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Friday, May 4, 2018

Food prices hold steady in April

The Food and Agriculture Organisation (FAO) Food Price Index has showed broadly steady in the month of April, 2018 with the average of 173.5 points for the month, a tiny notch up from March and 2.7 percent higher than in the same month of 2017, reports NaijaAgroNet.

Prices of cereals and dairy products continued their recent rising trend, while those of sugar continued their decline.

FAO also released its first forecasts for the 2018/19 marketing season, predicting a decline in global cereal output and reserves, both of which have been at or near record highs.

Early prospects for global cereal markets in the year ahead are favourable, despite a forecasted decline, according to FAO's new Cereal Supply and Demand Brief, also released today.
Global cereal crops output in 2018 is expected to fall to 2 607 million tonnes, about 1.6 percent below the near-record harvest of 2017.

The decline is mostly due to an anticipated contraction in maize production, especially in the United States of America. Lower wheat output is mostly associated with an expected decline in the Russian Federation after an exceptional outcome the year earlier. Meanwhile, FAO tentatively forecasts world rice production to increase by 1.3 percent to reach 510.6 million tonnes, setting a new record high, due primarily to expanded cultivations in Asia.

As for cereal utilization, FAO's new forecast - both food and feed - also points to an all-time high of 2 626 million tonnes.

That reflects a projected 1.0 percent increase in world rice utilization, a 0.8 percent expansion in global wheat utilization and a 0.4 percent rise in total utilization of coarse grains, of which maize feed use is expected to increase by as much as 2.8 percent to a new high of 615 million tonnes. The largest year-on-year increase in the feed use of maize is envisaged in China and South America.

As a result, FAO expects world cereal stocks at the close of seasons ending in 2019 to decline by 2.7 percent and the world cereal stocks-to-use ratio to drop to 27.2 percent, down from its 16-year high level of 28.8 percent in 2017/18 but well above the historical low of 20.4 percent registered in 2007/08.

FAO's first forecast of international trade in cereals in the year ahead is pegged at 406 million tonnes, implying a mere 0.6 percent decline from the all-time high anticipated for the current season.

Isaac Oyimah/GEE

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