Rome – The benchmark for world food commodity prices surged to its highest level in 18 months in October, led by a sharp increase in vegetable oil quotations, the Food and Agriculture Organization of the United Nations (FAO) reported Friday.
The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, averaged 127.4 points in October, up 2.0 percent from September and 5.5 percent from its value a year ago. Nevertheless, the index remained 20.5 percent below its March 2022 peak.
The FAO Vegetable Oil Price Index spiked by 7.3 percent in October, hitting a two-year high as a result of rising quotations for palm, soy, sunflower and rapeseed oil, driven mainly by concerns about production.
The FAO Cereal Price Index increased by 0.9 percent in October, led by rising wheat and maize export prices. Global wheat prices were affected by unfavorable weather conditions in major northern hemisphere exporters as well as the re-introduction of an unofficial price floor in the Russian Federation and rising tensions in the Black Sea region. World maize prices rose as well, driven in part by strong domestic demand and transport challenges in Brazil due to low river levels. By contrast, the FAO All Rice Price Index declined by 5.6 percent in October, reflecting lower indica rice quotations driven by expectations of heightened competition among exporters following India’s removal of export restrictions on non-broken rice.
The FAO Sugar Price Index increased by 2.6 percent amid persisting concerns over the 2024/25 production outlook in Brazil following extended dry weather conditions. Rising international crude oil prices also contributed to the increase in sugar quotations by shifting more sugarcane toward ethanol production, while the weakening of the Brazilian real against the United States dollar limited the increase.
The FAO Dairy Price Index rose by 1.9 percent in October, averaging 21.4 percent above its level the same time last year. The increase was primarily driven by higher international cheese and butter prices, while quotations for milk powders declined.
Bucking the general upward trend, the FAO Meat Price Index dropped by 0.3 percent from September, mainly due to lower pig meat prices resulting from increased slaughter rates in Western Europe amid weak domestic and international demand. World poultry prices fell slightly in October, while those of ovine meat remained stable. By contrast, bovine meat prices increased moderately, underpinned by stronger international purchases.
More details are available here.
Updated 2024/25 forecasts point to more rice and wheat, declining maize output
According to FAO’s new Cereal Supply and Demand Brief, also released Friday, global cereal production in 2024 is forecast to decline by around 0.4 percent from the previous year to 2 848 million tonnes, the second-largest output on record.
World wheat production is expected to increase, buoyed by production upturns in Asia as a result of area expansions and conducive weather conditions, which more than offset large declines among key producers in Europe. Global coarse grain production is forecast to decline from its 2023 record level, mostly due to a sizeable crop in maize output because of adverse weather conditions. Meanwhile, world rice output in the 2024/25 season could reach a record high of 538.9 million tonnes, boosted by record-breaking plantings.
World cereal utilization is forecast to grow by 0.5 percent to 2 857 million tonnes in 2024/25, led by increasing food consumption of rice and wheat. Global cereal stocks are predicted to expand by 0.6 percent to 889 million tonnes, largely due to an expected expansion in rice inventories. This would result in a global cereal stocks-to-use ratio of 30.6 percent, near the five and ten-year average levels.
International trade in cereals is now forecast at 485 million tonnes, representing a 3.9 percent contraction from the 2023/24 level. Global trade of rice is forecast to increase, while that of wheat and coarse grains to decline.
More details are available here. A more detailed analysis of global cereal markets will be provided in FAO’s next Food Outlook report, to be released on 14 November.
The Agricultural Market Information System (AMIS), hosted at FAO, also released its monthly Market Monitor on Friday, featuring, in addition to the regular analysis, a discussion on the evolution of export restrictions on staple crops since 2007.
45 countries need external assistance for food, five face acute emergencies
Some 45 countries around the world are assessed to need external assistance for food, according to the latest Crop Prospects and Food Situation report, a triannual publication by FAO’s Global Information and Early Warning System (GIEWS) also published today.
The report offers details on conditions in these countries, which include 33 countries in Africa, nine in Asia, two in Latin America and the Caribbean and one in Europe, along with regional data on the highly variegated expected 2024 cereal outputs around the world.
Conflicts and insecurity are identified as the primary drivers of severe food insecurity, with populations in the Gaza Strip, Haiti, Mali and the Sudan facing IPC 5 levels of acute food insecurity in 2024.
The aggregate cereal output in the 44 Low-Income Food Deficit Countries (LIFDCs) is forecast to be marginally above the five-year average, with overall production in African LIFDCs anticipated to remain near-average, as lower harvests in southern African are anticipated to be offset by increases in other regions. Import needs for this group are also forecast to grow by about 8 percent from the five-year average, with the increase to be concentrated in eastern and southern Africa.
Source : Fao
