G/AG/GEN/129  
 
4 March 2016  
(16-1274)  Page: 1/8  
Committee on Agriculture  Original: English  
 
FAO REPORT TO THE WTO COMMITTEE ON AGRICULTURE 2016 
SUBMISSION BY FAO 
The following submission, dated 1 March 2016, is be ing circulated at the request of the Food and 
Agriculture Organization (FAO). 
 
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This report presents the contribution of FA O to the annual monitoring exercise of the 
WTO Committee on Agriculture (CoA). The report draws in large part on the latest issues of the FAO Cereal Supply and Demand Brief (February 2016), the Agricultural Market Information 
System (AMIS) Market Monitor  (February 2016) and the FAO Food Outlook (October 2015) . As in 
previous years, the focus of FAO's report to the Co A is on developments in the cost of imports of 
basic foodstuffs, highlighting in particular trends  in food import bills of the Least Developed and 
Net Food-Importing Developing Countries (the LD Cs and NFIDCs, respectively). In addition, it 
reports on developments in food price volatility and on market trends in basic foodstuffs, as well as on the fourth year of operation of AMIS. 
 
1  FOOD IMPORT BILLS 
1.1.  The global value of imported foodstuffs is projected to drop to a five-year low in 2015. 
At USD 1.09 trillion, the world food import bill in 2015 would be almost 20%, or USD 262 billion, 
below the revised level for 2014, which had re ached a record high of USD 1.35 trillion. 
1.2.  Several factors have contributed to bringing  the cost of importing food sharply down in 2015. 
First and foremost, international prices for many commodities have declined substantially, bringing 
unit costs down. Freight rates, which are expected to remain below last year's levels in spite of 
their rising in recent weeks, are also likely to contribute to a year-on-year decline in costs. In addition, the abundance of supply for many commodities in the major importing countries has 
lowered international demand. Imports have also been deterred due to weakening national 
currencies against the US dollar. 
1.3.  The global commodi ty import bills set to undergo the largest absolute declines in 2015 are 
those for cereal-based foodstuffs and dairy products, which are likely to fall by around 
USD 44 billion (24%) and USD 40 billion (40%), respectively. Considerably lower quotations 
compared with last year, especially in the case of dairy products, are driving bills of these food groups down, compounded by contractions in import demand. The annual decline in world 
expenditures on imported meat, at USD 29 billion or 19%, is also noteworthy, driven again by the 
combination of lower unit costs and smaller volumes. The global sugar bill could fall to a 9-year low of USD 33 billion, while a sizeable contraction is also expected in the cost of importing 
vegetable oils, mostly due to lower quotations. 
1.4.  While the bills of all foodstuffs look set to fall in 2015, global import costs of fish, vegetables 
and fruit and tropical beverages are showing some resilience. Exporters of these US dollar-denominated commodities have keenly met sustained global demand, facilitated by the 
weakness of their own currencies vis-a-vis the dollar. 
1.5.  The propensity at the world level for su bstantially lower import bills in 2015 encompasses 
many of the most economically vulnerable nations,  such as those in the groups of Least Developed 
Countries (LDCs) Low-Income Food-Deficit Countri es (LIFDCs), and those geographically situated G/AG/GEN/129 
 
