Oilseeds Lift Global Food Prices
ROME - Feb 3/22 - SNS -- Supply-side constraints for vegetable oils helped push the FAO Food Price Index to an average 135.7 points in January, up 1.1% higher from December, the United Nation's agency reports.
The FAO Vegetable Oils Price Index increased 4.2% during January, reversing its December decline to reach an all-time high. Quotations for all major oils rose, also supported by rising crude oil prices. Palm oil prices were largely under pinned by concerns over a possible reduction in export availabilities from Indonesia, the world?s leading exporter, while soy oil prices were supported by robust import purchases, particularly from India, rapeseed oil prices were pushed up by lingering supply tightness, and sunflower seed oil quotations were impacted by supply tightness and surging global import demand.
Boubaker Ben-Belhassen, Director of FAO?s Markets and Trade Division said, "Reduced export availabilities on top of other supply-side constraints, especially labor shortages and unfavorable weather, largely pushed vegetable oil prices up to an all-time high. There is a concern the impacts of these constraints will not ease quickly."
STAT's global prices index was modestly firmer in January, rising 0.4% from December to average 126.51, up 48.8% from the same month last year. Average values in both Canada and the United States were firmer din January, but February is off to a weaker start as international competition for global demand increases.
The FAO Cereal Price Index in January increased marginally, by 0.1%, from December. Maize export prices rose by 3.8% during the month, spurred by worries about persistent drought conditions in South America, while world wheat prices declined by 3.1% on the back of large harvests in Australia and Argentina. Lower harvests and steady purchases by Asian buyers led to a 3.1% monthly increase in international rice prices.
The FAO Dairy Price Index increased by 2.4%, its fifth consecutive monthly rise, with the steepest increases registered for skim milk powder and butter. Reduced export availabilities from Western Europe and below-average expectations for milk production in Oceania in the months ahead contributed to the tightening in global dairy markets, as did processing and transportation delays linked to COVID-19-related labor shortages.
The FAO Meat Price Index increased slightly in January, with world bovine meat prices reaching a new peak as global import demand exceeded export supplies, while ovine and poultry meat prices softened as exportable supplies outstripped import demand. Pig meat quotations rose slightly, in part due to rising input costs dampening global supply.
The FAO Sugar Price Index was the only subindex to post a decrease in January, down 3.1% from the previous month due to favorable production prospects in major exporters India and Thailand, as well as improved rains and lower ethanol prices in Brazil.
Modest Increase In Grain Output
Looking at cereal grains, the FAO estimates production ended up at 2,793 million metric tons (MT) in 2021, up 0.8% from the previous year.
Global wheat output in 2021 is expected to be on par with 2020, while the production of coarse grains is projected to be 1.3% larger and that of rice to grow by 0.7%.
For 2022, global wheat plantings are expected to expand, buoyed by mostly conducive weather conditions in the northern hemisphere, although high input costs could deter a larger expansion. The outlook for maize is robust, with high prices pointing to record plantings in Argentina and Brazil.
Worldwide cereal utilization in 2021-22 is forecast to increase by 1.6% year-on-year, pointing to a likely decline in the world cereal stocks-to-use ratio to 28.7%, slightly lower than the previous year?s but still a historically comfortable level.
Trade in cereals in 2021-22 reached 481 million MT, up 0.4% from the previous marketing year and a record level. This reflects expectations of a 2.0% increase in global wheat trade and an almost 4.0% increase in the volume of globally traded rice, more than offsetting a 1.5% contraction anticipated for coarse grains.
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