International food commodity prices rose for the 11th consecutive month in April, with sugar leading the increase and cereals resuming their upward trend, according to the Food and Agriculture Organization of the United Nations (FAO).
The FAO Food Price Index averaged 120.9 points in April, 1.7 percent higher than March. It is also 30.8 percent higher than its level in the same month last year. The index tracks monthly changes in the international prices of commonly traded food commodities. It reached its highest level in May 2014. In nominal terms, it is 12 percent below its all-time peak in February 2011.
Also, the FAO Sugar Price Index increased 3.9 percent in April 2021 to reach levels nearly 60 percent higher than in April 2020. There are concerns that slow harvest progress in Brazil and frost damage in France could lead to tighter global supplies.
Likewise, the FAO Vegetable Oil Price Index rose 1.8 percent in April as international palm oil quotations rose. There are concerns that production growth in major exporting countries would be slower than expected. Soy and rapeseed oil values also climbed further, while sunflower oil prices contracted moderately.
International wheat prices were generally steady
The FAO Meat Price Index rose 1.7 percent from its March value. Bovine, ovine, and pig meat quotations were underpinned by solid demand from East Asia. Poultry meat prices remained steady, reflecting generally balanced global markets.
The FAO Cereal Price index rose 1.2 percent in April. This reversed the short-lived drop in March to stand 26 percent above its April 2020 level. Maize prices rose 5.7 percent to reach a level 66.7 percent higher than a year earlier. This rise is a result of smaller-than-anticipated planting intentions in the United States of America. It is also due to concerns about crop conditions in Argentina, Brazil, and the U.S.A. International wheat prices were generally steady, while quotations for rice, barley, and sorghum softened.
The FAO Dairy Price Index increased 1.2 percent from March. Quotations for butter, cheese, and skim milk powder rose due to solid import demand from Asia.
New forecasts for global cereal output, utilization, trade, and stocks
Also, FAO published a set of updated forecasts in the new Cereals Supply and Demand Brief. Global cereal production in 2020 is forecast at 2 767 million tonnes, a 2.1 percent increase from the previous year. World cereal utilization for 2020/21 is pegged at 2 783 million tonnes. This is an increase of 2.7 percent, led by coarse grains. The growth mostly reflects greater-than-earlier-anticipated feed uses in China and the U.S.A.
FAO revised down its forecast for world cereal stocks by the close of the 2021 seasons to 805 million tonnes. This is because of likely drawdowns of maize inventories in China and the U.S.A. The global cereals stock-to-use ratio is now forecast at 28.3 percent, a seven-year low.
World trade in cereals in 2020/21 is forecast to reach 467 million tonnes, a year-on-year expansion of 5.9 percent. The FAO fastest a faster growth for coarse grains than rice and wheat.
FAO also offered its first supply and demand outlook for wheat in the season ahead, 2021/22. It forecast production at 778.8 million tonnes or 0.5 percent more than the 2020 estimate. This is based on an anticipated 6 percent yearly increase in the European Union’s output.
Early prospects for global coarse grains production in 2021 indicate a likely third consecutive year of growth. This is based on increased planted areas anticipated in Brazil, China, Ukraine, and the U.S.A. as well as recovering yields in the EU. Sizeable production increases are also forecast in South Africa and neighbouring countries.
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