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  in sub-Saharan Africa. Indeed, their food import bills  appear set to decline by more than the global 
average, with falls ranging between 22 and 23% among these country groups. 
1.6.  As for LDCs, lower bills would not necessarily  come at the expense of volumes, as imported 
food quantities could rise above the previous year's levels, in contrast to the global trend. This is 
because shortfalls in the production of staple s in many of these economically disadvantaged 
countries have led to procurement on the global marketplace to meet domestic needs. But this brings with it a severe burden on foreign exchange reserves, especially when international 
purchases are required to be paid in US dollars . Although the strong US dollar is generally 
beneficial to net merchandise exporters who can pay for food imports, it can prove onerous to many of the most vulnerable countries which are net importers of basic necessities, notably foodstuffs.  
Table 1: Forecast import bills of total food and major foodstuffs (USD Billion) 
 World Developed  Developing  LDC LIFDC Sub Saharan 
Africa 
 2014  2015 2014  2015  2014  2015  2014  2015  2014 2015 2014 2015  
TOTAL FOOD 1,346.0  1,084.7 796.9  653.7  549.1  431.0  41.9 32.1 86.0 67.2 47.3  36.8 
Vegetables and 
Fruits 235.4  223.7 168.0  159.6  67.5 64.1 4.1 3.9 10.7 10.2 3.9  3.7 
Cereals 178.5  135.1 80.0  62.3 98.5 72.8 12.1 8.9 20.4 15.9 14.1  11.2 
Fish 144.6  129.7 97.7  91.7 46.9 38.0 1.3 1.4 4.0 3.5 3.9  3.4 
Meat 177.1  144.0 115.5  94.0 61.6 50.0 3.5 2.6 4.4 3.8 4.5  3.3 
Dairy 99.8 59.5 61.1  36.2 38.7 23.3 2.5 1.5 4.9 3.0 2.9  1.8 
Vegetable Oils 
and Animal Fats 98.5 73.5 43.4  31.5 55.2 42.0 6.1 4.7 19.2 14.5 5.6  4.0 
Oilseeds 86.0 68.0 26.0  18.6 60.0 49.4 1.2 1.2 2.2 1.9 0.9  0.7 
Sugar 49.7 32.9 25.5  16.7 24.2 16.2 4.3 2.5 6.6 4.0 4.0  2.8 
Tropical 
beverages 109.3  93.3 82.2  70.2 27.1 23.1 2.1 1.8 4.4 3.7 2.2  1.8 
Source: FAO (2015). 
 
2  THE AGRICULTURAL MARKET INFORMATION SYSTEM (AMIS)  
2.1.  The Agricultural Market Information System (AMIS), a G20 initiative to enhance food market 
transparency, reduce price volatility and encourage coordination of policy action in response to 
market disruptions was launched in September 2011. Hosted by FAO, the AMIS Secretariat has ten m e m b e r  o r g a n i z a t i o n s :  F A O ,  I F P R I ,  I F A D ,  O E C D ,  U N C T A D ,  t h e  U N  H i g h  L e v e l  T a s k  F o r c e ,  t h e  
World Bank, WFP, WTO and the International Grains Council (IGC). 
2.2.  During its fourth year of operation, the AMIS  Secretariat used the relatively calm situation in 
international commodity markets to further consolidate and strengthen the AMIS initiative. To this 
end the Secretariat continued its regular dialogue with national focal points for the submission of 
commodity balances; trained participants of the second and third cycle of the AMIS Exchange 
Programme; and visited selected countries to establish closer collaboration with partner institutions. These efforts produced several positive outcomes, most notably a special event on the 
"Food Market Outlook: An AMIS Perspective" during the October 2015 meeting of the Global Food 
Market Information Group, which was led by AMIS participating countries. 
2.3.  The Secretariat also advanced on other crucial fronts such as the estimation of stocks 
positions, the identification of volatility driver s and the compilation of forward-looking market 
indicators. Highlights include the organization of  an expert workshop on improving stocks and 
utilization measurement in China; the design of a statistical model to detect regime changes in 
volatility; the launch of the AMIS Policy Database in October 2015 and a workshop hosted by IFPRI 
on early-warning indicators. 
2.4.  Important progress was also achieved in th e area of capacity development. For example, 
AMIS helped promote the use of computer assisted  personal interviewing techniques in Thailand G/AG/GEN/129 
 
