21/02/2011 (Nigerian Compass) - As tariff on food imports rise, African countries are spending about $50billion on food imports every year. From the amount, Nigerian spends $5billion while Ghana spends S1billion.

The imported items include wheat, palm oil, rice, poultry, beef, sugar and others. Commodities prices surged in 2010 and are projected to go higher in 2011.

There is fear that some African countries, especially Ghana could face a higher food import bill.

It was learnt that very night, the number of hungry people in sub-Saharan Africa runs about 230 million people.

Most sub-Saharan countries depend on food imports and foreign aid to feed its people. Imports put pressure on the currency exchange rate, creating currency instability and depreciation.

Clearly, Ghana’s reliance on food imports to meet its food security needs mean its cannot sustain a stable currency, and maintain a reasonable level of foreign reserves.

Reports on production figures from the United States Department of Agriculture (USDA) support higher grain prices in 2011. Russia, the third largest producer of wheat was said to be facing a major drought. Pakistan the third largest exporter of rice after Vietnam and Thailand could face production cutbacks due to floods, in 2010, in key planting regions. Australia, a major exporter of sugar, faces a production cut of about 20 per cent.

Demand for wheat is strong, and supplies are tight. Egypt had a 600,000 metric tons order cancelled by Russia. For USA farmers, the cancellation of orders by other exporters means a boost in food exports and more profits. United States could be the only country with free stocks of wheat for export. This food import bill limits foreign reserves and wrecks the current account balance of poor sub-Saharan countries.

In the mid of December 2010, wheat traded at $7.50 per bushel or $277 per metric ton. This is an increase of 50per cent compared to the price in January 2010. The price of rice has jumped about 40per cent over the price from this past spring 2010. Also, the price of corn has jumped almost 100per cent when compared to the lows of 2009. And sugar is trading at a 30-year high.

It was revealed that Sub-Saharan governments have increased tariffs as a way to deter food imports.

Imposing higher tariffs on food imports will limit the amount of food imported and consumers will eventually pay a higher price than before tariffs were raised.

Some research organizations in Japan have forecasted below average rice and wheat harvests in India and Southeast Asia.