Wheat and dairy products drive the fourth consecutive month on month rise, and the global grain supply is in the “comfort zone”
Rome – the latest report of the food and Agriculture Organization of the United Nations (FAO) on December 2 showed that the food price index in the international market rose month on month for the fourth consecutive month in November, strongly supported by the prices of wheat and dairy products.
The FAO food price index averaged 134.4 points this month, up 1.2% month on month, the highest since June 2011. The FAO food price index is a measure of the monthly changes in the international prices of a package of food commodities. Compared with the same period in November 2020, the index increased by 27.3% this month.
The FAO dairy price index led gains in November, up 3.4% month on month. Under the expectation of market tightening, global buyers strive to ensure spot supply, resulting in continued strong import demand for butter and milk powder.
The FAO grain price index rose 3.1% month on month and 23.2% year-on-year in November. The export price of corn rose slightly, and the international rice price generally stabilized, but the wheat price climbed to the highest point since May 2011, which was mainly due to the tight supply due to the high market demand, especially the reduction of high-quality wheat supply; In addition, the untimely rainfall in Australia and the uncertainty caused by Russian export restrictions also supported the rise of wheat prices.
The FAO sugar price index rose 1.4% month on month, more than 40% higher than the same period last year, mainly driven by the rise in ethanol prices. However, the upward trend of world sugar prices is limited by India’s large exports and Thailand’s optimistic export prospects.
The FAO vegetable oil price index fell slightly by 0.3% in November from the record high of the previous month. This reflects a slight decline in the price index of soybean oil and rapeseed oil and a decline in the price of crude oil. International palm oil prices remain strong.
The FAO meat price index fell 0.9% this month compared with October, with four consecutive declines month on month. Affected by the reduction of Chinese procurement, the international quotation of pork fell; Due to the increase in export supply from Australia, mutton prices also fell significantly. International beef and poultry prices remained stable on the whole.
Record grain production is expected to ensure adequate market supply
The latest FAO report on grain supply and demand was also released today. The forecast of world grain output in 2021 was 2.791 billion tons, an increase of 0.7% over 2020, a record high. Compared with the same period in 2020, the forecast of global coarse grain and rice output increased by 1.4% and 0.9% respectively year-on-year, but the forecast of wheat output decreased by 1.0% year-on-year.
The forecast of FAO’s total world grain consumption in 2021 / 22 was 2.81 billion tons, a year-on-year increase of 1.7%; The world grain inventory at the end of the quarter of 2022 decreased by 0.9% compared with the beginning level. Therefore, the ratio of world grain stocks to consumption is about 28.6%, which “indicates that the overall supply situation remains good”, FAO said.
The latest forecast of FAO’s global grain trade volume in 2021 / 22 reached a record 480 million tons, 0.7% higher than that in 2020 / 21. Among them, the global wheat trade volume is expected to increase by 2.2%, completely offsetting the contraction of coarse grain trade.
Low income food deficit countries face a decline in grain production
The report crop prospects and food situation, also released today, shows that conflict and drought are increasing food insecurity in some parts of the world, especially in East and West Africa. According to FAO’s assessment, at present, 44 countries in the world need external food aid, including 33 African countries, 9 Asian countries and 2 Latin American and Caribbean countries.
The 44 countries that need external food aid are Afghanistan, Bangladesh, Burkina Faso, Burundi, Cameroon, Central African Republic, Chad, Congo, Democratic People’s Republic of Korea, Congo Democratic Republic, Djibouti, Eritrea, Eswatini, Ethiopia, Guinea, Haiti, Iraq, Kenya, Lebanon, Haiti, Liberia, Libya, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Namibia, Niger, Nigeria, Pakistan, Senegal, Sierra Leone, Somalia, South Sudan, Sudan, Syrian Arab Republic, Uganda, United Republic of Tanzania, Venezuela, Yemen Zambia and Zimbabwe.
The quarterly report also updates the grain harvest trend. The latest forecast shows that the output of developed countries will increase by 2.0% in 2022, while that of developing countries will decrease slightly by 0.1%. As production in the Near East and East Africa is expected to decline significantly, production in low-income food deficit countries is expected to decline by 2.4%.
Source: FAO
Post time: Dec-09-2021