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  and fostered the development of crop cutting  surveys in the Philippines. Other capacity 
development activities moved to implementation stages in Bangladesh, India and Nigeria. 
2.5.  The Secretariat also devoted substantial efforts to improve its outreach, for example by 
expanding its main report, the AMIS Market Monito r, and completely redesigning the web presence 
of the initiative. In addition, all webpages now apply a responsive design, meaning that they can 
be viewed easily on different devices such as desktop computers, tablets and smartphones. 
3  MARKET TRENDS FOR KEY CEREALS 
3.1.  According to the latest AMIS Market Monitor (February, 2016) and Food 
Outlook (October, 2015), world cereal production in 2015 stood at 2.531 billion tonnes, around 30 million tonnes below the 2014 record. Early prospects for 2016 cereal crops are mixed, partially influenced by the prevailing El Niño-associated weather patterns.  Under current expectations, 
wheat production will achieve a new record, at 736.8 million tonnes and coarse grains will decline 
by 31 million tonnes to 1.302 billion tonnes from last year's high. However, unfavourable weather conditions have lowered prospects for 2015 rice production, which is now forecast at 491.8 million 
tonnes, down 0.5% from 2014. Based on the latest forecasts for production and utilization, world 
cereal stocks by the close of crop seasons in 2016 are forecast at 642.4 million tonnes, 2.5 million 
tonnes (0.4%) above their already elevated opening level. Wheat will account for the biggest 
increase, followed by maize, while rice stocks are forecast to decline by 3%. This year's abundant 
supplies have resulted in continued declines in international prices for all cereals. The lower prices are not expected to stimulate trade for wheat and coarse grains, as the major cereal importing countries are holding large supplies, causing import demand to decline and the total cereal trade 
to contract by 2% to 368 million tonnes in 2015/16, while rice trade is predicted to rebound 
by 1.5% in 2016 to 45.4 million tonnes.  
3.2.  Wheat : FAO's latest forecast for wheat production in 2015 (736.8 million tonnes) is slightly 
higher (0.5%) than the previous year. The production gains are mostly on account of higher 
outputs in Australia, China, Morocco, Turkey, Uk raine and the United States. World wheat trade 
in 2015/16 (July/June) is set to contract to 151.5 million tonnes, 5 million tonnes (or 2.7%) below 
the 2014/15 level. The reduction will be mainly attributed to weaker import demand in North Africa 
and Asia, namely Morocco, the Islamic Republic of Iran and Turkey. World wheat inventories are forecast to reach 210.7 million tonnes by the end of seasons in 2016, their highest level in 13 years. Large supplies continue to push international wheat prices sharply below their previous 
year's levels and falling to their lowest levels in more than five years. 
3.3.  Coarse Grains : FAO's latest forecast for world production of coarse grains stands at 
1.302 billion tonnes in 2015/16, about 31 million tonnes or 2.3% below the record of last year. 
Maize production is forecast to reach around 1. 004 billion tonnes, about a 2.7% decline from the 
previous year. By contrast, world barley production is forecast at 144 million tonnes, up slightly from 2014. World trade in coarse grains in 2015/16 is projected to decline to 171 million tonnes, 
down 2.7% from the 2015/16 record level, largely due to lower imports by several countries in 
Asia, namely China, Indonesia and Islamic Republic of Iran. Based on the latest forecasts for global production and utilization, world stocks of coarse grains in 2015 are forecast to rise to 265.1 million tonnes by the close of the crop seasons, 1.2% above their opening levels and their 
highest level since 1986/87. Large stockpiles, slowing demand, an appreciating US dollar and large 
supplies of feed wheat from the Black Sea region , have helped to keep downward pressure on 
export prices. 
3.4.  Rice: According to the latest figures, world rice production is forecast at 491.8 million tonnes 
in 2015/16, 0.5% lower than the previous year due to unfavourable weather conditions. International trade in rice is predicted to rebound by 1.5% in 2015/2016 to 45.4 million tonnes, 
almost matching the 2014 record. Rice inventories ending in 2016 are forecast to decrease for the 
first time in eleven years. However, their volume is projected to be sufficient enough to cover a third of the 2015/16 projected rice consumption. 
4  FOOD PRICES 
4.1.  The FAO Food Price Index averaged 150.4 points in February 2016, down almost 
3 points (1.9%) from December and as much as 29 points (16%) below January 2015 (Figure 1). G/AG/GEN/129 
 
