Global Food Prices Advance

ROME - Dec 5/19 - SNS -- Higher prices for m,eat products and vegetable oils lifted the FAO's global food price index to its highest level in two years last month.

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly-traded food commodities, averaged 177.2 points over the month, up 2.7% from October and 9.5% from the same period a year earlier.

The FAO Cereal Price Index, by contrast, declined by 1.2% amid stiff competition among the world's leading wheat exporters. Rice values also fell while U.S. maize export prices remained under downward pressure even as those for Argentina and Brazil were generally firmer.

The FAO Vegetable Oil Price Index rose by 10.4% in November, as palm oil price quotations rose amid robust global import demand, increased use for the production of biodiesels and expectations of possible supply shortages next year. Rapeseed and soy oil values also rose.

STAT's global pulse price index was also higher in November, advancing 2.5% during the month to average 138.04, up 0.9% from the same month last year. The biggest gains were recorded by the U.S. dry bean price index, which averaged 127.19 in November, up 6.7% from October and 13.6% above the same month last year.

The FAO Meat Price Index increased by 4.6%, its largest month-on-month increase in more than a decade. Price quotations for bovine and ovine meats rose the most, buoyed by strong import demand, especially from China ahead of year-end festivities. Pig and poultry meat prices also rose.

The FAO Sugar Price Index rose by 1.8% from October, buoyed by mounting indications that world sugar consumption in the coming year will surpass production - which is being hampered by less-than-ideal growing conditions in Thailand, India, France and the United States of America.

The FAO Dairy Price Index rose marginally from October, nudged up as milk production in Europe entered its seasonal low and global demand remained strong.

Record Cereal Criops Expected

FAO also released a new worldwide cereal production forecast for 2019, anticipating an all-time high harvest of 2,714 million metric tons (MT), which would be 2.1% higher than in 2018.

The latest upward revision, contained in the new Cereal Supply and Demand Brief also released today, reflects higher-than-previously predicted coarse grain yields in China, the Russian Federation and Ukraine.

World output of coarse grains including maize is now forecast at 1 433 million MT, marginally short of the record level registered in 2017. After an upward revision for the European Union, global wheat production in 2019 is now forecast to rise by 4.8% from 2018 to reach 766.4 million MT. World rice production is likely to reach 515 million MT, a mere 0.5% drop from the record set in 2018, with Egypt, Madagascar and Nigeria all poised to spearhead a rebound for African rice production this season.

FAO's world cereal utilization forecast for 2019-20 stands at 2,709 million MT, up around 21 million MT from the previous season. World cereal stocks at the close of seasons in 2020 are now expected to reach 863 million MT. At this level, the global cereal stock-to-use ratio would approach a relatively high level of 31%, underscoring a comfortable global supply situation.

World trade in cereals in 2019-20 is forecast at 416 million MT, some 1.1% higher than in 2018-19.