G/AG/GEN/199  
 
11 March 2022  
(22-2224) Page: 1/6 
Committee on Agriculture  Original: English  
 
 
REPORT TO THE 100TH MEETING OF THE WTO COMMITTEE ON AGRICULTURE  
15-16 MARCH 2022  
 
COVID -19 AND AGRICULTURE  
Submission by FAO  
The following submission, dated 11 March  2022, is being circulated at the request of the Food and 
Agriculture Organization (FAO).  
 
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1  BACKGROUND  
1.1.  During the first wave of the COVID -19 pandemic in 2020, countries adopted various 
containment measures to reduce and mitigate the spread of the disease. Such measures, while 
curbing the circula tion of the virus, had a negative effect on the global economy, hampering 
production, markets and employment, and leading to a substantial increase in extreme poverty and 
food insecurity.1 According to The State of Food Security and Nutrition in the World  (SOFI)  2021,2 
global hunger increased in 2020 under the shadow of the COVID -19 pandemic, with estimates 
ranging from 70 to 161 million more people facing hunger in 2020 than in 2019. Moreover, in  2021, 
155 million people in 55 countries/territories were in crisis or worse (IPC/CH Phase  3 or above),3 an 
increase of around 20 million people from 2019, as per 2021 Global Report on Food Crises4 report. 
COVID -19 and its impacts, together with conflicts and adverse weather events, w ere the main factors 
behind the deterioration in food insecurity.  
1.2.  The pandemic also resulted in a dual shock affecting both food supply and demand, with the 
measures to control the spread of the disease affecting supply chains and their various components,  
including production, processing, logistics, and retail. However, the efforts of governments and 
agricultural sector stakeholders worldwide to keep agricultural markets open and agrifood trade 
flowing smoothly have contributed to remarkably resilient agri cultural commodity markets.  
1.3.  The global economy showed signs of recovery in 2021 with global growth estimated at 5.9 %5, 
after a 3.1 % contraction in 2020. Global growth is expected to slow down to 4.4 % in 2022. Economic 
recovery is uneven across countries,  however, with global income inequality between -countries 
increasing, rolling back progress made over the past decade6. In fact, although output and 
 
1 FAO. 2021. Agricultural trade & policy responses during the first wave of the COVID -19 pandemic 
in 2020. Rome. https://www.fao.org/3/cb4553en/cb4553en.pdf .  
2 FAO, IFAD, UNICEF, WFP and WHO. 2021. The State of Food Security and Nutrition in the World 2021. 
Transforming food systems for food sec urity, improved nutrition and affordable healthy diets for all. Rome, 
FAO. https://doi.org/10.4060/cb4474en .  
3 IPC/CH Phase 3: households either have food consumption gaps that are reflected by high or 
above-usual acute malnutrition; or are marginally able to meet minimum food needs but only by depleting 
essential livelihood assets or through crisis -coping strategies.  
4 FSIN and Global Network Against Food Crises. 2021. Global Report on Food Crises 2021. Rom e. 
https://www.fsinplatform.org/sites/default/files/resources/files/GRFCpercent202021percent20050521percent2
0med.pdf   
5 IMF. 2 022. World Economic Outlook Update, January 2022. Washington, DC. 
https://www.imf.org/en/Publications/WEO/Issues/2022/01/25/world -economic -outlook -update -january -2022  
6 World Bank. 2022. Global Economic Prospects, January 2022. Washington, DC. 
https://www.worldbank.org/en/publication/global -economic -prospects   G/AG/GEN/199  
 
