Oluchi Chibuzor
The latest Food and Agriculture Organization (FAO) Food Price index has revealed that global food commodity prices rebounded rapidly in August after two consecutive months of decline.
This was led by strong gains in the international price quotations for sugar, wheat and vegetable oils as the index tracks monthly changes in the international prices of commonly traded food commodities.
Revealing the latest trend in a statement, FAO said its Food Price Index averaged 127.4 points in August, up 3.1 per cent from July and 32.9 per cent from the same month in 2020.
“The FAO Sugar Price Index rose by 9.6 per cent from July, was pushed up by concerns over frost damage to crops in Brazil, the world’s largest sugar exporter. With the increase mitigated by good production prospects in India and the European Union as well as decline in crude oil prices and a weakening of the Brazilian real, ”the report stated.
However, FAO Vegetable Oil Price Index increased by 6.7 per cent in August, with international palm oil prices reverting to historic highs due to protracted concerns over below-potential production and resulting inventory drawdowns in Malaysia as quotations for rapeseed oil and sunflower oil also rose.
In the same vein, the FAO Cereal Price Index averaged 3.4 per cent higher in August than July.
According to FAO, world wheat prices jumped by 8.8 per cent due to reduced harvest expectations in several major exporting countries.
Meanwhile, Maize prices, by contrast, declined 0.9 per cent as improved production prospects in Argentina, the European Union and Ukraine moderated the lowered production forecasts in Brazil and the United States of America. International rice prices remained on a downward trajectory.
Similarly, World cereal supplies remain adequate despite lower production prospects as Global cereal production in 2021 is forecast to reach 2788 million tonnes, up by 0.7 percent from the year before but below July’s expectations.
World wheat output is now expected to contract by 0.7 per cent to 769.5 million tonnes this year, due predominantly to the negative impact of prolonged drought conditions in North America as well as adverse weather in Kazakhstan and the Russian Federation.
Global coarse grains output is forecast to grow by 1.3 per cent in 2021 to 499million tonnes, even as production in Brazil is expected to contract. Global rice output is seen rising by 0.9 per cent year-on-year to reach an all-time high of 519million tonnes, buoyed by record yields reported for Viet Nam.
According to the statement, FAO now projects worldwide cereal utilization in 2021/22 to rise by 1.4 per cent from the previous marketing year to 2 809 million tonnes, supported by a strong growth in feed use as well as higher food consumption.
FAO said the July forecast for global cereal stocks by the close of seasons in 2022 has been lowered to 809 million tonnes, a 0.9 percent drop from opening levels.
Global rice stocks, it stated, are on track to reach their second-highest level on record, while dry weather is expected to squeeze wheat inventories – with ending stocks in the United States of America reaching an eight-year low and those of Canada dipping to their lowest level in 40 years.
“Overall, the world stocks-to-use ratio for cereals is projected at 28.1 percent, down from 29.9 percent in 2021/22 “but still indicating a relatively comfortable supply from a historical perspective.
World trade in cereals is now expected to decline in 2021/22, contracting by 1.3 percent to 466 million tonnes with foreseen decreases in wheat and coarse grains outweighing a rising world trade of rice, “FAO said.
