World Food Prices Up for Fourth Consecutive Month
03 Jun 2016 --- Global food prices rose for the fourth consecutive month in May while world commodity markets are likely to remain stable in the coming year, according to figures from the United Nations food agency.
The Food and Agriculture Organization (FAO) world food price index-which measure monthly changes in international prices of a basket of food commodities-rose 2.1 percent in May, the fourth consecutive monthly increase, but this was around seven percent below food prices last year.
This means that the world food import bill is expected to fall to $986bn this year, which is the first time is has fallen below the $1 trillion mark in seven years.
There were price increases in the majority of food commodities in May apart from vegetable oils, which fell back after a strong April.
Sugar revealed the biggest price increase, up 11.7 percent in May on the previous month, as concerning production prospects in India, the number two sugar market in the world, outweighed a bumper crop and large export availabilities in Brazil.
Cereal prices rose by 1.6 percent, helped by a sharp increase in maize prices.
Meat prices were up two percent, buoyed by strong import demand from Asia for pigmeat from the European Union.
Suffering dairy prices, which are down nearly a quarter on last year, managed to nudge up by 0.4 percent in May, buoyed by improved prices in the EU and sustained international demand for whole milk powder and butter.
But vegetable oil prices were down 1.8 percent, hurt by falls in palm oil while weaker import demand in China, India and the EU.
Looking ahead, the FAO said the wheat production is set to reach a 15-year high this year, helped by major surges in the US and China.
This means that wheat production will outstrip purchase of wheat for the fourth year in a row amid a market where more farmers turn to maize to feed their livestock.
Dairy prices, meanwhile, are predicted to remain weak while meat production is expected to be stable although poultry output is forecast to grow.
Global palm oil output is expected to shrink for the first time in 18 years, the FAO said.
The FAO also raised its world cereal production forecast for 2016 to 2.543billion tonnes, just 0.7 percent below the record high of 2014.
The new production figure is 17 million tonnes higher than reported in May, reflecting upward revisions for wheat and maize in major producing countries.
The FAO also revealed that commodity markets are likely to remain stable for year ahead, pointing to solid production prospects and abundant stocks.
