Oil glut, low ship transportation cost and oversupply of everything from grains to sugar pulled the world's food bill to $9 billion. Last year's estimate was $261 billion to $1.09 trillion.
Countries around the world might have spent around $1.076 trillion for importing foods last year which is a five-year low as estimated by the UN's Food & Agriculture Organization (FAO). That is 0.8 percent less than what they had forecasted in October marking the first drop since 2009, according to Bloomberg.
The FAO data showed that the booming harvest in global supplies was able make it 20 percent lesser than the $1.345 trillion record in 2014. The Baltic Dry Index slid to a record low last month when the shipping cost was cut. This is due to oil price rollback for a third year in 2015 as some nations from the Middle East decided against controlling the supplies, adding to an excess from the country's boost in production of shale gas deposits.
"Cereal and livestock bills, both in terms of a decline in prices and a fall in trade volumes, are again culpable for the lower cost of food imports," said Adam Prakash, an FAO economist. "Freight costs also plummeted making unit costs of importing cheaper."
2015 has ended with the lowest level of agricultural commodities since 2006. The costs of fertilizers were also cut due to energy price roll back, as reported by Live Mint.
In six years, "lower food costs are benefiting large importers in the Middle East and Africa region," said Cole Martin, BMI Research's senior commodities analyst. "A unit of Fitch Ratings Ltd. Nations from Egypt, the largest wheat buyer, to Ethiopia are gaining as they run large food deficits or have had poor harvests due to the El Nino weather pattern," he added.
"Low international food prices are beneficial so long as their currencies do not fall sufficiently to wipe out the gains of low prices," Prakash said. A strong dollar "can prove onerous to many of the most vulnerable countries, which are net importers of necessities, notably of foodstuffs."
