The Food and Agriculture Organization of the United Nations reported that international food commodity prices rose for the 11th consecutive month in April, with sugar prices rising the most while cereal prices resumed their upward trend.
According to UN sources, the monthly FAO Food Price Index is a measure of international price changes for the most traded food commodities in the world. The index has now reached its highest level since 2013. The organization reported yesterday that the sugar price index is nearly 60 percent higher than it was in April 2020, as slow harvest progress in Brazil and frosts in France fueled concerns about tightening global supplies. In the vegetable oil price index, concerns that production growth in major exporters will be lower than expected led to higher international palm oil offers.
Meat price indices showed that beef, lamb and pork offers were all supported by strong demand from East Asia. Poultry prices remained stable, reflecting a generally balanced global market.
The grains price index reversed a brief decline in March and was 26% above year-ago levels. Lower-than-expected planting intentions in the U.S., coupled with concerns about crop conditions in Argentina, Brazil and the U.S., led to a 5.7% month-over-month increase in corn prices and a 66.7% year-over-year gain. International wheat prices were generally stable, while offers for rice, barley and sorghum showed weakness.
In addition, in the dairy price index, strong import demand from Asia pushed up offers for butter, cheese and skim milk powder.
According to the Grain Supply and Demand Brief released at the same time yesterday, world grain consumption forecasts for 2020/21 rose 2.7%, with higher consumption of coarse grains being the main reason for this revision, reflecting higher than expected feed use in China and the US.
The forecast for world cereal stocks at the end of the 2021 season is down 2.3% from the beginning of the period due to possible reductions in corn stocks in China and the United States. The ratio of global grain stocks to consumption is forecast at 28.3 percent, the lowest level in seven years.
World cereal trade is forecast to increase by 5.9 percent year-on-year in 2020/21.
Preliminary forecasts point to record world wheat stocks at the end of the 2022 season, driven by increased stocks in China, although stocks in the rest of Asia and Africa are likely to fall to their lowest levels since 2012/13. Global wheat trade in 2020/21 (July/June) is expected to fall 1.8 percent year-on-year, as lower shipments from Australia, Canada, Russia and the United States are expected to offset gains in exports from Argentina and the European Union.
According to the UN organization, the early outlook for global coarse grains production in 2021 shows a possible third consecutive year of increased production this year, due to an expected increase in planted area in Brazil, China, Ukraine and the U.S. Yields in the EU are expected to pick up, while South Africa and several of its neighbors are also forecast to see significant production growth.
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