G/AG/GEN/122  
 
3 November 2014  
(14-6377)  Page: 1/8  
Committee on Agriculture  Original: English  
 
 FAO REPORT TO THE WTO COMMITTEE ON AGRICULTURE 2014 
SUBMISSION BY FAO 
The following submission, dated 31 October 2014, is being circulated at the request of the Food 
and Agriculture Organization (FAO). 
 
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 This report presents the contribution of FAO to the annual monitoring exercise of the WTO 
Committee on Agriculture (CoA). The report draws in  large part on the October 2014 issues of the 
FAO Food Outlook  and the Agricultural Market Information System (AMIS) Market Monitor.  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 third year of operation of AMIS. 
 
1  FOOD IMPORT BILLS  
1.1.  At USD 1.3 trillion, the 2014 forecast for the global food import bill remains close to the 
previous year and 4% lower than the record level in 2012 (Table 1). Lower freight costs compared 
to 2013 levels also contributed to the moderation in import bills. However, for individual 
commodities the import bills displayed significant variations.  
1.2.  Products in the animal protein category, such as meat, dairy, and fish experienced the largest 
increases. The combined import bill for these categories could reach a record USD 453 billion, 10% 
higher than in 2013 and almost double that observed during the past decade. The anticipated increase is due to much larger volumes of imports and higher world quotations, especially for dairy 
products. Rising prices of coffee are expected to le ad to an increase of 20% in total expenditures 
on tropical beverages (coffee, tea and cocoa). Expenditures on imports of sugar and vegetable oils are expected to remain the same. On the other hand, reduced import volumes and lower quotations are expected to lower the cereal im port bill by USD 23 billion (12%) from the 2013 
level.   
1.3.  The import bills for LDCs and Low-Income Food-Deficit Countries (LIFDCs) are forecast to 
remain stable in 2014. The prospects for abundant domestic harvests of staple crops and therefore 
less dependence on world markets are expected to reduce the import bills in 2014. In addition, it 
is expected that higher international prices of key export primary commodities, such as coffee and 
cocoa, would contribute to the improvement of  terms of trade for many commodity dependent 
countries.  
1.4.  The cereal import bills for these two grou ps of countries, which are the target of the WTO 
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 8.7 billion and USD 15.2 billion respectively in the 2014/15 
marketing year based on data updated in October (see Annex Table). These import bills are significantly lower (22%) than in the 2013/14 marketing year period. Lower international prices of 
cereals and less imports due to favourable weather conditions in importing countries are the 
source of this reduction. G/AG/GEN/122 
 
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  1.5.  Food aid represents a small proportion of total cereal imports and is forecast at 4.3% and 
0.4% for LDCs and NFIDCs respectively in 2014/15, similar to the previous year and continuing a downward trend from the higher rates of the early 2000s. The per unit import costs are also forecast to be lower at around USD 296 per tonne in 2014/15, falling from USD 342 per tonne. 
Table 1: Forecast of food import bills, USD billion 
 World Developed Developing LDC LIFDC Sub-Saharan 
Africa 
 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014  
TOTAL 
FOOD 1,287 1,302 766 782 520 520 37 37 131 127 45 44  
Vegetable 
and Fruits 220 215 161 157 60 58 3 3 14 14 3 3  
Cereals 189 166 77 67 112 98 13 11 38 34 15 13  
Meat 170 180 115 120 55 60 3 4 7 7 4 4  
Fish 135 142 98 103 37 39 1 1 7 7 5 5  
Dairy 109 131 67 80 42 52 3 3 9 11 3 4  
Veg. Oils 
& Animal 
Fats 101 99 43 42 59 57 6 6 22 22 4 4  
Oilseeds 80 86 27 29 53 57 - - 4 4 1 1  
Sugar 50 50 25 27 24 24 4 4 11 10 3 3  
Tropical 
Beverages 89 107 69 83 20 24 1 1 5 6 1 2  
Source: AMIS, October 2014.  
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 has been operational since September 2011. Hosted by FAO, the AMIS 
Secretariat has ten member organizations: FAO, IFPRI, IFAD, OECD, UNCTAD, the UN High Level 
Task Force, the World Bank, WFP, WTO and the International Grains Council (IGC).  
2.2.  During its third year, the AMIS Secretariat intensified its efforts in the preparation of short-
term market forecasts for wheat, rice, maize and soybeans. To further improve the quality, 
timeliness and completeness of data submissions,  the AMIS Secretariat initiated the "Exchange 
Programme for National Focal Points of the Global Food Market Information Group", which welcomed the first country representatives in October 2014. 
2.3.  As regards information dissemination, the "AMIS Market Monitor" has been improved further 
by regularly featuring a review of growing conditions of the four AMIS crops and analysing the profitability of ethanol production from maize. In addition, a historical database of policy 
information is now accessible to country focal points through an interactive web application. 
2.4.  Important progress has also been made in the area of research and analysis. For instance, 
country case studies investigated methodologies fo r improved feed estimation and analysed price 
transmission from global benchmarks to producer prices; follow-up research on food-energy 
linkages explored possible biofuel indicators; and a global scoping report compiled current 
knowledge on stocks estimation.  
2.5.  Finally, in the area of capacity develo pment, several IT solutions are currently in 
development to support countries in the management of their price, stocks, and forecast data 
while literature reviews have investigated available methodologies in these three statistical domains. At country level, priority activities and project objectives have been defined with national 
stakeholders and converted into concrete wo rk plans that are ready for implementation. G/AG/GEN/122 
 
