Geneva: Favourable soil moisture and government support policies, along with remunerative prices, should spur expanded wheat plantings in China and India, according to the Food and Agriculture Organization of the United Nations (FAO).
This contrasts the FAO projection for 2025 that softer wheat prices may discourage area expansions of the winter wheat crop underway in the northern hemisphere. Below-normal rainfall in key wheat-growing regions in the Russian Federation has led to low soil moisture levels, affecting planting operations.
While global wheat prices declined in November 2024 due to weaker international import demand and increased supplies from the ongoing harvests in the Southern Hemisphere, FAO’s latest Cereal Supply and Demand Brief, released today, expected global wheat output for 2024 to be on par with 2023, at 789 million tonnes.
A FAO report said today that the benchmark for world food commodity prices rose in November 2024 to its highest level since April 2023, increasing by 0.5 per cent from October, driven by surging international vegetable oil quotations.
The FAO Cereal Price Index dropped by 2.7 per cent in November, down 8.0 per cent below a year earlier. Global cereal production in 2024 is forecast to decline by around 0.6 per cent from the previous year to 2,841 million tonnes, a downward revision from October, yet still the second-largest output on record. However, led by anticipated increases in food consumption of rice and wheat, while world cereal utilization is projected to grow by 0.6 per cent to 2,859 million tonnes in 2024/25, global cereal stocks will decline by 0.7 per cent from their opening levels. This, FAO forecasts, will result in a global cereal stock-to-use ratio of 30.1 per cent for 2024/25, down from 30.8 per cent in the previous year but still indicating “a comfortable supply level” globally.
International trade in cereals in 2024/25 is now forecast at 484 million tonnes, down 4.6 per cent from the previous year. Global wheat and maize trade volumes are expected to decline, while rice trade is predicted to increase.
The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, averaged 127.5 points in November 2024, up 5.7 per cent from a year ago while still 20.4 per cent below its March 2022 peak, FAO reported today.
World maize prices remained stable as strong domestic demand in Brazil and Mexico’s demand for supplies from the United States of America were offset by favourable weather in South America, reduced demand for Ukrainian supplies and seasonal pressure from the ongoing U.S. harvest. However, maize output is forecast to decline by 1.9 per cent from the previous year to 1,271 million tonnes, due to lower-than-expected yields in the European Union and the United States of America.
The All-Rice Price Index declined by 4.0 per cent in November, driven by increased market competition, harvest pressures and currency fluctuations. FAO stated its forecast for world rice production in 2024/25 has changed slightly, pointing to a 0.8 per cent annual increase to a record high of 538.8 million tonnes.
Coarse grain crops are being planted in the southern hemisphere. Early indications suggest a contraction in maize sowings in Argentina due to dry conditions and the risk of stunt disease transmitted by leafhoppers. In Brazil, early planting intentions, encouraged by a return of rainfall, point to the same maize area for the 2025 crop. In South Africa, preliminary expectations point to an increase in white maize sowings, driven by record prices, offsetting a contraction in the yellow maize area.
The FAO Vegetable Oil Price Index increased by 7.5 per cent in November from October, marking its second-largest increase in two months and 32 per cent higher than its year-earlier level. Global palm oil prices climbed further amid concerns about lower-than-expected output due to excessive rainfall in Southeast Asia. World soy oil prices rose on global import demand, while rapeseed and sunflower oil quotations increased as tightening global supply prospects affected their respective markets.
The FAO Dairy Price Index maintained its upward trajectory in November, increasing by 0.6 per cent from October, driven by rebounding global import demand for whole milk powder. Butter prices reached a new record level amid strong demand and tight inventories in Western Europe, while cheese prices rose due to limited export availabilities.
The FAO Sugar Price Index declined by 2.4 per cent from October, impacted by the start of the crushing season in India and Thailand and eased concerns over next year’s sugarcane crop prospects in Brazil, where recent rains have improved soil moisture.
The FAO Meat Price Index decreased by 0.8 per cent in November, due mainly to lower quotations for pig meat in the European Union, reflecting abundant supplies and persistently subdued global and domestic demand. World ovine and poultry meat prices fell slightly, while international bovine meat quotations remained stable, with higher Brazilian export prices offset by lower Australian prices.
– global bihari bureau
