO Meat Price Index  averaged 105.0 points in May, up 2.3 points (2.2%) from  April, 
registering the eighth monthly increase and lifting the index 10% above its level of one year ago, 
but still nearly 12% below its peak reached in August 2014. In May, price quotations for all meat 
types represented in the index rose, principally underpinned by a faster pace of import purchases 
by East Asian cou ntries, mainly China. Tightening global supplies also provided price support across 
all meat products, reflecting multiple factors ranging from slaughter slowdowns in the cases of bovine 
and ovine meats to rising internal demand for poultry and pig meats i n leading producer regions.  
2.7.  The FAO Sugar Price Index  averaged 106.7 points in May, up 6.8 points (6.8%) from  April, 
marking the second consecutive monthly increase  and the highest level since March 2017. The rise 
in international sugar price quotations wa s mostly related to harvest delays and concerns over 
reduced crop yields in Brazil, the world's largest sugar exporter, as the prolonged dry weather 
conditions affected crop development. Additional support was provided by higher crude oil prices 
and a furt her strengthening of the Brazilian Real against the US dollar, which tends to restrain 
shipments from Brazil. Large export volumes from India, however, contributed to easing the price 
surge and prevented larger monthly price gains.  
3  GLOBAL FOOD IMPORT BILLS SET TO REACH NEW HIGHS IN 20214 
3.1.  The provisional forecast for the world food import bill in 2021 points to a record 
USD 1.715  trillion, suggesting a 12 % increase from the previous year. The economic impacts of 
COVID -19 are not expected to hinder global demand for foodstuffs in 2021, nor did the pandemic 
curtail growth in the bill in 2020. Indeed, the year -on-year expansion of the bill in 2020 was mainly 
due to a steadfast rise in imported volumes, especially of food staples; in 2021, however, while 
volumes are anticipated to remain robust, higher  unit costs (international prices and freight rates) 
 
4 Based on Schmidhuber J. and Qiao B., "Surging trade, record import bills and rising food prices: how 
the international food system kept a lid on a global health crisis" in FAO Food Outlook: Biannual Report on 
Global Food Markets . Rome, 2021. https://doi.org/10.4060/cb4479en . G/AG/GEN/189  
 
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  are set to underpin overall growth in the world bill compar ed with 2020. Import bills of total food 
and food products by region are presented in Table 1.  
3.2.  COVID -19 has exerted a pronounced income shock on the global economy, with negative 
growth rates experienced across all regions, albeit at different depths of de cline and expected speeds 
and shapes of recovery. These income swings have left characteristic imprints on import demand 
across different food groups. The realized and foreseen changes in food import bills mainly reflect 
the diverging responsiveness of imp ort demand to changes in income.  
3.3.  Against the backdrop of much higher international price quotations predicted for 2021, as well 
as a strong upturn in world gross domestic product (GDP) growth, virtually all product bills are 
expected to increase in 2021. T he largest absolute increases in the year are those foreseen for 
cereals (up USD 37 billion), followed by vegetable oils (USD 33 billion), oilseeds (USD  31 billion) 
and fruits and vegetables (USD 24 billion). Combined, these products would account for almo st 
USD 126 billion of the USD 185 billion foreseen rise in the global bill in 2021 from 2020. Similarly 
in 2020, these product groups dominated the increase in the world import bill of USD  48 billion 
from 2019, and were also supported by a substantial incr ease in international purchases of oilseeds. 
Such developments were to be expected, given the low -income elasticity of basic foodstuffs. By 
contrast, purchases of fish products and beverages, which are typically sensitive to income changes, 
fell in 2020 co mpared with 2019.  
3.4.  The aforementioned trends are not expected to be uniform across economic and geographical 
regions. With few exceptions over all food categories, developed regions, which dominate global 
food inflows, are expected to import less food in 20 21 at a greater cost than in 2020, with prices 
(and freight costs) expected to fuel a net increase in the food import bill by USD 58 billion in 2021.  
3.5.  By contrast, and in spite of higher world prices, in 2021, developing countries are anticipated 
to purchas e more food for all product categories. Rising demand for cereals, vegetable oils, oilseeds, 
and fruits and vegetables are by far the greatest drivers of the predicted increase in the food import 
bill of developing regions in 2021, with volumes accounting for almost 60% of the USD  127 billion 
predicted increase. In 2020 too, the growth in imports of foodstuffs by developing countries 
contributed an overwhelming 83% (USD 39.4 billion) of the annual rise in the world food import bill. 
Only a decline in the pu rchases of fisheries products and beverages and a stagnation in coffee, tea, 
cocoa, and spice imports were recorded in 2020.  
3.6.  However, growth in the aggregate import bills of the most vulnerable groups of countries is 
dominated by increases in the unit cost s of importing food and should not be interpreted as an 
increase of food availability in these countries. For example, Least Developed Countries  (LDCs) are 
expected to purchase similar total volumes of food in 2021 compared to 2020, but at a higher cost. 
At the same time, in Low Income Food Deficit Countries (LIFDCs)5, despite the overall increase in 
the food import bills, the total volumes of imported food is predicted to register a significant 
decrease. Import bills of cereals constitute one of the few p roduct groups in which economically 
disadvantaged countries could benefit from greater import volumes at lower unit costs.  
3.7.  A worrying feature of this observation is that to the extent that changes in import demand 
reflect changes in overall demand, the COV ID-19 pandemic would have resulted in a shift from high - 
to low -value food products and likely, to a deterioration in the quality of diets. Indeed, the growth 
in international purchases of cereals by LDCS, LIFDCs and countries in sub -Saharan Africa (SSA), at 
the expense of more diverse and nutritional foodstuffs, bears testimony to this outcome.  
 
