G/AG/GEN/174  
 
26 November 2020  
(20-8548) Page: 1/4 
Committee on Agriculture  Original: English  
 
FAO REPORT TO THE 96TH MEETING OF THE WTO COMMITTEE ON AGRICULTURE  
30 NOVEMBER -1 DECEMBER 2020  
"NET FOOD -IMPORTING DEVELOPING COUNTRIES (NFIDCS)"  
Submission by FAO  
The following submission, dated 25 November 2020, is being circulated at the request of the Food 
and Agriculture Organization (FAO).  
 
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1  BACKGROUND  
1.1.  The measures to control the spread of COVID -19 and mitigate its impacts have put under stress 
many supply chain related activities. Restrictions on the  movement of people - and people falling ill 
- led to significant shortages in workforce in farming, processing, and distribution facilities. Similarly, 
issues have been recorded regarding transportation, both at local and international level. Concerning 
domestic markets, travel and movement restrictions hindered the ability of traders and farmers to 
sell the agricultural produce in local markets, lowering market availabilities for consumers and 
restricting income opportunities for small -scale farmers. In t his context, pre -existing crises – 
e.g. stemming from extreme climate -related events, the African swine fever disease in Asia and the 
locust outbreak in East Africa – have further complicated the situation in many countries, particularly 
the Net Food -Impor ting Developing Countries (NFIDCs).  
1.2.  The present note provides an overview of the current market situation and international price 
trends for the major food commodities, discusses policy responses to COVID -19 in NFIDCs, and 
advances recommendation to avoid the pandemic turning into a food crisis.  
2  GLOBAL FOOD MARKETS SITUATION  
2.1.  According to the latest FAO estimates, world production of cereals in 2020 is forecast to 
increase by 43 million tonnes from the previous year and reach a new record level of 2 ,750 million 
tonnes. Global production of wheat is expected to reach 762.7 million tonnes, slightly up (0.1 %) 
from 2019. The forecast for global coarse grains also points to a new record output of 1 ,478 million 
tonnes, a 2.4 % increase from 2019. Likewise, maize  production is seen to rise by 1.9 % to an all -time 
high, pegged at 1 ,160 million tonnes. World rice production (milled basis) is set to reach 
508.7  million tonnes in 2020, up 1.5 % from 2019. By contrast, global meat production is forecast 
to decline by 0.5 %, from 339 in 2019 to 337.3 million tonnes in 2020. Milk production in 2020 is 
predicted to expand, from 848 million tonnes in 2019 to 860.1 (up  1.4% year-on-year).  
2.2.  Regarding stocks, the forecast for world cereal inventories by the close of seasons in 20 21 has 
been lowered by 13.6 million tonnes since October to 876 million tonnes, just 0.5 % above opening 
levels and now falling below the 2017/18 record. The resulting world cereals stocks -to-use ratio in 
2020/21 stands at 31.1 %, slightly below the 31.8 % registered in 2019/20, but still relatively high 
from a historical perspective (Table 1). By the close of seasons in 2021, global wheat inventories 
are forecast to reach 281 million tonnes, up 1.9 % from 2020 (275.8 million tonnes). However, this 
increase is largely the result of a sharp rise in China 's stock levels to 139  million tonnes, accounting 
for nearly half of global stocks. Global coarse grains inventories in 2020/21 will likely drop slightly, G/AG/GEN/174  
 
