G/AG/GEN/114  
 
23 September 2013  
(13-5086)  Page: 1/9  
Commitee on Agriculture  Original: English  
 
FAO REPORT TO THE WTO COMMITTEE ON AGRICULTURE 2013 
SUBMISSION BY FAO 
The following submission, dated 20 September 2013, is  being circulated at the request of the Food 
and Agriculture Organization (FAO). 
 
_______________ 
 
 This is the contribution of FAO to the annual monitoring exercise of the WTO Committee on Agriculture (CoA). This report draws in larg e part on the June 2013 issue of the FAO Food Outlook  
and the September 2013 issue of the Agricult ural Market Information System (AMIS) Market 
Monitor . As in previous years, the focus of FAO's report to the CoA is on developments in the cost 
of imports of basic foodstuffs, highlighting in part icular trends in food im port bills of the Least 
Developed and Net Food-Importing Developing Countries (the LDCs and NFIDCs, respectively). In 
addition, FAO reports on developments in food pr ice volatility and on market trends in basic 
foodstuffs, as well as on the seco nd year of operation of AMIS.  
 
1  FOOD IMPORT BILLS  
1.1.  The 2013 forecast for the global food import bill is set at USD 1.09 trillion, almost the same 
with the previous year and 13% lower than the re cord level of 2011 (Table 1). Although a slight 
increase is forecast on average, the pattern differs across the main commodity groups.  
1.2.  In absolute terms, the largest declines we re observed in vegetable oils and animal fats 
(USD15 billion reduction) and sugar (USD 8.3 billion reduction). Cereals and oilseeds also 
experienced a decline of almost USD 1 billion. However, the global import bills of the remaining 
commodities reported in Table 1 increased. The largest increase was observed in dairy (USD 10.4 billion increase), followed by meat (a lmost USD 10 billion), and fish (USD 9.3 billion). 
The large volumes of imports, higher world market quotations for dairy products and fish led to the 
higher projected import bills for these products. 
1.3.  The import bills for LDCs and Low Income Food Deficit Countries (LIFDCs) remained stable. 
However, it should be noted that lower world prices for some of the key commodities such as 
tropical beverages may lead to lower term s of trade for export oriented countries. 
1.4.  The cereal import bills for these two gr oups of countries, which are the target of the 
Marrakesh Ministerial Decision on Measures Concerning the Possible Negative Effects of the Reform 
Programme on Least-Developed and Net Food-Importing Developing Countries , are expected to 
amount to approximately USD 8.8 billion and USD 17.1 billion respectively in 2013/14 period based on data updated in August (see Annex Tabl e). These are slightly lower than the previous 
2012/13 period. Lower international prices of cereals and oils contributed to lower food import bills 
as compared to the previous period. 
1.5.  Food aid represents a small proportion of total cereal imports at 5.2% and 0.4% for LDCs 
and NFIDCs respectively, continuing a downward trend from the higher rates of the early 2000s. 
The per unit import costs are forecast to be lower at USD 359 per tonne on average, in 2013/14 
period falling from USD 416 per tonne on average in the previous period. G/AG/GEN/114 
 