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  investment in advanced economies are projected to return to pre -pandemic trends in 2023, in 
developing eco nomies they will remain markedly below.  
2  THE STATE OF GLOBAL FOOD MARKETS  
2.1  Current situation and prospects  
2.1.1   Production  
2.1.  According to the latest FAO estimates, world production of cereals in 2021 stood at 
2,796 million tonnes, 0.7 % higher from the previous year. Global production of wheat is expected 
to reach 775.4 million tonnes, 0.1 % lower year -on-year. The forecast for global coarse grains, 
including maize, barley and sorghum, is pegged at 1 ,501 million tonnes, 1.2 % higher than l ast year. 
Global rice production is seen heading towards an all -time high in 2021, sustained by yield 
improvements and a slight area increase in Asia. Looking ahead to the 2022 world cereal outturn, 
FAO's preliminary forecast for global wheat production po ints to a likely fourth consecutive annual 
increase to 790 million tonnes. The escalation of the conflict in Ukraine, however, casts some 
uncertainty over the final production outcomes, as disruptions to services, damage to infrastructure 
and population di splacements could prevent farmers from attending their fields and harvesting and 
marketing their crops.   
2.2.  Regarding production of coarse grains, harvesting of the 2022 crops is to begin in the next 
months in the Southern Hemisphere countries, while in count ries north of the equator, plantings 
have not yet begun. In South America, maize outputs in Argentina and Brazil in 2022 are forecast 
at well above -average levels, notably in Brazil where the maize output is foreseen to reach a record 
high of 112  million t onnes. In Southern Africa, the maize outturn is foreseen to remain above 
average in 2022, resting on beneficial weather conditions.  
2.3.  For oilseeds and derived products in 2021/22, the current forecasts point to a tightening market 
situation. While weather -related repercussions in global soybean and rapeseed production 
underpinned tight oilseed supplies, the below -potential world palm oil output was partially explained 
by limited migrant workforce due to COVID -19 restrictions, particularly in Malaysia.  
2.4.  The fo recast for world sugar production in 2021/22 stands at around 173 million tonnes, slightly 
up from the reduced level in 2020/21. The upturn is largely based on expectations of production 
recoveries in the European Union and Thailand, coupled with favourabl e prospects in India. By 
contrast, production is expected to decline in China and in Brazil, the world 's largest producer. The 
forecast for world sugar trade in 2021/22 is pegged at around 60 million tonnes, slightly down from 
the estimated volume in 2020/ 21. This mainly reflects lower exports by Brazil and India, compared 
with their record sales in 2020/21, while import demand, particularly from Asia, is also anticipated 
lower year on year.  
2.5.  World meat production in 2021 is forecast to rise by 4.3 % year-on-year to about 352  million 
tonnes, principally based on expectations of a strong output rebound in Asia. Likewise, in 2021, 
global milk production is anticipated to expand by 1.1 % to 923 million tonnes, with likely expansions 
in all regions, led by Asia.  
2.1.2   Trade  
2.6.  Global trade in cereals in 2021/22 is forecast to expand by 0.9 % from the 2020/21 level to 
484 million tonnes. Trade in wheat is forecast at a record of 194 million tonnes, 2.5 % above 2020/21 
level, whereas trade in coarse grains is expected to reach  237 million tonnes, registering a 0.9 % 
contract from the previous year. This forecast, however, does not yet assume potential impacts of 
the conflict in Ukraine on trade flows from Ukraine and the Russian Federation.7 
 
7 FAO is closely monitoring the developments and will assess the impacts on the 2021/22 global cereal 
trade in due course.  G/AG/GEN/199  
 
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  2.7.  Trade in rice is anticipated to sust ain a third successive annual expansion in 2022 
(January -December) to 53.4 million tonnes. The bumper rice harvest is expected to facilitate a third 
successive annual increase in international trade in rice.  
2.8.  World meat trade for 2021 is forecast to exceed  42 million tonnes (carcass weight equivalent), 
a 1.2% increase from 2020, but making the slowest pace of growth in six years. This deceleration 
primarily results from an anticipated import contraction in China and some leading meat importing 
countries in Europe, reflecting increased national availabilities, as well as an incomplete food service 
recovery and logistical bottlenecks, following COVID -19 related social distan cing requirements.  
2.9.  World milk trade is also forecast to rise by 2.7 %, with high import  concentration in China. By 
contrast, several countries in East Asia, Europe and the Middle East decreased imports, reflecting 
lower consumer demand, quota decisions and COVID -19 market disruptions.  
2.2  International food prices  
2.10.   The FAO Food Price Index (FFPI)  averaged 140.7 points in February 2022, up 
5.3 points  (3.9%) month -on -month and as much as 20.7 points (24.1 %) above its level a year ago. 
This represents a new all -time high (in nominal terms), exceeding the previous top of February  2011 
by 2.2 %. The Fe bruary rise was led by increases in international vegetable oil and dairy prices, while 
those of cereals and meat were also up. By contrast, the sugar price sub -index fell for the third 
consecutive month.  
2.11.   Concerning year -on-year increases, the FAO Vegetab le Oil Price sub -Index registered the 
sharpest increase (36.8 %), followed by dairy (24.8 %), meat (15.3 %), cereals (14.8 %) 
and sugar  (10.4 %).  
Food Price Indices  Peak  values     (points)  Feb-22 Change  
 
