Rome: The benchmark for world food commodity prices had its steepest climb in 18 months in October 2024, led by a sharp increase in vegetable oil quotations, the Food and Agriculture Organization of the United Nations (FAO) reported today.
Moreover, global cereal production in 2024 is forecast to decline by around 0.4 per cent from the previous year to 2,848 million tonnes, the second-largest output on record, according to FAO’s new Cereal Supply and Demand Brief, also released today.
The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally traded food commodities, averaged 127.4 points in October, up 2.0 per cent from September 2024, and 5.5 per cent from its value a year ago. Nevertheless, the index remained 20.5 per cent below its March 2022 peak.
The FAO Vegetable Oil Price Index spiked by 7.3 per cent in October, hitting a two-year high due to rising quotations for palm, soy, sunflower, and rapeseed oil, driven mainly by concerns about production.
The FAO Cereal Price Index increased by 0.9 per cent in October, led by rising wheat and maize export prices. Global wheat prices were affected by unfavorable weather conditions in major northern hemisphere exporters as well as the re-introduction of an unofficial price floor in the Russian Federation and rising tensions in the Black Sea region. World maize prices rose as well, driven in part by strong domestic demand and transport challenges in Brazil due to low river levels. By contrast, the FAO All Rice Price Index declined by 5.6 per cent in October, reflecting lower indica rice quotations driven by expectations of heightened competition among exporters following India’s removal of export restrictions on non-broken rice.
The FAO Sugar Price Index increased by 2.6 per cent amid persisting concerns over the 2024/25 production outlook in Brazil following extended dry weather conditions. Rising international crude oil prices also contributed to the increase in sugar quotations by shifting more sugarcane toward ethanol production, while the weakening of the Brazilian real against the United States dollar limited the increase.
The FAO Dairy Price Index rose by 1.9 per cent in October, averaging 21.4 per cent above its level at the same time last year. The increase was primarily driven by higher international cheese and butter prices, while quotations for milk powders declined.
Bucking the general upward trend, the FAO Meat Price Index dropped by 0.3 per cent from September, mainly due to lower pig meat prices resulting from increased slaughter rates in Western Europe amid weak domestic and international demand. World poultry prices fell slightly in October, while those of ovine meat remained stable. By contrast, bovine meat prices increased moderately, underpinned by stronger international purchases.
Declining maize output
World wheat production is expected to increase, buoyed by production upturns in Asia as a result of area expansions and conducive weather conditions, which more than offset large declines among key producers in Europe. Global coarse grain production is forecast to decline from its 2023 record level, mostly due to a sizeable crop in maize output because of adverse weather conditions. Meanwhile, world rice output in the 2024/25 season could reach a record high of 538.9 million tonnes, boosted by record-breaking plantings.
World cereal utilization is forecast to grow by 0.5 per cent to 2,857 million tonnes in 2024/25, led by increasing food consumption of rice and wheat. Global cereal stocks are predicted to expand by 0.6 per cent to 889 million tonnes, largely due to an expected expansion in rice inventories. This would result in a global cereal stocks-to-use ratio of 30.6 per cent, near the five and ten-year average levels.
International trade in cereals is now forecast at 485 million tonnes, representing a 3.9 per cent contraction from the 2023/24 level. Global trade of rice is forecast to increase, while that of wheat and coarse grains to decline.
FAO’s next Food Outlook Report, to be released on November 14, 2024, will provide a more detailed analysis of global cereal markets.
45 countries need external assistance for food, five face acute emergencies
The Agricultural Market Information System (AMIS), hosted at FAO, also released its monthly Market Monitor today featuring, in addition to the regular analysis, a discussion on the evolution of export restrictions on staple crops since 2007.
Some 45 countries around the world are assessed to need external assistance for food, according to the latest Crop Prospects and Food Situation report, a triannual publication by FAO’s Global Information and Early Warning System (GIEWS) also published today.
The report offers details on conditions in these countries, which include 33 countries in Africa, nine in Asia, two in Latin America and the Caribbean and one in Europe, along with regional data on the highly variegated expected 2024 cereal outputs around the world.
Conflicts and insecurity are identified as the primary drivers of severe food insecurity, with populations in the Gaza Strip, Haiti, Mali and the Sudan facing IPC 5 levels of acute food insecurity in 2024.
The aggregate cereal output in the 44 Low-Income Food Deficit Countries (LIFDCs) is forecast to be marginally above the five-year average, with overall production in African LIFDCs anticipated to remain near-average, as lower harvests in southern Africa are anticipated to be offset by increases in other regions. Import needs for this group are also forecast to grow by about 8 per cent from the five-year average, with the increase to be concentrated in eastern and southern Africa.
– global bihari bureau