- 2 - 
 
  Table 1: Forecast of food import bills, USD billion 
 World Developed Developing LDC LIFDC Sub-Saharan 
Africa 
 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013  
TOTAL 
FOOD 1091.7 1094.0 675.7 677.7 416.0 416.3 29.1 28.6 193.3 193.9 36.9 37.5  
Vegetable 
and Fruits 190.6 191.8 144.7 145.6 45.8 46.1 26 2.6 17.8 17.9 2.7 2.7  
Cereals 164.4 163.3 76.9 73.2 87.4 90.1 9.4 9.7 35.9 38.4 12.7 13.5  
Meat 118.8 128.7 89.3 92.1 29.5 36.6 1.8 1.8 6.9 10.3 2.4 2.6  
Fish 112.5 121.8 85.5 92.5 27.0 29.3 0.6 0.6 7.9 8.5 3.1 3.4  
Dairy 45.8 56.2 29.6 36.3 16.2 19.9 0.9 1.0 4.4 5.3 1.3 1.6  
Veg. Oils 
& Animal 
Fats 99.1 92.8 44.0 41.2 55.0 51.5 5.8 5.3 33.6 32.7 4.7 4.2  
Oilseeds 77.3 76.2 25.5 25.3 51.8 50.9 0.6 0.4 43.8 43.4 0.3 0.3  
Sugar 47.0 38.7 22.5 18.5 24.5 20.3 3.2 2.8 12.7 10.5 3.3 2.9  
Source: FAO, 2013. 
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 uncertainty has been operational since September 2011. Hosted by FAO, the AMIS 
Secretariat has ten member organizations includ ing FAO, IFPRI, IFAD, OECD, UNCTAD, the UN 
High Level Task Force, the World Bank, WFP and WTO and most recently, the International Grains Council (IGC) as members. 
2.2.  During its second year, the AMIS Secretariat completed the compilation of a historical 
database of supply and demand balances, and started to support AMIS participating countries in their submission of forecast information. Related activities included the harmonization of 
methodologies, the integration of national data into the AMIS database, and the setting up of 
improved IT services. Using these data and other resources, the efficiency of the AMIS Market 
Monitor has improved. Starting from the latest ed ition (September 2013), the report now features 
inputs from the GEOGLAM group, which provides an update on the growing conditions of AMIS 
crops in the world's major producing regions.  
2.3.  In terms of market indicators, the AMIS Secretariat further developed the database of market 
drivers, which can be accessed online on a designated website, by expanding the set of variables 
and automating their update. In addition, an hist orical database of policy indicators has been 
constructed and is currently being integrated into a web application. Important progress has also been achieved on research and capacity building  projects operated by AMIS. Specifically, case 
studies currently investigate cereal consumption in six AMIS participating countries, while capacity 
development activities are gradually commencing in  Bangladesh, India, Nigeria, Thailand and the 
Philippines. Finally, the AMIS Secretariat consolidated its funding situation with current donors 
planning to continue their support and with new partners negotiating areas of future engagement. 
3  MARKET TRENDS FOR KEY CEREALS 3.1.  According to the latest AMIS Market Monitor (September 2013) world wheat production is 
estimated to increase by 7.5% compared to the previous year. Trade in wheat in 2013/14 is 
expected to increase because of larger imports from China and Egypt, and world stocks are 
expected to increase by 8%. World maize producti on is expected to increase by 12% because of 
the improved outlook for the European Union and Uk raine. Trade in 2013/14 is expected to expand 
slightly as lower prices stimulate imports. Ending stocks display a significant increase (30%), with 
most of the increase occurring in the United States. The forecast of rice production displays a 1.3% increase from the previous year. Although production in China, Indonesia, and Madagascar G/AG/GEN/114 
 
- 3 - 
 
  decreased, overall production in rest of the Asia has resulted in a slightly higher forecast. Trade is 
forecast to remain stable, while stocks will increase by 4%. World soybean production is set to rise by 7% due to the production gains in Argentina, United States, Brazil, and India. Trade and stocks 
are expected to expand by 7% and 24% respectively. Detailed annual developments are provided 
below. 
3.2.  Wheat : FAO's latest forecast for wheat production in 2013 (710 million tonnes) is higher 
than the July forecast due to the favourable prospects in the European Union, CIS countries, 
Australia, Argentina, and Canada. Trade forecasts displayed a small increase because of the larger 
imports from China and Egypt. Stock endings in 2014 are expected to reach 170 million tonnes (8% increase), with most of the increase concentrated in the European Union, China, and CIS countries. The largest increase in world inventories is forecast for China, which also has a record 
production this year. Based on the primary su pply and demand assessments, global markets are 
expected to have more stability and prices are expe cted to retreat from the high levels of 2012/13. 
The international wheat prices displayed a lower trend after the first half of the year. A poor 
harvest in Argentina, concerns over winter wheat conditions in the Unites States, and an increase 
in feed demand for wheat caused by higher maize prices had an upward pressure on world wheat prices. Favourable prospects for 2013 harvest especially in the Black Sea region and previous 
stocks put downward pressure on prices in the second half of the year. As a result, wheat export 
price (US No.2 H.W. Gulf) averaged USD 329 per to nne in second half of the year. Wheat future 
prices also displayed similar trend averaging USD 260 per tonne.  
3.3.  Coarse Grains : FAO's latest forecast for world production of coarse grains is 1.25 billion 
tonnes, 8.5% higher than the previous year, due to good crop prospects in the United States, 
China, and South America. World trade in coarse grains is expected to increase by 3% in 2013/14, reaching a record of 133 million tonnes. Maize trade accounts for the highest volume in coarse 
grains with 103 million tonnes. The majority of the increase in trade is expected to occur in Asia 
amounting to 55.6 million tonnes (an 11% increase from previous year). World barley trade is expected to remain steady at 19 million tonnes followed by sorghum at 7.5 million tonnes. The 
recovery of the maize supply in the United States  is expected to boost exports, together with 
higher exports from Russia and Ukraine. Based on the current production forecasts, global 
inventories of coarse grains are expected to reach 214 million tonnes in 2014. This amount is 24% higher than the previous season and the highest since 2000. A strong recovery in the production of 
coarse grains has put downward pressure on prices in future markets (USD 223 per tonne for 
December delivery) representing an  8% decrease from July values. 
3.4.  Rice: According to the latest forecasts, world rice production in 2013/14 season is expected 
to rise to 497 million tonnes, 1.3% higher than the previous year. Although rice production 
prospects are lowered for China, Indonesia and Madagascar, overall supply prospects are high in Asia. Trade prospects for 2014 are raised slightly reaching 38 million tonnes. The ending stocks in 
2014 are expected to be 4% higher than opening levels. International rice prices were generally 
stable in the first half of the year. The FAO All Rice Price Index averaged 240 points and on average prices were 2% higher than previous year. Thailand's expected release of large amounts of rice from public stocks, India's extension of  the subsidized rice distribution programme, and 
China's import requirements are expected to impact  w o r l d  r i c e  p r i c e s  i n  t h e  s e c o n d  h a l f  o f  t h e  
year.  
4  FOOD PRICES 
4.1.  The FAO Food Price Index averaged 201.8 in  September 2013, down 4 points (1.9%) from 
July and 11 points (5.1%) from August 2012 (Fig ure 1). The decline is largely due to reduced 
international prices of cereals and oils which offset slight increases in dairy, meat and sugar prices 
(Figure 2). The real food price index in 2013 remained close to that of 2012 (Figure 3). 
4.2.  The FAO Global Food Consumption Price Index (Figure 4) tracks changes in the cost of the 
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 total calorie intake. The index displayed an upward 
trend in the second half of 2012, but then levelled off in the first half of 2013.  G/AG/GEN/114 
 
