The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, averaged 170 points in April, up 1,5% from March while still 2,3% below its year-ago level.
The increase spanned all the covered food commodities except cereals, where large export availabilities spurred a fourth consecutive monthly decline.
Global price increases
The FAO Cereal Price Index dipped 2,8%, led by wheat and maize, for which the production outlooks are positive. Rice quotations were broadly stable.
The FAO Dairy Price Index rose 5,2% from March, its fourth consecutive monthly increase. This was amid robust global import demand combined with supply concerns linked to dry weather in Oceania.
The FAO Meat Price Index increased by 3%, led by a sharp jump in international price quotations of pig meat due to a surge in import demand in Asia. The latter is primarily in China, where the rapid spread of African swine fever has triggered a sharp drop in domestic production. Also bovine, poultry and ovine meat prices all firmed.
The FAO Vegetable Oil Index also rose by 0,9%. Palm oil quotations rebounded somewhat due to rising global demand and inventory drawdowns in the major exporting countries. Soya oil prices notched up due primarily to robust domestic demand in the United States from both the biodiesel and food sectors.
The FAO Sugar Price Index rose 0,8%. The increase was largely driven by firmer crude oil prices, as higher energy prices encourage the use of sugarcane in Brazil to produce ethanol for local sale.
“Comfortable” cereal supply and demand
Early prospects point to world cereal output reaching a new record of 2 722 million tons in 2019. This represents a rebound of 2,7% from the previous year, according to the new Cereal Supply and Demand Brief.
World cereal utilisation is also expected to reach a new high, rising by 1,5% in the coming year. Global food consumption of cereals is projected to rise by 1,1%. Rice consumption is projected to increase even faster, while the demand for coarse grains for animal feed and industrial uses is expected to be even stronger.
Based on those forecasts, world cereal stocks would be drawn down marginally during 2019, to 847 million tons. This will result in a small drop in the global cereal stock-to-use ratio to 30,1%. International prices are likely to remain under pressure against a backdrop of overall comfortable supply and demand balances for nearly all the cereals. Trade prospects appear positive, especially for wheat and rice. – Press release, FAO
