January sees another decline in world food price index, according to FAO
Published on: February 10, 2024.
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The FAO Reports a Slight Decrease in World Food Commodity Prices
The Food and Agriculture Organization of the United Nations (FAO) has reported a slight decrease in the benchmark for world food commodity prices in January. The decrease was primarily driven by lower prices of cereals and meat, which offset an increase in sugar prices.
The FAO Food Price Index, which tracks monthly changes in the international prices of globally-traded food commodities, averaged 118 points in January. This is a 1 percent decrease from December and a 10.4 percent decrease from the previous year.
Decrease in Cereal and Meat Prices
The FAO Cereal Price Index declined by 2.2 percent from the previous month. This decline was attributed to strong competition among exporters and the arrival of recently harvested supplies in southern hemisphere countries. Maize prices also fell sharply due to improved crop conditions and the start of the harvest in Argentina, as well as larger supplies in the United States.
On the other hand, rice prices increased by 1.2 percent in January. This rise can be attributed to strong export demand for Thai and Pakistani higher quality Indica rice, as well as additional purchases by Indonesia.
The FAO Meat Price Index continued its decline for the seventh consecutive month, decreasing by 1.4 percent from December. Abundant supplies from leading exporting countries drove down international prices of poultry, bovine, and pig meats. However, international ovine meat prices increased due to high global import demand and lower supplies of animals for slaughter in Oceania.
Slight Increase in Sugar Prices
The FAO Sugar Price Index increased by 0.8 percent from the previous month. This increase was driven by concerns over below-average rains in Brazil, which could impact sugarcane crops to be harvested from April. Unfavorable production prospects in Thailand and India also contributed to the increase in sugar prices.
Record Cereal Output in 2023
According to new forecasts from the FAO’s Cereal Supply and Demand Brief, world cereal production in 2023 is expected to reach an all-time record high of 2,836 million tonnes. This represents a 1.2 percent increase from 2022.
The global coarse grain output is now projected to reach an all-time high of 1,523 million tonnes, following a 12-million-tonne upward adjustment. This increase is mainly due to higher maize production estimates in Canada, China, Türkiye, and the United States.
World cereal utilization in 2023/24 is forecasted to be 2,822 million tonnes, surpassing the previous year’s level by 1.2 percent. This is driven by greater-than-earlier anticipated feed use, especially in the European Union, Australia, and the United States.
The global cereal stocks-to-use ratio for 2023/24 is forecasted to be 31.1 percent, exceeding the previous year’s level of 30.9 percent.
Global trade in cereals in 2023/24 is expected to reach 480 million tonnes, an increase of 0.8 percent from the preceding year. This increase is primarily due to larger traded volumes of coarse grains, while trade in wheat and rice may actually decrease.
Source: Business Insider Bangladesh