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  from 413.9 to 413 million tonnes, amounting to 0.2 % below their opening levels. Global rice 
inventories at the close of the 2020/21 marketing seasons are forecast at 182.0 million tonnes, 
0.2% less than the 2019/20 estimate (182.4 million tonnes), which represented the second highest 
volume on record.1 
Table 1. Stock -to-use ratios* for cereals (%)  
 2016/17  2017/18  2018/19  2019/20 
estimate  2020/21 
forecast  
World stock -to-use ratio  31.7 21.9 32.3 31.8 31.1 
Major exporters ' 
stock -to-disappearance ratio2 17.8 18.3 18.9 18.3 18.6 
Source: FAO  
2.3.  Global trade in cereals in 2020/21 is predicted to expand by 3 % from the 2019/20 level to 
reach nearly 452 million tonnes. Trade in wheat is forecast at a new record of 184.5 million tonnes, 
up slightly (0.3 %) from 2019/2020, while trade in coarse grains is expected to in crease by 4.7 % to 
reach 219.8 million tonnes. Global trade in rice is foreseen to expand by 6.1 % year-on-year, 
amounting to 47.2 million tonnes in 2021. Regarding livestock products, global trade in meat is 
forecast to increase by 3.9 %, from 36.2 million t onnes in 2019 to 37.6  in 2020. Trade in milk is 
expected to remain stable, at around 9 million tonnes globally.  
3  INTERNATIONAL PRICES3 
3.1.  The FAO Food Price Index (FFPI) in October 2020 recorded a fifth consecutive monthly increase, 
up 3.1% from September, and 6% on a year -to-year basis. However, the FFPI as well as the FAO 
price indices for all major food commodities remained below peak levels reached in previous years 
(Table 2).  
Table 2. FAO Food Price Index and commodity group indices  
Food Pric es 
Indices  Peak values 
(points)  Oct-20 Change  
m/m (%)  Change  
y/y (%)  Change  
Oct 2020 over 
peak values (%)  
FFPI Feb-11 138 101 +3.1  +6 -27 
Cereals  Jun-08 160 112 +7.2  +16.5  -30 
Oils Feb-11 175 106 +1.8  +26.5  -39 
Sugar  Jan-11 183 85 +7.6  +9.3  -54 
Meat  Aug-14 119 91 -0.5 -10.7 -24 
Dairy  Feb-14 156 104 +2.2  +3.5  -33 
Source: FAO  
3.2.  Overall, and considering that internationally traded commodities are priced in US dollars, there 
is, typically, an inverse relationship between commodity prices and the value of the US dollar. 
By May 2020, the US dollar rally against nearly all other major currencies came to halt and the slide 
since then has been supportive to trade and prices  
3.3.  Concerning cereals, the price index increased 7.2 % from September, namely 16.5 % above its 
value in the corresponding month in 2019. In particular, the October rise marked the fourth month 
of consecutive increase. In conjunction, wheat export prices rose further in October, reflecting strong 
global demand amidst shrinking export availabilities. International maize prices also rallied to over 
six-year highs, largely underpinned by a fast pace in purchases by China and higher than earlier 
 
1 FAO. (2020). Food Outlook - Biannual Report on Global Food Markets – November 2020. Rome.  
2 Major wheat exporters are Argentina, Australia, Canada, the E uropean Union, Kazakhstan, Russian 
Federation, Ukraine and the United States; major coarse grain exporters are Argentina, Australia, Brazil, 
Canada, the European Union , Russian Federation, Ukrai ne and the United States; major rice exporters are 
India, Pakistan, Thailand, the  United States, and Viet Nam. Disappearance defined as domestic utilization plus 
exports for any given season.  
3 FAO. (2020). FAO Food Price Index. Accessed on  19 November 202 0 at: 
http://www.fao.org/worldfoodsituation/foodpricesindex/en/  G/AG/GEN/174  
 
