Prices of food up by ‘multi-month highs’- FAO

The benchmark price index for food commodities rose in September, led by vegetable oils and cereals, the Food and Agriculture Organisation of the United Nations has said.

This is according to the Food Price Index report published on Thursday which tracks international prices of the most commonly traded food commodities.

The FAO Food Price Index averaged 97.9 points during the month, up 2.1 per cent from August and 5.0 per cent higher than its value in September 2019.

In the report, the FAO Cereal Price Index rose 5.1 per cent from August and is now 13.6 per cent higher than a year ago.

“Higher wheat price quotations led the increase, spurred by brisk trade activity amid concerns over production prospects in the southern hemisphere as well as dry conditions affecting winter wheat sowings around Europe.

“Maize prices also rose, responding to lower production prospects in the European Union and a downward revision of carryover supplies in the United States of America.

“International sorghum and barley prices rose as well, while those of rice subsided.”

Specifics

The FAO Vegetable Price Index rose 6.0 per cent in September, hitting an eight-month high as quotations for palm, sunflower seed and soy oils all rose in step with firm global demand.

In the report, the FAO Meat Price Index declined 0.9 per cent from August, partly influenced by China’s decision to ban imports of pig meat from Germany after African Swine Fever (ASF) was detected among wild boars.

The report said, the FAO Dairy Price Index was almost unchanged during the month, as moderate increases in the prices of butter, cheese and skim milk powder were offset by a fall in whole milk powder quotations.

The FAO Sugar Price Index declined 2.6 per cent, mainly in reaction to exceptions of a global sugar production surplus in the coming season, driven by a significant production recovery in India and strong output anticipated in Brazil.

Forecast

Meanwhile, the world cereal utilisation in 2020/21 is forecast at 2744 million tonnes, 2.0 per cent higher than the previous year.

“World rice utilisation is expected to hit a new record of 510.5 million tonnes.

“Global trade in cereals is also expected to reach an all-time high of 448 million tonnes in 2020/21 up 2.4 per cent from the previous year and higher than FAO’s earlier forecast in September,” it said.

It said world cereal stocks are now forecast at 890 million tonnes at the close of seasons in 2021, a record high buoyed by growing wheat inventories in China.

“If the new projections are confirmed, the world cereal stocks to use ratio in 2020/21 will be 31.6 per cent, only slightly down from the 2019/20 ratio but still relatively high from a historical perspective.

“The FAO forecasts for world cereal production, slightly trimmed from last month’s projections, and now pegged at 2762 million tonnes for 2020, still an all-time high and some 2.1 per cent higher than the previous year’s output,” it added.