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FAO Food Price Index averages 172.6 pts in Oct, up 9.1% from last year
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Saturday, 12 November, 2016, 08 : 00 AM [IST]
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Rome
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fiogf49gjkf0d The Food and Agriculture Organisation (FAO) Food Price Index averaged 172.6 points in October, up 0.7 per cent for the month and 9.1 per cent from a year earlier. The staple grains’ index rose for the first time in three months.
October’s rise was driven primarily by jumps in sugar and dairy prices. The FAO sugar price index rose 3.4 per cent in October amid reports of production shortfalls in Brazil's Centre South region and Maharashtra.
The FAO dairy price index rose 3.9 per cent from September, led by rising prices of cheese and in particular butter, as a result of sustained internal demand in the European Union (EU) after a period during which stocks were drawn down.
By contrast, the FAO oils/fats price index declined 2.4 per cent from September, largely linked to weaker palm oil quotations as a consequence of sluggish global import demand.
The FAO meat price index also fell, dropping one per cent in October, with the drop largely driven by slacker demand for European pig meat from importers in China.
The FAO cereal price index, meanwhile, rose one per cent in October, buoyed by tightening supplies of high-quality wheat even as the overall prospects for global wheat harvests have improved.
Updated forecasts for production and stocks
World cereal production for 2016 should amount to 2,571 million tonnes, up marginally from FAO's October forecast and 1.5 per cent above the 2015 output.
The updated figure, released in the Cereal Supply and Demand Brief, reflected a substantial upgrade of the outlook for world wheat production, which is now expected to rise to 746.7 million tonnes, a 4.3 million increase from FAO's October forecast.
The Russian Federation's wheat output is now anticipated to set a new record, while favourable weather is also boosting yield prospects in Kazakhstan.
The increase in world wheat and barley production more than offsets the expected 4.8 million tonne decline in the 2016 global maize crop due to weather-induced yield downgrades for Brazil, China, the European Union and the United States of America. The forecast for global rice production was largely unchanged.
Early signs from the planting of the 2017 winter wheat crop in the northern hemisphere indicated that farmers in the United States were reducing the area because of low price prospects and a subdued export outlook due to a stronger dollar. However, wheat plantings in the Russian Federation and Ukraine are ahead of last year's pace.
Meanwhile, sowing of summer 2017 cereal crops is underway in the southern hemisphere, and conducive weather conditions are leading to expansion in South America.
The maize area planted in Argentina is expected to expand by six per cent from last year's high level.
Total cereal utilisation for the 2016/17 season is now forecast at 2,562 million tonnes, up slightly from October and 1.7 per cent higher than a year earlier.
A primary driver of the increased utilisation of cereals is global feed use, which is likely to expand by 2.7 per cent.
The use of wheat for animal feed, buoyed by ample supplies of lower-quality wheat, is anticipated to grow by 6.1 per cent to 146.6 million tonnes, an all-time high.
Global food consumption of cereals is forecast at 1,106 million tonnes, up 1.3 per cent from a year earlier and sufficient to maintain a broadly stable per capita consumption level globally.
World cereal stocks will likely increase to nearly 662 million tonnes by the end of the 2017 seasons, driven by growing wheat inventories, especially in China, the United States and Russia.
Coarse grains stocks are projected to drop by 1.7 per cent, led by reductions in China, Brazil and South Africa. World rice inventories are expected to fall slightly to 169.8 million tonnes.
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