FAO: Cereal Prices Increase to Highest Levels in Decade
FAO anticipates that many countries will reduce purchases, not always in response to improved domestic supplies but rather because of high international prices.
27/12/06 Cereal prices, particularly for wheat and maize, have reached levels not seen for a decade, according to FAO’s latest Food Outlook report.
Poor harvests in key producing countries and a fast-growing demand for biofuel production have driven up grain prices, while supply constraints have also dominated the rice economy, the report said.
Global expenditures on imported foodstuffs in 2006 could reach a historic high of US$374 billion, over 2 percent more than the previous year’s level. Import bills for developing countries are anticipated to rise by almost 5 percent from 2005, mainly as a result of price increases rather than an increase in the actual volume of food imports.
FAO anticipates that many countries will reduce purchases, not always in response to improved domestic supplies but rather because of high international prices. Moreover, higher energy costs may force many of the poorer developing countries to curtail expenditures on imported staples to sustain their fossil fuel needs. FAO’s latest forecast of world wheat output in 2006 stands at roughly 592 million tons, almost 33 million tons, or 5.3 percent, down from 2005. A turnaround is likely, however, with increased winter plantings and good growing conditions raising expectations for a strong rebound in 2007 harvests, FAO said.
