Business in Brief
Import bill
High food prices are putting pressure on Least Developed Countries (LDCs)
who have seen their food import bill soar by almost a third from last
year, the report found. The global cost of national food imports is
expected to approach $ 1.3 trillion this year.
World cereal inventories are forecast to increase by 3.3 percent from
their reduced opening levels, to 507 million tonnes by the end of
seasons in 2012. At this level, the world cereal stocks-to-use ratio for
2011/12 is expected to approach 22 percent, up only slightly from
2010/11.
Cereal Price Index
International cereal prices have declined in recent months, with the
FAO Cereal Price Index registering an eleven month-low of 232 points in
October. But nonetheless cereal prices, on average, remain five percent
higher than last year’s already high level.
Severe problems caused by flooding recently marred rice production
prospects in Thailand. However, impact on the international market has
been limited so far given large reserves.
Large global supplies of sugar have put downward pressure on sugar
prices since June. Improved supplies also weighed on dairy markets while
strong palm oil output and record sunflower seed crops have driven
prices down in the oils sector in recent months.
According to Food Outlook prices generally remain ``extremely
volatile,” moving in tandem with unstable financial and equity markets.
``Fluctuations in exchange rates and uncertainties in energy markets are
also contributing to sharp price swings in agricultural markets,” FAO
Grains Analyst Abdolreza Abbassian noted.
Below recent highs
Most agricultural commodity prices could thus remain below their
recent highs in the months ahead, according to FAO’s biannual Food
Outlook report also published last week. The publication reports on
analyzes developments in global food and feed markets.
In the case of cereals, where a record harvest is expected in 2011,
the general picture points to prices staying relatively firm, although
at reduced levels, well into 2012.
Food Outlook forecast 2011 cereal production at a record 2,325
million tonnes, 3.7 percent above the previous year. The overall
increase comprises a 6.0 percent rise in wheat production, and increases
of 2.6 percent for coarse grains and 3.4 percent for rice. Globally,
annual cereal food consumption is expected to keep pace with population
growth, remaining steady at about 153 kg per person.
FAO Food Price Index down in October
The FAO Food price index dropped to an 11-month low in October,
declining four percent, or nine points, to 216 points from September.
Nonetheless prices still remain generally higher than last year and very
volatile, FAO said.
The drop was triggered by sharp declines in international prices of
cereals, oils, sugar and dairy products. Meat prices declined the least.
However FAO’s November Index published last week showed that prices last
month were still some five percent above the corresponding period last
year.
An improved supply outlook for a number of commodities and
uncertainty about global economic prospects is putting downward pressure
on international prices, although to some extent this has been offset by
strong underlying demand in emerging countries where economic growth
remains robust. |