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  3  MARKET TRENDS FOR KEY CEREALS 
3.1.  According to the latest AMIS Market Monitor and Food Outlook (October, 2014), world cereal 
production in 2014 is anticipated to reach 2.5 billion tonnes, around 65 million tonnes higher than FAO's initial forecasts. Under current expectations, world cereal production would decline slightly 
from the 2013 peak, with wheat production achi eving a new record, at 718.5 million tonnes, and 
coarse grains matching last year’s high of 1. 3 billion tonnes. However, unfavourable weather 
conditions have lowered prospects for rice production, which is now forecast at 496.4 million 
tonnes, down 0.4% from 2013. Based on the latest forecasts for production and utilization, world 
cereal stocks at the close of crop seasons in 2015 will reach 627.5 million tonnes, 8.3% higher than the start of the season and the highest leve l in 15 years. Maize will account for the biggest 
increase, followed by wheat, while rice stocks are forecast to decline, although from a record level. 
This year’s abundant supplies have resulted in sharp declines in international prices of all cereals, 
with the exception of rice. However, the lower prices are not expected to stimulate trade, as the major cereal importing countries are holding large supplies, which may depress import demand 
and result in total cereal trade contracting by 5.0% to 337 million tonnes in 2014/15.  
3.2.  Wheat : FAO's latest forecast for wheat production in 2014 (718.5 million tonnes) is slightly 
higher than the previous year. Compared with 2013, large production gains are now foreseen for 
the Russian Federation, China and India, which will more than compensate for lower production in 
Australia, Canada and the United States. World wheat trade in 2014/15 (July/June) is set to contract to 150 million tonnes, 7.3 million tonnes (4.6%) below the record level of 2013/14. The reduction will be mainly attributed to lower import demand in Asia and Africa, more than offsetting 
a rise in Europe. World wheat inventories are fore cast to reach 192.4 million tonnes by the end of 
seasons in 2015, their highest level since 2003. International wheat prices have come under strong downward pressure in recent months, falling in September to their lowest levels in four 
years. 
3.3.  Coarse Grains : FAO's latest forecast for world production of coarse grains stands at 
1.38 billion tonnes, almost the same as the previous year. Maize production is forecast to reach 
around 1 billion tonnes, 0.7% higher than the previous year. By contrast, world barley production 
is forecast at 140.2 million tonnes, 4% lower than the previous year. As a reflection of a good year for global production, especially in many importing countries, world trade in coarse grains in 2014/15 is projected to decline to 147 million tonnes, down 6.9% from the 2013/14 record level. 
Based on the latest forecasts for global production and utilization, world stocks of coarse grains in 
2015 are forecast to rise to 257.4 million tonnes by the close of the crop seasons, 16% above their opening levels and their highest level since 1986/87. Good crop prospects and rising inventories 
have continued to put downward pressure on international prices such that maize futures in 
September fell around 25% compared to  the corresponding period last year. 
3.4.  Rice: According to the latest figures, world rice production is forecast at 496.4 million 
tonnes, 0.4% lower than the previous year due to unfavourable weather conditions. Strong import 
demand stimulated by lower prices and large supplies from major exporting countries are expected to increase trade flows by 7% in 2014 to a record 39.7 million tonnes. Rice inventories ending in 2015 are forecast to be slightly lower for the first time in ten years. However, their volume is 
projected to be sufficient to cover more than a third of the 2015/16 projected rice consumption.  
4  FOOD PRICES 4.1.  The FAO Food Price Index averaged 191.5 points in September 2014, down 5.2 points (2.6%) 
from August and 12.2 points (6%) from the corresponding period last year (Figure 1). Among the 
sub-indices, sugar and dairy weakened the most, followed by cereals and oils, while meat remained firm. The US dollar’s appreciation continued to weigh on all international commodity 
prices. The real food price index in 2014 was also lower as compared to 2013 (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 total calorie intake. The index has declined 
considerably in 2014, with the pace of decline accelerating in recent months. Since May, the index dropped by almost 10% in value. Falling international prices of foodstuffs that carry a much higher G/AG/GEN/122 
 
