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World Food Price Advance Continues

ROME - Mar 4/21 - SNS -- International food ingredient prices continued to advance in February, according to the Food and Agriculture Organization of the United Nations (FAO), posting its ninth consecutive monthly increase.

The FAO Food Price Index averaged 116.0 points in February, 2.4% higher than the previous month and up 26.5% from a year ago. STAT's global pulse price increase advanced 6.1% on the month to average 85.04 points in February, up 9.8% from the same month last year.

The FAO Vegetable Oil Price Index gained 6.2%, reaching its highest level since April 2012. Prices for palm, soy, rape and sunflower seed oils all rose.

The FAO Cereal Price Index averaged 1.2% higher than in January. Sorghum prices rose 17.4% in the month, driven by ongoing strong demand from China. International prices of maize, wheat and rice were either stable or edged up slightly.

The FAO Sugar Price Index rose by 6.4% from January, as production declines in key producing countries together with strong import demand from Asia prompted ongoing concerns over tighter global supplies. Expectations of a production recovery in Thailand and a bumper crop in India dampened the increase.

The FAO Dairy Price Index rose by 1.7%, led by international export quotations for butter, where firm imports by China met limited supplies from Western Europe. Cheese prices declined, partly due to high inventories in the United States of America.

The FAO Meat Price Index increased 0.6%, pushed higher by tight supplies of bovine and ovine meats in key producing regions. By contrast, pig meat price quotations fell, underpinned by reduced purchases by China amidst heavy oversupplies and a rise in unsold pigs in Germany due to the continued ban on exports to Asian markets.

FAO Expects Record Wheat Harvest

The FAO said global wheat production in 2021 is likely to increase and hit a new record of 780 million metric tons (MT), as expectations of a rebound in production in the European Union more than offset weather-impacted production prospects for output in the Russian Federation.

Maize production in South Africa is expected to reach near-record levels in 2021, while outputs in South America are forecast at well above-average levels. The crop is yet to be planted in countries north of the equator.

FAO's new projections for 2020-21 include a 2.0% annual increase in global cereal utilization to 2,766 million MT and 5.5% growth in world trade in cereals to 464 million MT. Global cereal stocks are now forecast to end 2021 at 811 million MT, 0.9% below their opening levels, pushing down the stock-to-use ratio to 28.6%. World rice and wheat stocks are expected to increase, while those of coarse grains to decline.

It estimates that aggregate cereal production by the 51 Low-Income Food Deficit Countries rose 3.0% in 2020 from the previous year to 502.4 million MT, as recoveries in Southern Africa and the Near East outweighed a decline in Central Africa. However, aggregate cereal import requirements by the group in the 2020-21 marketing year are expected to rise to 74.1 million MT, with the Far East and West Africa subregions posting the largest additional needs.

Early production outlooks for 2021 are broadly favorable but drought-like conditions in Afghanistan and southern Madagascar are of emerging concern.

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