ROME, ITALY — Food commodity markets are becoming more balanced and less price volatile than in recent years thanks to improved supplies and a recovery in global inventories of cereals, according to the United Nation’s Food and Agriculture Organization's (FAO) Food Outlook report published on Nov. 7.

"The prices for most basic food commodities have declined over the past few months. This relates to production increases and the expectation that in the current season, we will have more abundant supplies, more export availabilities and higher stocks," said David Hallam, director of FAO's Trade and Markets Division.

The sharp increase in 2013 cereal production mostly stems from a recovery of maize crops in the United States and record wheat harvests in CIS countries. World rice production in 2013 is expected to grow only modestly.

Global stocks, ending in 2014, are also anticipated to increase, by 13%, to 564 million tonnes, with coarse grains alone up by 30%, mostly in the U.S. Wheat and rice stocks are also projected to rise, by 7% and 3% respectively. 

The expansion in world cereal stocks would result in the global cereal stocks-to-use ratio reaching 23%, well above the historical low of 18.4% in 2007-08.

In 2013, the world food import bill is set to decline by 3% to $1.15 trillion, with import costs of cereals, sugar, vegetable oils and tropical beverages falling, but dairy, meat and fish remaining firm, according to FAO's latest Food Outlook. 

The FAO Food Price Index, also published in this report, rose slightly in October, averaging 205.8 points. This was 2.7 points, or 1.3% above September, but still 11 points, or 5.3% below its October 2012 value. The slight increase was largely driven by a surge in sugar prices, although prices of the other commodity groups were also up. 

The Index, which is a measure of the monthly change in international prices of five major food commodity groups (including 73 price quotations), has undergone some changes in the way it is calculated, although the new approach did not significantly alter the values in the series. The revised Index has also been extended back to 1961. The revisions are discussed in the Special Feature section of Food Outlook.