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  weight in total consumption than in trade (for instance cereals, 65% versus 27%), is the main 
reason for the index’s weakening. The decline is slightly more than that of the FAO Food Price Index (FPI) as a result of upward trending quot ations for livestock products, which carry more 
weight in determining the FPI.  
5  PRICE VOLATILITY 
5.1.  Historical price volatility of major crops (wheat, maize and soybeans) indicates that the 
volatility of wheat was relatively high in recent months, maize was stable, while the volatility of 
soybeans showed an increasing trend at the en d of September 2014. Implied volatility, which 
shows the level of expected future volatility, obse rved in Chicago Board of Trade options on future 
markets, was high at the beginning of the ye ar then decreased at the end of September 
(Figure 5).  
5.2.  Price volatility can have serious implications especially for LDCs and NFIDCs. Importing 
countries that face sudden price spikes experience  deterioration in their balance of payments and 
public finance. The higher price volatility of so ybeans observed this year may influence the food 
security of the importing countries, especially in the regions of North and East Africa.  
5.3.  In addition, 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 when they 
switch to less nutritious foods and away from other basic needs. 
Figure 1. FAO Food Price Index Figure 2. Food Commodity Price Indices 
(2010-2014) (2013-2014) 
       
  
Source: AMIS, October 2014. G/AG/GEN/122 
 
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  Figure 3: FAO Food Price Index (1961–2014) 
 
Source: AMIS, October 2014. 
 
 
Figure 4: FAO Global Food Consumpt ion and Food Price Indices (2011–2014) 
 
Source: AMIS, October 2014. 
 
 G/AG/GEN/122 
 
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  Figure 5: Historical and Im plied Volatilities (2011–2014) 
 
 
 
 
Source: AMIS, October 2014. 
 
 
References 
AMIS (2014). AMIS Market Monitor, October 2014 . http://www.amis-outlook.org . 
FAO (2014). Food Outlook, October 2014 .   
  G/AG/GEN/122  
 
