Food prices down slightly but remain high, reports FAO
The FAO monthly food price index for April revealed that food prices seems to have stabilised at the relatively high level of 214 points, despite a slight fall in prices for the March to April 2012 period.
Publishing its latest FAO Food Outlook (found here), the UN organisation said prospects for the second half of this year and into the next indicate “generally improved supplies and continuing strong demand.”
“Although the outlook for the second half of this year and into the next indicates generally improved supplies, demand remains strong and global food import bill in 2012 is expected to fall only slightly from the 2011 record,” said the report.
The FAO added that the fall of 1.4% in April was the first after three consecutive months of increases – warning that although the index is now significantly lower than its record level of 235 points in April 2011, it is still ‘well above’ figures of under 200 which preceded the 2008 food crisis. As a result, it said the global food import bill in 2012 could decline to $1.24 trillion (down slightly from 2011’s record of $1.29 trillion).
After two years of what it describes as “relatively ample supplies” the market for oilseeds and derived products is set to tighten again – with global oilcrop production insufficient to satisfy growing demand.
Global soybean production is estimated to decrease by around 10%, with oilcrops other than soybeans only partly compensating for the shortfall.
The report warned that as a result total oilcrop production should drop to a three-year low, down 4% from last season. International prices for such products – which have risen sharply since January – are therefore set to remain firm.
World sugar output in is set to increase by close to 8 million tonnes reaching nearly 173 million tonnes – a 4.6% increase over last year. An anticipated reduction in production in Brazil, the world’s largest producer, is expected to be offset by increased production in other major producing countries, including Thailand and India.
“For the second consecutive year, production is anticipated to surpass consumption, with a surplus expected of some 5.4 million tonnes helping to rebuild relatively low stock levels.”
Milk production is forecast to grow by 2.7% (to 750 million tonnes) with Asia expected to account for most of the increase. However the FAO said higher output is anticipated in most regions.
“World trade in dairy products is expected to continue expanding in 2012. Demand remains firm, with imports anticipated to reach 52.7 million tonnes of milk equivalent.”
“Asia will continue to be the main market, followed by North Africa, the Middle East, and Latin America and the Caribbean.”