 
m/m 
(percent)  Change  
 
 
y/y 
(percent)  Change:   
Feb 2022 over 
peak values  
 
percent  
FAO Food Price Index  Feb-11 137.6  140.7  3.9 20.7 2.3 
Cereals  Mar-08 163.3  144.8  3.0 14.8 -11.3 
Oils Jun-08 178.2  201.7  8.5 36.8 13.2 
Sugar  Jan-11 183.2  110.6  -1.9 10.4 -39.6 
Meat Aug-14 119.2  112.8  1.1 15.3 -5.4 
Dairy  Dec-13 156.5  141.1  6.4 24.8 -9.8 
 
2.12.   The rise in the Vegetable Oil price sub -index was driven principally by supply -side factors, 
especially production disruptions, stemming from unfavourable weather in some large producing 
countries in South America, Southeast  Asia and the Black Sea regions.  Palm oil sector in Malaysia 
also faced constraints from migrant labour shortage, resulting from travel restrictions related to 
the COVID -19 pandemic.  
2.13.   Price increases in the dairy sector were largely attributed to strong import demand, especially 
from Asi a, and moderate increases in global export availabilities, especially from Western Europe 
and Oceania.  
2.14.   In the case of global meat prices, increased global demand, which often outstripped supply 
availabilities in major producing regions, led to price incre ases. Shortages of cattle for slaughter in 
South America and Oceania, in particular, were a serious concern.  
2.15.   World cereal prices also increased significantly, notwithstanding positive overall production 
results achieved during the past 2020/21 (July -June)  season, as well as expectations of record global 
cereal output being achieved during the ongoing 2021/22 season.  
2.16.   After reaching multi -year highs in the third quarter of 2021, international sugar prices declined 
and in February 2022, they reached the lowe st level since July last year. Favourable production 
prospects in major exporting countries, notably India and Thailand, coupled with improved weather 
conditions in Brazil weighed on world sugar prices. The decline in ethanol prices from December  2021 
to February in Brazil exerted further downward pressure on world sugar prices.   G/AG/GEN/199  
 
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  2.17.   Weather uncertainty, especially arising from La Niña weather phenomenon, volatile oil and 
freight markets, high transport and energy costs, as well as policies that resulted in spi kes in input 
costs, all affected important food suppliers worldwide.  
2.3  Fertilizer prices  
2.18.   Prices of fertilizers have also surged throughout the last year (Figure 1). Prices for urea, a 
key N -fertilizer, have more than trebled over the past 12 months, e.g., n ominal quotations for black 
sea spot prices (bulk) have risen from USD 265/tonne in January 2021 to USD  846/tonne 
in January  2022.  
2.19.   Prices for phosphorous fertilizer (P) have risen in tandem. Those for diammonium phosphate, 
or DAP, a key composite P fertili zer, have raised from USD 421/tonne to USD 699/tonne over the 
same period. Clearly, the price increase for DAP fertilizer also reflects higher prices for the 
N-component. There was, however, also an equal effect from higher P -fertilizer prices, which is 
estimated to have accounted for about 50 % of the overall increase in DAP prices. On the other hand, 
prices for potash (K -fertilizer) remained less affected over the past 12 months.  
Figure 1: Recent trends in fertilizer prices  
   
Source:  Index Mundi . 
 
2.20.   The reasons behind such growth include the introduction of certain trade measures, the high 
cost of transportation, and the high level of energy prices. For instance, in response to rising global 
demand for fertilizers and rising domestic prices, some key suppliers have responded with export 
restrictions placing further upward pressure on international fertilizer prices (especially in late  2021). 
Concerning transportation costs, the COVID -19 pandemic has caused widespread disruptions in 
international supply  chains, resulting in higher freight costs and longer transit times (see section 
below). Finally, the high and rising price for natural gas played a pivotal role, for instance in the 
production of N -fertilizer.  
2.21.   High and volatile fertilizer prices have giv en rise to concerns about low fertilizer availability 
in 2022/23, with potentially adverse effects on food production and food security. For instance, in 
poorer countries, fertilizer use could decline fast, with farmers facing lower availabilities and be 
forced to reduce applications.  
2.4  Trade costs  
2.22.   Building on steep gains in the first quarter of 2021, freight costs rose rapidly from May to 
October  2021, with the Baltic Dry Index (BDI) rising by 44 % and the IGC Grains and Oilseeds Freight 
Index  (GOFI) increas ed by 53 %. These increases were largely a reflection of buoyant grains and 
oilseeds trade, upturn in coal import demand against the rising natural gas pieces and expectations 
for global dry bulk fleet supply to fall in 2022.  
2.23.   Logistical and weather -related  challenges also featured, notably in China, where stricter 
COVID -19-related rules increased vessel turnaround times and worsened congestion at local ports. 
G/AG/GEN/199  
 