- 7 - ANNEX 
Cereal imports of LDCs and NFIDCs (200 2/2003 to 2014/2015) - Information as of October 2014  
 2002/  
2003 2003/ 
2004 2004/  
2005 2005/ 
2006 2006/  
2007 2007/ 
2008 2008/ 
2009 2009/ 
2010 2010/ 
2011 2011/  
2012 2012/  
2013 
 2013/ 
2014 
(Estimate)  2014/ 
2015 
(Forecast) 
Import Bill 
(USD million)              
LDCs 3,395 3,630 4,210 4,380 6,093 10,732 7,799 7,659 10,205 10,174 10,687 10,106 8,667 
NFIDCs 5,967 6,679 7,616 7,631 9,741 18,804 15,109 11,631 17,876 19,915 19,368 18,584 15,196 
LDCs & NFIDCs 9,362 10,309 11,826 12,011 15,834 29,536 22,908 19,290 28,081 30,089 30,055 28,690 23,863 
% change over 
2000/01-2002/03 15.7 27.4 46.2 48.5 95.7 265.1 183.2 138.4 247.1 271.9 271.5 254.6 195.0 
Total volume 
imported (000 
tonnes)              
LDCs 20,841 18,535 20,511 20629 21,259 22129 25,027 26,408 25,231 24,834 24,056 27,738 26,695 
NFIDCs 34,843 34,163 39,497 39150 38,258 44728 49,206 44,729 48,682 52,525 47,961 56,184 54,010 
LDCs & NFIDCs 55,685 52,698 60,008 59779 59,517 66857 74,233 71,137 73,912 77,360 72,017 83,922 80,705 
% change over 
2000/01-2002/03 3.4 -2.1 11.4 11.0 10.5 24.2 37.9 32.1 37.3 43.7 33.7 55.9 49.9 
Food aid (000 
tonnes)              
LDCs 3,902 3,638 3,187 2533 1,855 2316 3,660 3,231 2,594 2,788 1,487 1148 1,148 
% of total imports 18.7 19.6 15.5 12.3 8.7 10.5 14.6 12.2 10.3 11.2 6.2 4.1 4.3 
NFIDCs 727 550 496 364 301 327 485 505 385 491 250 198 198 
% of total imports 2.1 1.6 1.3 0.9 0.8 0.7 1.0 1.1 0.8 0.9 0.5 0.4 0.4 
LDCs & NFIDCs 4,629 4,188 3,683 2897 2,156 2643 4,145 3,736 2,979 3,279 1,737 1,346 1,346 
% of total imports 8.3 7.9 6.1 4.8 3.6 4.0 5.6 5.3 4.0 4.2 2.4 1.6 1.7  
  G/AG/GEN/122  
 
- 8 -  2002/  
2003 2003/ 
2004 2004/  
2005 2005/ 
2006 2006/  
2007 2007/ 
2008 2008/ 
2009 2009/ 
2010 2010/ 
2011 2011/  
2012 2012/  
2013 
 2013/ 
2014 
(Estimate)  2014/ 
2015 
(Forecast) 
Commercial imports 
(000 tonnes)              
LDCs 16,939 14,897 17,324 18,096 19,404 19,812 21,367 23,177 22,636 22,047 22,569 26,591 25,547 
NFIDCs 34,116 33,613 39,001 38,786 37,958 44,401 48,720 44,224 48,297 52,034 47,712 55,986 53,812 
LDCs & NFIDCs 51,055 48,510 56,325 56,882 57,361 64,213 70,088 67,401 70,934 74,081 70,280 82,576 79,359 
% change over 
2000/01-2002/03 3.7 -1.4 14.4 15.6 16.5 30.5 42.4 36.9 44.1 50.5 42.8 67.8 61.2 
Per unit import cost 
(USD/tonne)               
LDCs 162.9 195.9 205.2 212.3 286.6 485.0 311.6 290.0 404.5 409.7 444.2 364.3 324.7 
NFIDCs 171.3 195.5 192.8 194.9 254.6 420.4 307.1 260.0 367.2 379.2 403.8 330.8 281.4 
LDCs & NFIDCs 168.1 195.6 197.1 200.9 266.0 441.8 308.6 271.2 379.9 388.9 417.3 341.9 295.7 
% change over 
2000/01-2002/03 12.2 30.5 31.5 34.0 77.5 194.7 105.9 80.9 153.5 159.5 178.4 128.1 97.3 
Wheat export price 
(USD/tonne)              
US no.2 hard winter 161 161 154 175 212 361 270 209 316 300 347 318 286 
% change over 
2000/01-2002/03 15.9 16.0 11.0 26.6 52.7 160.6 95.1 51.1 128.1 116.4 150.5 129.2 106.3 
Wheat ocean 
freight rates 
(USD/tonne)              
From U.S.  
Gulf ports to:              
Egypt 16.7 37.0 46.5 31.9 50.3 86.2 42.9 43.2 40.1 43.3 34.4 36.8 33.0 
Bangladesh 22.5 48.5 65.4 45.5 57.8 98.8 55.3 62.7 57.3 56.4 50.3 52.8 46.0 
Rotterdam 12.5 28.3 34.5 20.8 32.3 71.8 38.6 35.0 28.2 24.8 19.8 21.3 14.0 
Average 17.2 37.9 48.8 32.7 46.8 85.6 45.6 46.9 41.9 41.5 34.8 36.9 31.0 
% change over 
2000/01-2002/03 8.7 139.4 208.2 106.7 195.4 440.6 187.9 196.5 164.4 161.9 119.8 133.3 95.8 
Source: FAO, 2014. 
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