The Food Price Index by the Food and Agricultural Organisation (FAO) has shown optimistic favourable production for the year 2013.
The index made available to NaijaAgroNet shows that this is coming after three months of decline, while increases in oil and fats prices offset lower cereals and sugar quotations whereas dairy and meat values remain unchanged.
FAO's monthly Cereals Supply and Demand Brief available to NaijaAgroNet indicated that the revision mostly reflects adjustments to maize production estimates in China, North America and the European CIS countries.
But even at the new level, the brief stated that global cereal output would still be 2 per cent down on record.
However, FAO early prospects for 2013 cereal production point to increase world wheat output, contributing largely to this prospect in an estimated 4 to 5 per cent increase in the area under wheat in the European Union, where weather conditions have also been generally favourable so far, but in the United States, the outlook is less favourable, which is attributed to because the condition of the crops are reported to be very poor.
FAO Senior Grains Economist, Abdolzreza Abbassia said that even with the tight supply situation, the weather still remains an important determinant of prices.
“So, cereals productions need to increase this year in order to avoid unexpectant price surges,” he said.
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