Global food prices steady in August: FAO

By Muhammed Ali Gurtas

ANKARA

Global food prices remained steady in August, as cereal prices rebounded while vegetable oils and sugar declined, the United Nations Food and Agriculture Organization (FAO) said on Thursday.

The FAO Food Price Index averaged 167.6 points last month, virtually unchanged from its revised estimate for July and 5.4 percent below its level in August 2017, the organization said in a written statement.

"The FAO Cereal Price Index rose 4.0 percent during the month, with wheat prices rising twice as much due to deteriorating crop prospects in the EU and Russia," it said.

The organization noted that international maize quotations increased by over 3 percent while rice prices eased in August.

"The FAO Vegetable Oil Index declined 2.6 percent from July, nearing a three-year low as palm, soy and sunflower oil quotations all fell amid favorable production trends and, in the case of palm oil, weak global import demand," FAO said.

The organization said that the FAO Dairy Price Index posted its third consecutive monthly decline last month, falling 1.5 percent amid relatively thin seasonal volumes.

"While droughts may adversely affect milk production growth in parts of Europe and Australia, New Zealand's output prospects are improving," it added.

On the sugar prices, the UN body said that its sugar price index fell 5.4 percent in August – to its lowest level over the last decade -- mainly due to the continued depreciations of the currencies of major exporters Brazil and India.

"The FAO Meat Price Index was broadly unchanged on the month, as pigmeat and ovine meat quotations rose on strong import interests from China, offsetting declining poultry and bovine meat prices, with the latter under pressure by high export availabilities from the U.S.," it added.

- Forecasts for global cereal production

"FAO now forecasts global cereal production in 2018 to reach 2,587 million tons, a small upward revision from July but a three-year low and 2.4 percent below last year's record high level," the organization said.

The organization noted that dry and hot weather intensified yield reductions around Europe, and the world wheat production forecast for this year amounted to almost 722 million tons -- the smallest crop since 2013.

"On the other hand, worldwide production of coarse grains was revised up by 15 million tonnes since July, with improved outlooks for maize in China, Ukraine and the U.S., more than offsetting expected output reductions in the EU and Russia," it said.

"FAO now expects 2018 coarse grain output to be nearly 1,354 million tons, some 2.6 percent below the level of 2017," it added.

The organization said global rice production is expected to reach a new record of almost 512 million tons in this year.

FAO also updated its projection for world cereal utilization to 2,648 million tons, "largely due to greater use of maize for feed and industrial use and the robust rice harvest."

"Cereal stocks are also being reduced, especially in China, the EU and Russia, and the global cereal stock-to-use ratio is expected to slide to 27.3 percent, a five-year low," it said.

"The forecast for world trade in cereals over the 2018/2019 season has been revised up to nearly 414 million tons, about 1.5 percent below the previous year's record high."