FAO’s New Findings

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Food and Agriculture Organization’s new food price index has been issued.  It showed that World food prices are on a constant increase in   a 10th consecutive month in March, hitting their highest level since June 2014.  The surge can visibly be seen in vegetable oils, meat and dairy indices.  FAO’s food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 118.5 points last month versus a slightly revised 116.1 in February.  According to  FAO’s statement worldwide cereal harvests remained on course to hit an annual record in 2020, adding that early indications pointed to a further increase in production this year. FAO’s cereal price index fell 1.7 percent month on month in March, ending eight months of consecutive gains, but still 26.5 percent higher than the same period last month. Among major cereals, wheat export prices dropped the most, declining 2.4 percent on the month, reflecting good supplies and encouraging production prospects for the 2021 crops, as per the issued index. When it comes to FAO’s vegetable oil price index, it surged 8 percent on the month to reach its highest level since June 2011, lifted by higher prices for palm, soy, rape and sunflower oils. Dairy prices increased  for a 10th month running, registering a 3.9 percent increase. FAO further revealed that one of the drivers in the sector was milk powder, which was boosted by a surge in imports in Asia, especially China, due to concerns about short-term supplies. The meat index rose to 2.3 percent, but unlike all the other indices, it was still slightly down on a year-on-year basis. Similarly, Sugar prices dropped 4 percent month on month, but was still up 30 percent on the prev. FAO raised its forecast for the 2020 cereal season to 2.765 billion tonnes from a previous estimate of 2.761 billion, pointing to a 2 percent increase year on year .while predicting the index and prices  FAO said it is expected that global cereal production will be increased for a third consecutive year in 2021.

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