 
 
 
5 More information on the classification of countries as LIFDCs can be found on: 
http://www.fao.org/countryprofiles/lifdc/en/ .  
  G/AG/GEN/189  
 
- 5 - Table 1  - Import bills of total food and food products by region (USD billion)  
  World  Developed  Developing  
  2019  2020  2021*  2019  2020  2021*  2019  2020  2021*  
Animal and vegetable oils, fats and waxes  90 103 136 42 47 52 48 56 84 
Beverages  123 116 125 94 91 96 29 24 29 
Cereals and cereal preparations  196 210 248 90 92 100 106 118 147 
Coffee, tea, cocoa, spices and products  111 114 124 82 85 90 28 29 33 
Dairy products and eggs  99 99 108 63 62 66 36 37 43 
Fish, crustaceans, molluscs and products  175 162 174 122 115 125 53 46 48 
Meat and meat preparations  163 170 177 106 101 102 57 69 75 
Miscellaneous products and preparations  98 103 112 58 61 66 40 42 46 
Oilseeds and oleaginous fruits  97 108 140 30 34 36 67 75 103 
Sugar, sugar preparations and honey  46 50 52 25 26 27 21 24 26 
Fruits and vegetables  286 297 321 207 214 225 80 83 96 
Total  1,483 1,530 1,715 920 927 986 564 603 730 
  LDC LIFDC  Sub-Saharan Africa  
  2019  2020  2021*  2019  2020  2021*  2019  2020  2021*  
Animal and vegetable oils, fats and waxes  6 8 8 18 20 25 5 6 7 
Beverages  2 2 2 5 4 5 3 2 2 
Cereals and cereal preparations  12 13 15 15 14 16 12 12 14 
Coffee, tea, cocoa, spices and products  2 2 2 4 4 6 1 1 1 
Dairy products and eggs  2 3 3 4 4 5 2 2 3 
Fish, crustaceans, molluscs and products  1 1 1 9 9 10 3 3 4 
Meat and meat preparations  2 2 2 9 9 9 3 3 3 
Miscellaneous products and preparations  3 4 4 6 6 6 4 4 4 
Oilseeds and oleaginous fruits  2 2 1 6 7 7 0 0 0 
Sugar, sugar preparations and honey  3 4 3 3 4 5 3 3 3 
Fruits and vegetables  4 4 4 12 12 18 3 3 3 
Total  39 44 46 89 93 111 39 39 44 
* Forecast figures . 
 
 
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