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  Among the sub-indices, sugar and dairy decreased the most, followed by cereals, oils and meat. 
The US dollar's appreciation continued to weigh on international commodity prices. The real food price index in 2016 dropped almost 12 points or 9.6% compared to 2015 (Figure 3). 
4.2.  The FAO Global Food Consumption Price Index (Figure 4) tracks changes in the cost of a 
global food basket as portrayed by the latest  FAO world food balance sheet. Representative 
international prices for each of the commodities  or commodity groups appearing in the balance 
sheet are weighted by their contribution to to tal calorie intake. The index has fallen almost 
uninterruptedly since March 2014, losing considerab le further ground in recent months. The overall 
decline is less pronounced when compared to the FAO Food Price Index (FPI). This is because international prices of foodstuffs that carry a much higher weight in trade than typical consumption have fallen at a much greater pace (most notably livestock products and especially dairy). 
5  PRICE VOLATILITY 
5.1.  International price volatility can have serious implications for LDCs and NFIDCs that depend 
on imports to meet their domestic food needs, through a deterioration in their balance of 
payments, public finance and harming consumers who spend a large portion of their income on 
food purchases. However, historical and implied price volatilities of major crops (wheat, maize and soybeans), indicate that volatility has been on a downward path since July 2015, with levels of 
volatility having fallen around 50% by the end of 2015. 
5.2.  Historical price volatility of major crops (wheat, maize and soybeans) indicates that volatility 
was higher for wheat and maize but lower for soybeans year-on-year (Figure 5, upper panel). Implied volatility, which measures the level of expected future volatility, observed in Chicago 
Board of Trade options on futures markets, was higher for all three commodities, even though 
actual price levels did not exhibit large variances over the past six months. (Figure 5, lower panel). 
Figure 1: FAO Food Price Index 
(2012-2016) Figure 2: Food Commodity Price Indices 
(2015-2016) 
 
  
Source: FAO (2016). 
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  Figure 3: FAO Food Price Index (1961-2016) 
 
Source: FAO (2016). 
 
Figure 4: FAO Global Food Consumptio n and Food Price Indices (2012-2015) 
 
Source: FAO (2015). 
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  Figure 5: Historical and Implied Volatilities (2012-2015) 
 
 
 
Source: FAO (2015). 
 
References 
AMIS. 2016. AMIS Market Monitor, February 2016. http://www.amis-outlook.org  
FAO. 2015. Food Outlook, October, 2015.  
FAO. 2016. Cereal Supply and Demand Brief, February 2016. http://www.fao.org/worldfoodsituation  
  G/AG/GEN/129  
 
- 7 - ANNEX 
Cereal imports of LDCs and NFIDCs (2003/2004 to 2015/2016) - Information as of February 2016 
 2003/  
2004 2004/  
2005 2005/  
2006 2006/  
2007 2007/  
2008 2008/  
2009 2009/ 
2010 2010/  
2011 2011/  
2012 2012/  
2013 2013/  
2014 2014/ 
2015 
(Estimate)  2015/ 
2016 
(Forecast) 
Import Bill (USD million)              
LDCs 3,704 4,218 4,417 5,943 10,679 7,769 7,698 10,669 10,646 11,203 11,075 10,288 8,953 
NFIDCs 6,714 7,620 7,561 9,636 18,794 15,037 11,625 17,839 19,890 18,881 18,702 16,265 13,567 
LDCs & NFIDCs 10,418 11,838 11,978 15,580 29,473 22,806 19,322 28,508 30,536 30,084 29,777 26,553 22,519 
% change over 2000/01-2002/03 28.9 46.4 48.1 92.7 264.5 182.1 139.0 252.6 277.7 272.1 268.3 228.4 178.5 
Total volume imported (000 tonnes)              
LDCs 19,123 20,611 20,934 20,830 21,983 24,924 26,476 26,355 25,783 25,309 29,657 30,783 30,627 
NFIDCs 34,338 39,524 38,810 37,889 44,697 49,025 44,793 48,708 52,479 46,885 56,118 57,738 55,433 
LDCs & NFIDCs 53,460 60,135 59,744 58,719 66,680 73,949 71,269 75,063 78,262 72,194 85,775 88,521 86,060 
% change over 2000/01-2002/03 -0.6 11.8 11.0 9.1 23.9 37.4 32.5 39.5 45.5 34.2 59.4 64.5 59.9 
Food aid (000 tonnes)              
LDCs 3,638 3,187 2,533 1,855 2,316 3,660 3,231 2,594 2,788 1,487 1,148 1,148 1,148 
% of total imports 19.0 15.5 12.1 8.9 10.5 14.7 12.2 9.8 10.8 5.9 3.9 3.7 3.7 
NFIDCs 550 496 364 301 327 485 505 385 491 250 198 198 198 
% of total imports 1.6 1.3 0.9 0.8 0.7 1.0 1.1 0.8 0.9 0.5 0.4 0.3 0.4 
LDCs & NFIDCs 4,188 3,683 2,897 2,156 2,643 4,145 3,736 2,979 3,279 1,737 1,346 1,346 1,346 
% of total imports 7.8 6.1 4.8 3.7 4.0 5.6 5.2 4.0 4.2 2.4 1.6 1.5 1.6 
Commercial imports (000 tonnes)              
LDCs 15,485 17,424 18,401 18,975 19,667 21,264 23,244 23,761 22,995 23,822 28,509 29,635 29,479 
NFIDCs 33,788 39,028 38,446 37,588 44,370 48,540 44,288 48,324 51,988 46,635 55,919 57,539 55,235  
  G/AG/GEN/129  
 
