United Nations: World food prices on the rise

World food prices rose slightly in April, up for the third month in a row but they remained almost 10% lower than a year earlier, the United Nations food agency said yesterday.

The Food and Agriculture Organisation’s — FAO — food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 151.8 points, up 0.7% from March.

The index has declined annually for four straight years to near seven-year lows amid slowing global growth, but ticked up in April as gains in vegetable oils and cereals offset declines in dairy and sugar.

Food prices on international markets in April were almost 10% lower than in the same month a year ago and more than one third off historic highs hit in 2011.

However, the FAO said its dairy price index dropped 2.2%, as stocks of butter and cheese in major exporters continued to grow.

The FAO Meat Price Index rose 0.8%, pushed up by strengthening US demand for Australian beef.

Only sugar and vegetable oils were more expensive than in April 2015.

Palm oil, quoted at a 17-month high, drove the increase in the overall index as concerns about a grim production outlook for the cooking ingredient coincided with rising global demand.

Cereals contributed more gently, rising 1.5% on the month mainly thanks to the influence of a weaker US dollar on maize prices, and spillover from soaring oilseeds prices. Rice prices declined marginally.

Wheat markets made limited gains due to expectations of large supplies in the new season.

“The larger figure results almost entirely from improved prospects for wheat production, as winter weather conditions have been favourable for prospective yields in the EU, the Russian Federation and Ukraine,” the UN agency said.

“At 717 million tonnes, the 2016 wheat output forecast remains 16 million tonnes short of last year’s record,” it said.

The FAO said world cereals output in 2016-17 could be the second-largest global harvest ever at 2.526bn tonnes, almost unchanged from the previous year.

World wheat output is due to hit 716.9m tonnes in 2016-17, the FAO said, raising its previous forecast.

“World cereal utilisation in the season ahead is expected to rise by only 1.1% due to slower growth in the use of cereals — especially wheat and barley — as livestock feed,” the FAO said.


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