World dairy and meat prices rise, reports FAO

World food prices rose 1.5% in April, with a jump in dairy and meat prices offsetting a fall in cereal prices, the Food and Agriculture Organisation reports.

The United Nations food agency has also issued its first forecast for global cereal production this year, seeing a record output for 2019 after a decline in 2018.

Reuters reports that the FAO’s food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat, and sugar, averaged 170.1 points last month against an upwardly revised 167.5 points in March.

The March figure was previously given as 167.0. The index in April was at its highest level since June, but still some 2.3% below its level of one year ago.

The FAO dairy price index jumped 5.2% from March’s value, its fourth successive monthly rise, driven by strong import demand for butter, whole milk powder, and cheese.

The meat price index rose 3% month on month, pushed higher in part by a rise in pig meat quotations following a surge in import demand in Asia, notably China, where the rapid spread of African Swine Fever has impacted the local market.

The sugar and vegetable oil indices also rose, but the cereal index fell 2.8% last month — its fourth consecutive decline, with wheat leading the way down as prospects for a strong 2019 production hit prices.

FAO said the cereals index in general was pressured by “large export availabilities and slowing trade”.

In its first forecast for 2019, FAO predicted world cereal production would come in at a record 2.722bn tonnes this year, up 2.7% on 2018 levels, when output declined.

“Wheat, maize, and barley account for most of the rise in cereal output, with projected year-on-year increases of 5.0%, 2.3%, and 5.4% respectively,” it said.

Global rice output was stable. FAO said global food consumption of cereals was set to rise by at least 1.1% this year, due to the growing world population, with world cereal utilisation seen rising 1.5% in 2019/20. This means world cereal stocks are likely to be drawn down by 0.7% to 847m tonnes — the lowest volume since 2015/16.

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