World food prices during November fell to its lowest level in more than two years.

As declines in vegetable oils, dairy and cereal were very notable in 2018, the United Nations (UN) food agency reported that world food prices dropped to its lowest level in more than two years.

That’s good news according to the UN agency, since global food indexes can serve as a proxy for global food security.

The Food and Agriculture Organisation’s (FAO) food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 160.8 points in November — down from a revised 162.9 in October, and its lowest level since May 2016.

During November, only the sugar price index gained, rising 4.4% from October.

Cereal prices fell partly because new crops weighed on rice export quotations and export competition drove down maize, FAO said.

Global palm oil prices fell considerably due to a marked reduction in demand — “fuelled by both persisting large inventories in leading exporting countries and the recent contraction in global mineral oil prices,” the FAO stated.

Soy and sunflower oil prices weakened due to “abundant supplies across the US, the EU, and several emerging markets and positive production prospects in the Black Sea region”.

Dairy prices dropped 3.3% from October, for a sixth straight monthly decline, and meat prices slipped slightly.

Forecasts

FAO said global cereals output in 2018/19 was seen at 2.595bn tonnes, down marginally from the previous forecast and 2.4% below last year’s record high production.

FAO’s forecast for world wheat production in 2018/19 was 725.1m tonnes, a revised prediction which is some 2.8m tonnes lower than the UN group’s previous forecast, “reflecting reduced estimates for this year’s harvests in Turkey and the Russian Federation”, said the FAO.

FAO’s forecast for world cereal stocks at the close of seasons in 2019 was 762 million tonnes, unchanged from November.

These world food prices represent a continuation of a downward trend for the future.

2019-01-04T01:26:58+00:00

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