STAT Communications Ag Market News

Global Food Prices Eased in February

ROME - Mar 3/23 - SNS -- Global food ingredient prices eased in February from their January averages, according to the Food and Agriculture Organization of the United Nations (FAO).

The FAO Food Price Index averaged 129.8 points in February, a marginal 0.6% decrease from January but 18.7% down from its peak in March 2022. The decline in the index, which tracks monthly changes in the international prices of commonly-traded food commodities, reflected drops in quotations for vegetable oils and dairy products that more than offset a steep rise in sugar prices.

The FAO Cereal Price Index remained virtually unchanged from January. International wheat prices rose marginally during the month, as concerns over dry conditions in the United States of America and robust demand for supplies from Australia were largely countered by a strong competition among exporters. International rice prices eased by 1.0% due to a slowdown in trading activities in most major Asian exporters, whose currencies also depreciated against the United States dollar.

The FAO Vegetable Oil Price Index declined 3.2% from January, with the world prices of palm, soy, sunflower seed and rapeseed oils all lower.

STAT's global pulse index averaged 100.87 points in February, down 0.1% from January and down 15.7% from the same month a year earlier. Within the complex, Canada's pulse price index dropped 17.9% on the year to average 100.46 in February, while the U.S. index fell 16.% on the year to 100.67 points.

The FAO Dairy Price Index declined 2.7% during the month, with butter and skim milk powder international quotations registering the steepest decline.

The FAO Meat Price Index also remained almost unchanged from January. World poultry prices continued to decline amid abundant export supplies, notwithstanding the avian influence outbreaks in several leading producer countries, while international pig meat prices rose, mostly due to concerns over tighter export availabilities in Europe.

By contrast, the FAO Sugar Price Index rose 6.9% from January to its highest level in six years, due largely to a downward revision to the 2022/23 production forecast in India, as well as lower international crude oil prices and ethanol prices in Brazil.

Early production outlook for 2023 wheat crops

In its latest Cereal Supply and Demand Brief, the FAO released its preliminary forecast for world wheat production in 2023, predicting a global outturn of 784 million metric tons (MT), which would be the second highest on record though down from the previous year. Strong outputs are expected in North America, as farmers increase acreage in response to high grain prices.

In southern hemisphere countries, the production outlook for coarse grain crops in 2023 is generally favourable, and total maize plantings in Brazil are foreseen to reach a record level.

FAO has also revised upwards its projection for world cereal production in 2022 to 2,774 million MT, still 1.3% lower than in 2021.

Global cereal utilization in 2022/23 is forecast at 2,780 million MT, representing a 0.6% decline from the previous season, largely due to an anticipated contraction in the utilization of all major coarse grains.

FAO forecasts global cereal stocks ending in 2023 to decline by 1.2% from their opening levels, down to 844 million MT, as drawdowns in coarse grain and to a lesser extent rice stocks are foreseen to outweigh an expected build-up in wheat inventories. Based on the new forecasts, the world cereal stocks-to-use ratio would stand at 29.5%, deemed an "overall comfortable level".

World trade in cereals is predicted to contract by 1.8% to 473 million MT.

Only active subscribers can read all of this article.

If you are a subscriber, please log into the website.

If you are not a subscriber, click here to subscribe to this edition of the STAT website and to learn more about becoming a subscriber.