Global food prices up in January; cereal prices keep rising despite improved supplies : UN



UNITED NATIONS, Feb 3 (APP): : Global food prices rose notably
in January, led by sugar and cereals, even as markets remain well
supplied, United Nations monthly figures show.
According to a press release from the Food and Agriculture
Organization (FAO), the January Food Price Index – which measures
the monthly change in international prices for five major food
commodity groups: major cereals, vegetable oils, dairy, meat, and
sugar – averaged 173.8 per cent in January, its highest value in
almost two years, marking a 2.1 per cent increase from its revised
December value and 16.4 per cent above the year-earlier level.
While 2016 marked the fifth consecutive year the global food
price index has fallen, January marked its sixth monthly increase
in a row. Sugar prices surged 9.9 per cent in the month, driven by
expectations of protracted supply tightness in Brazil, India and
Cereal prices rose 3.4 per cent from December to a six-month
high, with wheat, maize and rice values all increasing.
International prices of rice also rose, in part due to India’s
ongoing state procurement programme, reducing the quantities
available for export.
Vegetable oil prices rose 1.8 per cent, due mostly to low global inventory levels of palm oil coupled with a slow production recovery
in Southeast Asia. Soy oil prices, by contrast, eased on expectations
of ample global availability.
Dairy prices remained unchanged from December, a marked departure
from the 50 per cent increase it posted between May and December
last year.
Meat prices were also practically unchanged, with a rise in
bovine meat quotations – the result of herd rebuilding in Australia
– offset by lower prices of ovine and other meats.
Worldwide inventories of cereals are on course to reach an
all-time record level by the end of seasons in 2017, according to
FAO’s latest Cereal Supply and Demand Brief.
Latest figures put global cereal stocks at 681 million metric
tonnes, up 1.5 per cent from their December forecasted level and
3 per cent from the previous season. World wheat inventories would
likely hit a new record of 245 million tonnes, marking an 8.3 per
cent annual increase. Coarse grain stocks are forecast to grow by
0.7 per cent to reach their second-highest level on record, while
rice stocks are set to decline slightly although ending the season
at a near-record 170 million tonnes.
FAO says it has also raised its estimate of global cereal
output in 2016 by 15 million metric tonnes to 2,592 million tonnes,
due primarily to larger-than-expected wheat harvests in Australia
and Russia. For rice, excess rains over parts of Viet Nam and
inadequate rainfall in Sri Lanka will likely curb rice output.