FAO: A Record Increase in Food Prices Worldwide

NEW YORK, (ST) – The Food and Agriculture Organization of the United Nations (FAO) announced that the Food prices rose to a record level of the world during the last month, the equivalent ratio of 6.2 percent.
It quoted the British Broadcasting Corporation BBC Abdulreda Abbassian, an economist at the FAO as saying that he expected rising the food prices to continue during the current month due to the tension on the crisis in Ukraine. “The prices could return to normal level immediately after the crisis in Ukraine but without it, the prices may continue to rise,” Abbassian added.

During the last month the prices of all commodities increased in the basket FAO standard with the exception of meat.

 It was the biggest rise in the sugar sector where the increase was the standard rate of 2.6 percent of the price of the previous month, while the increase in the vegetable oils are second in terms of the rise by 9.4 percent and was the biggest increase in global food prices in the previous mid-2012 due to the drought that hit the Midwest the United States has an effect on the price of corn and soybeans.

 FAO also released its Cereal Supply and Demand Brief, noting a favorable early outlook for wheat production in 2014. With some winter wheat crops already developing, FAO’s first forecast for world wheat production in 2014 stands at 704 million tones. This would represent a drop of 1.7 percent from the 2013 record harvest, but it would still be the second largest crop ever.

With the bulk of the coarse grains and paddy crops yet to be planted, it was still too early for a preliminary forecast of global cereal output in 2014.

As for 2013, the latest estimate for world cereal production stands at a record 2 515 million tons (including rice in milled terms), 13 million tons above the February forecast and 9 percent more than the 2012 level. The latest upward adjustment reflects primarily a significant revision to the estimates for Australia and also upward revisions to the figures for wheat and coarse grains in China.

The expected increase in global cereal production in 2013 has already resulted in more affordable prices, which in turn are boosting utilization and trade in 2013/14, and helping to replenish world stocks. As a result, the cereal stock-to-use ratio is now estimated to be approaching 24 percent in 2014, its highest level since 2002/03.

Sh. Kh.