- 4 - 
 
  5  PRICE VOLATILITY 
5.1.  Historical price volatility of major crops (wheat, maize, soybeans, and rice) indicates that the 
volatility of wheat decreased in recent months, while the volatility of soybeans showed an increasing trend. The historical volatility of maize displayed a sharp decrease in late August due to 
good yield prospects that decreased uncertainty. Rice prices were more stable during the period. 
Implied volatilities, which show the level of expected future volatility observed in Chicago Board of Trade options on future markets, decreased fo r wheat but increased marginally for maize and 
soybeans at the end of August. (Figure 5). 
5.2.  Price volatility can have significant implications for LDCs and NFIDCs. Importing countries 
that face high prices experience a deterioration in the balance of payments and public finance. High food prices can result in inflation and high import bills and cause current account balance 
deficits. Fiscal measures, such as cuts in import tariffs and in taxes on food, subsidization of food 
consumption, and risk management tools lead to increased budgetary costs. Since consumers in developing countries spend a significant portion of their total income on basic foodstuffs, there are 
also longer term impacts on the poorest and most vulnerable such that spending is switched to 
less nutritious foods and away from other basic needs. The higher price volatility of maize 
observed this year may lead to instability in livestock and poultry production decisions through 
feed prices and may raise prices in the short and medium term. 
Figure 1: FAO Food Price Index (2009–2013) 
 
Source: AMIS, September 2013.  
G/AG/GEN/114 
 
- 5 - 
 
  Figure 2: Food Commodity Price Indices (2012–2013) 
  
Source: AMIS, September 2013. 
 
Figure 3: FAO Food Price Index (1990–2013) 
 
Source: AMIS, September 2013. 
 
G/AG/GEN/114 
 
- 6 - 
 
  Figure 4: FAO Global Food Consumpt ion and Food Price Indices (2010–2013) 
 
Source: AMIS, September 2013. 
 
 
Figure 5: Historical and Implied Volatilities (June 2012–August 2013) 
 
 
 
G/AG/GEN/114 
 
- 7 - 
 
   
Source: AMIS, September 2013. 
 
 References AMIS (2013). AMIS Market Monitor, September 2013. http://www.amis-outlook.org  
FAO (2013). Food Outlook, June, 2013.  
 
