ROME, ITALY — Food commodity prices dipped in October while global cereal production for 2018 has increased, the Food and Agriculture Organization (FAO) said on Nov. 1.
The FAO Food Price Index, a measure of the monthly change in international prices of a basket of food commodities, averaged 163.5 points in October, down 0.9% from September and 7.4% below its level a year earlier.
The FAO Vegetable Oil Price Index fell by 1.5%, its ninth consecutive monthly drop, to reach its lowest level since April 2009. The latest slide was mostly driven by sluggish global import demand for palm oil and large inventories held by the commodity’s major exporting countries. International soy oil prices increased slightly.
The FAO Cereal Price Index rebounded, rising 1.3% from September, mostly due to firmer maize quotations from the United States. Rice prices, by contrast, fell, partly influenced by currency movements weighing on Japonica and fragrant varieties.
The FAO also has raised its forecast for global cereal production in 2018 to 2.601 billion tonnes, primarily due to higher estimates for wheat production in Canada and China. Nonetheless, the new forecast remains 2.1% below the record level achieved in 2017.
Global rice output this year is expected to surpass last year’s all-time high by 1.3%, reaching 513 million tonnes, according to the FAO’s latest Cereal Supply and Demand Brief.
World wheat production in 2018 is now forecast at around 728 million tonnes, marking a 4.3% decline from the previous year. Winter wheat crops, to be harvested in 2019, are currently being sown in the Northern Hemisphere, while in the E.U., the United States and India generally remunerative prices are expected to stimulate an increase in plantings.
Worldwide output of coarse grains is forecast at 1.360 billion tonnes, a 2.2% drop from 2017. Coarse grain crops are currently being planted in the Southern Hemisphere countries, and early prospects indicate an expansion in maize plantings in South America.
The FAO expects world cereal utilization to rise by 0.2% to a record 2.653 billion tonnes, spurred by higher feed and industrial uses of maize, especially in China and the United States. The use of wheat for food consumption is anticipated to rise by 1%, while that for rice is expected to increase by 1.1%.
Worldwide cereal stocks at the close of seasons in 2019 are now forecast to reach almost 762 million tonnes, some 6.5% below their record-high opening level.
Total inventories of coarse grains are expected to fall for the first time in six years, while those of wheat are set to decrease by 4.5%, with drawdowns to be led by major exporters. World rice stocks, by contrast, are expected to rise by 2.6% to 176.6 million tonnes.