- 8 -  2003/  
2004 2004/  
2005 2005/  
2006 2006/  
2007 2007/  
2008 2008/  
2009 2009/ 
2010 2010/  
2011 2011/  
2012 2012/  
2013 2013/  
2014 2014/ 
2015 
(Estimate)  2015/ 
2016 
(Forecast) 
LDCs & NFIDCs 49,273 56,452 56,847 56,563 64,037 69,804 67,532 72,084 74,983 70,457 84,429 87,175 84,714 
% change over 2000/01-2002/03 0.2 14.8 15.6 15.0 30.2 41.9 37.3 46.6 52.5 43.2 71.7 77.2 72.2 
Per unit import cost (USD/tonne)               
LDCs 193.7 204.6 211.0 285.3 485.8 311.7 290.8 404.8 412.9 442.6 373.4 334.2 292.3 
NFIDCs 195.5 192.8 194.8 254.3 420.5 306.7 259.5 366.2 379.0 402.7 333.3 281.7 244.7 
LDCs & NFIDCs 194.9 196.9 200.5 265.3 442.0 308.4 271.1 379.8 390.2 416.7 347.2 300.0 261.7 
% change over 2000/01-2002/03 30.0 31.3 33.7 76.9 194.8 105.7 80.8 153.3 160.2 177.9 131.5 100.1 74.5 
Wheat export price (USD/tonne)              
US no.2 hard winter 161 154 175 212 361 270 209 316 300 347 318 266 217 
% change over 2000/01-2002/03 16.0 11.0 26.6 52.7 160.6 95.1 51.1 128.1 116.4 150.5 129.2 91.9 56.6 
Wheat ocean freight rates (USD/tonne)              
From U.S. Gulf ports to:              
Egypt 37.0 46.5 31.9 50.3 86.2 42.9 43.2 40.1 43.3 34.4 36.8 32.8 34.6 
Bangladesh 48.5 65.4 45.5 57.8 98.8 55.3 62.7 57.3 56.4 50.3 52.8 44.2 38.1 
Rotterdam 28.3 34.5 20.8 32.3 71.8 38.6 35.0 28.2 24.8 19.8 21.3 13.2 12.6 
Average 37.9 48.8 32.7 46.8 85.6 45.6 46.9 41.9 41.5 34.8 36.9 30.0 28.4 
% change over 2000/01-2002/03 139.4 208.2 106.7 195.4 440.6 187.9 196.5 164.4 161.9 119.8 133.3 89.6 79.5 
Sources: FAO (2015) and FAO (2016). 
 
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