  G/AG/GEN/114  
 
- 8 - ANNEX 
Cereal imports of LDCs and NFIDCs (2001/2002 to 2013/2014) - Information as of August 2013 
 2001/  
2002 2002/ 
2003 2003/  
2004 2004/ 
2005 2005/  
2006 2006/ 
2007 2007/ 
2008 2008/ 
2009 2009/ 
2010 2010/  
2011 2011/  
2012 2012/ 
2013 
(Estimate)  2013/ 
2014 
(Forecast) 
Import Bill 
(USD million)              
LDCs 2530 3395 3644 4175 4282 5956 10739 7768 7693 10257 9862 10189 8868 
NFIDCs 5234 5967 6682 7618 7604 9628 18822 15113 11698 18046 19972 18552 17183 
LDCs & NFIDCs 7764  9362 10325  11793  11886  15584  29561  22880  19391  28303  29834  28741  26050 
% change over 
2000/01-2002/03 -4.0 15.7 27.6 45.8 46.9 92.6 265.4 182.8 139.7 249.8 268.8 255.3 222.0 
Total volume 
imported (000 
tonnes)              
LDCs 17156 20841 18584 20392 20635 21308 22136 24947 26450 25225 23982 22977 23597 
NFIDCs 36664 34843 34173 39503 39124 38172 44758 49213 44920 49122 52476 45616 48958 
LDCs & NFIDCs 53820  55685 52757  59896  59759  59479  66894  74160  71370  74347  76458  68592  72554 
% change over 
2000/01-2002/03 0.0 3.4 -2.0 11.2 11.0 10.5 24.2 37.7 32.5 38.1 42.0 27.4 34.7 
Food aid (000 
tonnes)              
LDCs 2902 3902 3638 3187 3163 2562 2308 3652 3108 2364 2582 1237 1237 
% of total imports 16.9 18.7 19.6 15.6 15.3 12.0 10.4 14.6 11.7 9.4 10.8 5.4 5.2 
NFIDCs 1084 727 550 496 458 615 327 485 460 350 426 215 215 
% of total imports 3.0 2.1 1.6 1.3 1.2 1.6 0.7 1.0 1.0 0.7 0.8 0.5 0.4 
LDCs & NFIDCs 3986  4629 4188  3683  3621  3178  2635  4138  3568  2714  3008  1452  1452 
% of total imports 7.4 8.3 7.9 6.1 6.1 5.3 3.9 5.6 5.0 3.7 3.9 2.1 2.0  
  G/AG/GEN/114  
 
- 9 -  2001/  
2002 2002/ 
2003 2003/  
2004 2004/ 
2005 2005/  
2006 2006/ 
2007 2007/ 
2008 2008/ 
2009 2009/ 
2010 2010/  
2011 2011/  
2012 2012/ 
2013 
(Estimate)  2013/ 
2014 
(Forecast) 
Commercial imports 
(000 tonnes)              
LDCs 12269 14254 16939 14946 17205 17472 18745 19828 21295 23342 22861 21400 21739 
NFIDCs 34510 35580 34116 33623 39008 38666 37556 44431 48727 44460 48771 52050 45401 
LDCs & NFIDCs 46779  49834 51055  48569  56213  56138  56301  64258  70022  67802  71633  73450  67140 
% change over 
2000/01-2002/03 -5.0 1.2 3.7 -1.3 14.2 14.0 14.4 30.5 42.3 37.7 45.5 49.2 36.4 
Per unit import cost 
(USD/tonne)               
LDCs 147.5 162.9 196.1 204.7 207.5 279.5 485.2 311.4 290.8 406.6 411.2 443.4 375.8 
NFIDCs 142.8 171.3 195.5 192.8 194.4 252.2 420.5 307.1 260.4 367.4 380.6 406.7 351.0 
LDCs & NFIDCs 144.3  168.1 195.7  196.9  198.9  262.0  441.9  308.5  271.7  380.7  390.2  419.0  359.0 
% change over 
2000/01-2002/03 -3.8 12.2 30.6 31.3 32.7 74.8 194.8 105.8 81.2 154.0 160.3 179.5 139.5 
Wheat export price 
(USD/tonne)              
US no.2 hard winter 127 161 161 154 175 212 361 270 209 316 300 347 313 
% change over 
2000/01-2002/03 -8.5 15.9 16.0 11.0 26.6 52.7 160.6 95.1 51.1 128.1 116.4 150.5 125.7 
Wheat ocean freight 
rates (USD/tonne)              
From U.S.  
Gulf ports to:              
Egypt 15.0 16.7 37.0 46.5 31.9 50.3 86.2 42.9 43.2 40.1 43.3 34.4 36.0 
Bangladesh 18.5 22.5 48.5 65.4 45.5 57.8 98.8 55.3 62.7 57.3 56.4 50.3 53.0 
Rotterdam 11.0 12.5 28.3 34.5 20.8 32.3 71.8 38.6 35.0 28.2 24.8 19.8 21.5 
Average 14.8  17.2 37.9  48.8 32.7 46.8 85.6 45.6 46.9 41.9 41.5 34.8 36.8 
% change over 
2000/01-2002/03 -6.3 8.7 139.4 208.2 106.7 195.4 440.6 187.9 196.5 164.4 161.9 119.8 132.6 
 
__________