Adedapo Adesanya
By Adedapo Adesanya
The benchmark index of international food commodity prices declined in February, for the 11th consecutive month, albeit only marginally.
The Food and Agriculture Organisation of the United Nations (FAO), in its monthly price watch, said the FAO Food Price Index averaged 129.8 points in February, a marginal 0.6 per cent decrease from January but 18.7 per cent down from its peak in March 2022.
The decline in the index, which tracks monthly changes in the international prices of commonly-traded food commodities, reflected drops in quotations for vegetable oils and dairy products that more than offset a steep rise in sugar prices.
The FAO Cereal Price Index remained virtually unchanged from January. International wheat prices rose marginally during the month, as concerns over dry conditions in the United States of America and robust demand for supplies from Australia were largely countered by strong competition among exporters. International rice prices eased by 1.0 per cent due to a slowdown in trading activities in most major Asian exporters, whose currencies also depreciated against the United States dollar.
The FAO Vegetable Oil Price Index declined 3.2 per cent from January, with the world prices of palm, soy, sunflower seed and rapeseed oils all lower.
The FAO Dairy Price Index declined 2.7 per cent during the month, with butter and skim milk powder international quotations registering the steepest decline.
The FAO Meat Price Index also remained almost unchanged from January. World poultry prices continued to decline amid abundant export supplies, notwithstanding the avian influence outbreaks in several leading producer countries, while international pig meat prices rose, mostly due to concerns over tighter export availabilities in Europe.
By contrast, the FAO Sugar Price Index rose 6.9 per cent from January to its highest level in six years due largely to a downward revision to the 2022/23 production forecast in India, as well as lower international crude oil prices and ethanol prices in Brazil.
In its latest Cereal Supply and Demand Brief, also released on Friday, FAO released its preliminary forecast for world wheat production in 2023, predicting a global outturn of 784 million tonnes, which would be the second highest on record though down from the previous year. Strong outputs are expected in North America as farmers increase acreage in response to high grain prices.
In southern hemisphere countries, the production outlook for coarse grain crops in 2023 is generally favourable, and total maize plantings in Brazil are foreseen to reach a record level.
FAO also revised its projection for world cereal production in 2022 to 2 774 million tonnes upwards, still 1.3 per cent lower than in 2021.
Global cereal utilization in 2022/23 is forecast at 2 780 million tonnes, representing a 0.6 per cent decline from the previous season, largely due to an anticipated contraction in the utilization of all major coarse grains.
FAO forecasts global cereal stocks ending in 2023 to decline by 1.2 per cent from their opening levels, down to 844 million tonnes, as drawdowns in coarse grain and, to a lesser extent, rice stocks are foreseen to outweigh an expected build-up in wheat inventories. Based on the new forecasts, the world cereal stocks-to-use ratio would stand at 29.5 per cent, deemed an “overall comfortable level”.
World trade in cereals is predicted to contract by 1.8 per cent to 473 million tonnes.
