Global food price index holds steady
ROME – The United Nation’s Food and Agriculture Organization’s (FAO) Food Price Index averaged 213 points in August, unchanged from July. The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities.
“This is reassuring," said Director-General José Graziano da Silva, who presented the Index at a press conference in Rome. "Although we should remain vigilant, current prices do not justify talk of a world food crisis. But the international community can and should move to calm markets further.”
The FAO Meat Price Index advanced 4 points or 2.2 percent from July to average 170 points in August, according to FAO. All meat prices increased on grain-intensive hog and poultry sectors. The August price increase follows three consecutive months of declines, FAO said.
The FAO Food Price Index advanced 6 percent in July after three months of decline, according to FAO. International prices of cereals and oils and fats were flat in August. However sugar prices saw sharp declines, which compensated for rising meat and dairy prices. The FAO Index remains high at 25 points FAO. But it's still below its peak of 238 points in February 2011 and 18 points below its August 2011 level, FAO said.
The FAO Cereal Price Index averaged 260 points in August with some increases in wheat and rice offsetting a slight weakening in corn. The impact of drought conditions on US corn crops and deteriorating wheat crops in the Russian Federation initially underpinned export quotations. Prices eased toward the end of August following heavy rains in drought-stricken areas of the US and an announcement that the Russian Federation would not impose export restrictions.
FAO forecast global cereal production at 2.295 billion tonnes, down 52 million tonnes, or 2.2 percent from record levels in 2011. The forecast is roughly 4 percent below the estimate in FAO's previous report in July. The decline reflects the worsening of US corn production prospects because of severe and widespread drought conditions, according to FAO.
Global cereal use is forecast at 2.317 billion tonnes in 2012-2013 representing a decline from the previous season. High grain prices are expected to curb demand, especially for corn-based ethanol production, FAO said.
Global coarse grains production is forecast to decline 17 million tonnes or 1.5 percent to 1.148 billion tonnes compared to 2011, according to FAO. The decline mainly reflects a smaller corn crop, which is forecast at 864 million tonnes in 2012, 20 million tonnes less compared to 2011.