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  anticipated reduction of stocks in the USA, as well as sharp declines i n export supplies in Brazil and 
Ukraine. By contrast, international rice prices fell to seven -month lows, as main -crop harvests got 
underway in Asia.  
3.4.  With regard to meat, the price index4 contracted by 0.5 % from September, marking the ninth 
monthly declin e since January, and standing 10.7 % lower than its value in 2019. For  bovine meat, 
prices declined due to weak demand in the USA, also stemming from the effects of COVID -19 on the 
economy and coupled with lower supplies from Australia (rising demand for ca ttle for herd 
rebuilding). Poultry meat prices fell due to reduced orders from China and Saudi Arabia. By contrast, 
prices of ovine meat rose on steady internal demand and low export supplies, especially in Australia. 
For pig meat prices, the drop reflecte d a fall in the quotations of German products outweighing an 
increase in those of Brazil.  
3.5.  The Dairy price index in October increased by 2.2 % from September, marking the fifth 
consecutive monthly increase and lifting the index 3.5 % above its value in the co rresponding month 
last year. Cheese prices raised the most, followed by skim milk powder, whole milk powder, and 
butter. Price increases in October reflected some degree of market tightening, with robust import 
demand from Asian and Middle Eastern countrie s and expectations of lower export availabilities from 
Oceania (seasonal declines). In addition, increases in internal demand for future deliveries in Europe, 
where production is nearing its seasonal low, also contributed to spot market tightening and risi ng 
prices.  
4  AGRICULTURAL AND TRADE POLICY RESPONSES TO COVID -19 IN NFIDCS  
4.1.  Compared to the 2007 -08 global food price crisis, major exporting countries have been less 
inclined to resort to export restrictions, and, when imposed, they were short -lived. Overall , 
comfortable production prospects and high stocks -to-use ratios (for cereals) at the beginning of the 
year had played a role in reducing the risks of food shortages and, consequently, the incidence and 
duration of trade -restricting measures. In fact, on t he contrary, some major exporters have lowered 
export duties to boost exports in a bid to support traders whose revenues were already severely hit 
by the disruptions caused by the COVID -19 containment measures.  
4.2.  By contrast, countries that are net importer s of cereals – many of them NFIDCs – implemented 
measures to ensure sufficient domestic supplies. For instance, countries including Rwanda (maize), 
Mali (rice), Sudan (maize), and Angola (wheat and rice) implemented export restrictions to secure 
food domes tically. Likewise, others eliminated or lowered import tariffs. This is the case of Chad, 
which decided to suspend import tariffs on wheat, maize and rice. Similarly, to contain food price 
increases and avoid sudden raises, some NFIDCs implemented a number  of price controls measures. 
Examples include Rwanda (maize and rice), Senegal, Madagascar, Mali, and Gambia (rice). Finally, 
some countries adopted domestic policies to support producers. For instance, Bangladesh enhanced 
measures to boost wheat reserves,  while announcing producer subsidies for rice.  
5  FAO'S RECOMMENDATIONS AND RESPONSE  
5.1.  Although the overall prospects for global markets are positive, significant challenges pertaining 
to food security are expected in many developing countries, particularly NF IDCs.  
5.2.  The measures adopted by governments around the world to limit the spread of COVID -19 and 
mitigate its impacts have affected agricultural investments, labour supply and production, thus 
hampering employment and households ' incomes. In this context, s ocial protection programmes and 
safety nets represent a fundamental means to secure incomes and consumption; however, not all 
countries have access to them. For instance, economies characterized by large informal sectors are 
less likely to have the economi c capacity to stir an effective response to a sudden unemployment 
growth. Problems also exist for economies that depend on tourism, namely Small Island developing 
States (SIDS), or on the export of raw commodities such as minerals and ores. Additionally, 
countries receiving large amounts of remittances that provide critical livelihood support to millions 
 
4 Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index 
are not avail able when the FAO Food Price Index is computed and published; therefore, the value of the Meat 
Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at 
times, require significant revisions in the final  value of the FAO Meat Price Index which could in turn influence 
the value of the FAO Food Price Index.  G/AG/GEN/174  
 
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  of families may also be severely impacted, as economies globally enter in a period of downturn, 
which affects employment and limits the capacity to send re mittances back home.  
5.3.  These conditions will likely exacerbate existing vulnerabilities, affecting income and therefore 
demand in developing countries, especially NFIDCs, possibly resulting in increased levels of food 
insecurity in these countries. As such,  it becomes important for WTO Members and development 
organizations to continue supporting vulnerable countries and population groups through actions 
aimed at ensuring food access and adequate nutrition. In this regard, it should be recalled that trade 
policy responses can support production and incomes, contribute to market stability and contain 
price rises, and help consumers. For instance, domestic food aid and cash transfers can help to 
maintain consumption levels during times of unemployment and reduce d income. Similarly, targeted 
domestic support measures can play a key role in ensuring that smallholders - and producers in 
general - maintain adequate production levels and protect their income. This, in turn, can play a role 
in ensuring food availabilit y, which benefits consumers.5  
5.4.  Support to NFIDCs should also be provided in the field of digitalization, as it plays an important 
role in addressing some of the barriers that influence food prices in domestic markets. Countries 
globally are working to digitalize trade procedures (e.g. implementation of the e -Phyto solution, for 
the provision of electronic SPS certificates), and some regions established corridors that allowed for 
increased automation and more efficient data sharing among customs and rela ted authorities, at 
selected border crossings and for a selected list of essential products. This, while significant for 
exporting countries, is also essential for importing countries, allowing them to improve food 
availability, address domestic supply dis ruptions and contain sudden price surges and volatility.  
5.5.  In response to the pandemic, FAO has launched a coordinated and holistic global response to 
ensure adequate and nutritious food for all, both during and after the crisis. FAO 's COVID -19 
Response and Recovery Programme has been designed to proactively and sustainably address the 
socio-economic impacts of the pandemic. In line with the UN vision to "build back better", and in 
pursuit of the Sustainable Development Goals (SDGs), it aims to mitigate the i mmediate impacts of 
the pandemic while strengthening the long -term resilience of food systems and livelihoods. 
The Programme covers seven priority areas of action, including an area on "Trade and food safety 
standards", which aims to support countries to f acilitate and accelerate food and agricultural trade 
during COVID -19 and beyond.  
 
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5 FAO. (2020). Agri -food markets and trade in the time of COVID -19. Rome.