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  According to data from Lloyd 's List Intelligence, as of late October 2021, around 7 % of the global 
bulk fleet was waiting at Chinese ports to either load or discharge cargo. Delivery costs on the main 
grains and oilseeds routes, comprising of marine fuel and other associated charges, also surged 
from May to October. Freight markets lacked clear directio n at times, as new waves of COVID -19 
infections in some countries led to supply and demand uncertainties.  
2.24.   Freight costs, as measured by GOFI and BDI (Figure 2), have fallen after peaking at a 13 -year 
in early October 2021, but ocean freight costs remained high at historically high elevated levels in 
February 2020, with prices across the grains and oilseeds carrying segments averaging around 75 % 
higher year -on-year.  
Figure 2. Freight costs by GOFI and BDI  
 
 
 
2.25.   During the COVID -19 pandemic, different containment measures globally hampered the 
normal operations of government authorities involved in the provision of certificates and other 
licenses and approvals needed for trading agricultural products (including SPS certificates).8 
2.26.   Moreover, i n many parts of the world, additional health controls at border crossing, including 
screening of drivers and disinfection of cargo vehicles, implied longer clearance times and higher 
costs in trading across borders.  
2.27.   To facilitate trade in agrifood during t he pandemic several countries implemented measures 
to accept electronic version of phytosanitary and veterinary certificates, and simplif ied import 
licensing procedures for selected products .9 
2.28.   Likewise, some countries made advances in digitalizing governm ent procedures, and some 
regions established corridors that allowed for increased automation and more efficient data sharing 
among customs and related authorities, at selected border crossings and for a selected list of 
essential products, including food.  
3  FAO'S RECOMMENDATIONS  
3.1.  While the full economic and social impacts of the pandemic are still unfolding, the disease 
continues to spread and represent a significant source of uncertainty for agrifood markets and trade.  
3.2.  To reduce risks to food security, gover nments need to continue implementing measures to 
support vulnerable population groups. In this regard, safety nets and social protection programmes, 
 
8 FAO. 2021. Agricultural trade & policy responses during the fir st wave of the COVID -19 pandemic 
in 2020. Rome. https://www.fao.org/3/cb4553en/cb4553en.pdf . 
9 Ibid. 
G/AG/GEN/199  
 
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  including domestic food aid and cash transfers, could help support consumption during times of high 
food pr ices, reduced incomes and higher inequality.  
3.3.  Likewise, investing in marketing and trade infrastructure will be crucial. These include last mile 
infrastructure, electricity and water provision, as well as ICT service provision. Concerning the latter, 
adequ ate regulatory and institutional frameworks to further digitalize trade procedures and supply 
chain operations, such as electronic certificates, will be needed.  
3.4.  Countries also need to support agricultural development by enhancing productivity and 
expandin g market access for farmers and rural SMEs. This requires investments in R&D, training 
and extension, as well as programs promoting access to quality inputs (including seeds, fertilizers, 
and machinery).  
3.5.  Lastly, it is important to keep markets open and ens ure uninterrupted and efficient trade flows, 
including through efforts to stir cooperation among countries to reduce trade restrictions, improving 
transparency in markets, and strengthening international governance and coordination mechanisms 
in customs pr ocedures and application of SPS measures.  
3.6.  In this regard, initiatives such as FAO 's Global Information and Early Warning System  (GIEWS) 
and the G20 Agricultural Market Information System  (AMIS) play a crucial role by providing timely 
and reliable data and  information on global food markets and the most recent policy developments. 
This is important for transparency in market conditions and policy changes. Furthermore, the Rapid 
Response Forum  (RRF) of AMIS provides a unique platform for promoting early disc ussion about 
critical market conditions and ways to address them.  
 
 
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