Global Food Price Inflation Accelerated in May
ROME - Jun 3/21 - SNS -- Global food prices rose rapidly in May despite expectations of record high world cereal production, according to the Food and Agriculture Organization of the United Nations (FAO) reported today.
The FAO Food Price Index averaged 127.1 points in May, 4.8% higher than in April and 39.7% higher than in May 2020.
Surging international prices for vegetable oils, sugar and cereals led the increase in the index to its highest value since September 2011 and only 7.6% below its all-time peak in nominal terms.
International pulse markets also posted significant gains in May, rising 2.6% on the month to reach 90.9 points, up 12% from the same month last year, marking the first time the STAT index has been over 90 points since September of 2017.
The FAO Cereal Price Index increased 6.0% from April, led by international maize prices, which averaged 89.9% above their year-earlier value. However, maize prices started to retreat at the end of May, mostly on improved production prospects in the United States of America. International wheat prices also showed a late-month decline but averaged 6.8% higher in May than in April, while international rice quotations held steady.
The FAO Vegetable Oil Price Index gained 7.8% in May, mainly reflecting rising palm, soy and rapeseed oil quotations. Palm oil prices rose due to slow production growth in Southeast Asian countries, while prospects of robust global demand, especially from the biodiesel sector, drove soyoil prices higher.
The FAO Sugar Price Index increased by 6.8% from April, due largely to harvest delays and concerns over reduced crop yields in Brazil, the world's largest sugar exporter, even as large export volumes from India contributed to easing the price surge.
The FAO Meat Price Index increased by 2.2% from April, with quotations for all meat types rising due to a faster pace of import purchases by China, as well as rising internal demand for poultry and pig meats in the leading producing regions.
The FAO Dairy Price Index rose by 1.8% in the month, averaging 28% above its level of one year ago. The increase was led by solid import demand for skim and whole milk powders, while butter prices declined for the first time in almost a year on increased export supplies from New Zealand.
Record Cereal Output Expected In 2021
In its first forecast of world cereal grain production for 2021, the FAO projected the harvest could reach a record high 2,821 million metric tons (MT), led by a foreseen 3.7% annual growth in maize output.
World cereal utilization in 2021-22 is predicted to expand by 1.7% to 2,826 million MT. Total cereal food consumption is forecast to rise in tandem with world population, while an increased use of wheat for animal feed is also anticipated.
Based on those forecasts, world cereal stocks at the close of crop seasons in 2021-22 are anticipated to increase by 0.3% to 811 million MT. While the expected modest rise would end three consecutive years of decline, the global stocks-to-use ratio is forecast to decline further to 28.1%.
FAO's first forecast for world trade in cereals in the new season indicates an increase of only 0.3% from the high level estimated for 2020-21, when trade is expected to expand by as much as 6.3% to a peak level of 468 million MT.
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