News in brief:
– FAO Food Price Index for January shows a 1% decline, led by lower prices in cereals and meat, offsetting an increase in sugar prices.
– Cereal prices dropped due to strong competition and increased supplies, while vegetable oil and dairy prices remained stable while meat prices declined, and sugar prices increased.
The Food and Agriculture Organization of the United Nations (FAO) published a recent report that shows a marginal decline in its Food Price Index for January.
This dip, led by lower cereal and meat prices, comes as a relief, marking the seventh consecutive month of decrease.
Here’s a breakdown of the key factors influencing the index:
- Cereals: The FAO Cereal Price Index fell by 2.2% driven by competitive global wheat export prices and an abundant maize harvest in Argentina and the United States.
- Vegetable Oils: The Vegetable Oil Price Index rose slightly by 0.1%, with palm and sunflower seed oil prices increasing, but it was offset by decline in soy and rapeseed oils, driven by ample supplies in Europe and South America.
- Dairy: The Dairy Price Index remained stable, with increased demand for butter and whole milk powder from Asian buyers balancing declines in skim milk powder and cheese prices.
- Meat: The Meat Price Index declined by 1.4%, influenced by abundant supplies from leading exporting countries, leading to lower prices for poultry, bovine, and pig meats. However, ovine meat prices increased due to high global import demand.
- Sugar: The Sugar Price Index saw a modest increase of 0.8%, driven by concerns over below-average rains affecting sugarcane crops in Brazil and unfavorable production prospects in Thailand and India.
Record cereal output in 2023
The FAO forecasts a record-high world cereal production of 2,836 million tonnes in 2023, a 1.2% increase from 2022. It says that he global coarse grain output is also at an all-time high of 1,523 million tonnes, primarily due to higher maize production estimates in Canada, China, Türkiye, and the United States.
World cereal utilisation in 2023/24 is anticipated to be 2,822 million tonnes, up by 1.2% from the previous year, driven by increased feed use in the European Union, Australia, and the United States. The global cereal stocks-to-use ratio is also forecast at a comfortable 31.1%, exceeding the previous year.
Global trade in cereals in 2023/24 is expected to reach 480 million tonnes, a modest increase of 0.8% from the previous year. This growth is led by larger traded volumes of coarse grains, while wheat and rice trade could see a contraction.
