Global food prices fall in March as sugar and vegetable oils slide, says FAO

ROME, — The United Nations Food and Agriculture Organization, FAO, reported on Friday that global food prices fell in March amid large availability of supplies and expectations of strong harvests, projecting “robust cereal harvests” in 2017.

The FAO Food Price Index, which measures the monthly change in international prices for cereals, vegetable oils, dairy, meat and sugar, averaged nearly 171 points in March, marking a 2.8 percent drop from the previous month, while remaining 13.4 percent above its level from a year earlier, according to the agency.

Cereal prices declined 1.8 percent from February, led down by wheat and maize. It is now roughly on par with its March 2016 level.

Vegetable oil prices fell 6.2 percent on the month. Palm oil and soy oil quotations were both lower in March on the back of improving production forecasts, while those of rapeseed and sunflower seed oils also declined due to higher-than-expected availabilities.

Sugar prices plummeted 10.9 percent to its lowest level since May 2016 amid weak import demand and expectations of robust Brazilian supplies entering world markets due to strong harvests and slower domestic uptake for bio-ethanol production.

Dairy prices dropped 2.3 percent as a result of buoyant milk supplies, but remained well above its level from a year ago.

Meat prices rose 0.7 percent, led by a firm import demand from Asia for bovine meat and pig meat.

FAO also released its first world cereal supply and demand outlook for the year ahead, expecting it to be “another season of relative market tranquillity” with grain inventories remaining at near-record levels.

The worldwide cereal production in 2017 is projected at 2,597 million tonnes, just nine million tonnes short of the record set in 2016, according to the latest Cereal Supply and Demand report.

Global wheat production is expected to fall 2.7 percent in 2017 to 740 million tonnes mostly on price-induced planting cuts in Australia, Canada and the United States.

By contrast, total production of coarse grains in 2017 is provisionally expected to rise to a new record level of 1,353 million tonnes, substantially due to a surge in production in Brazil and Argentina, along with a rebound in South Africa after last year’s drought.

Source: Emirates News Agency