ROME, ITALY — World food prices reached their highest point in two years during the month of November, driven by prices of vegetable oils and meat, while cereal prices slipped, according to the Food and Agriculture Organization of the United Nations (FAO).
The FAO Food Price Index, which tracks monthly changes in the international prices of commonly-traded food commodities, averaged 177.2 points over the month, up 2.7% from October and up 9.5% from the same period a year earlier.
“The FAO Vegetable Oil Price Index rose by 10.4% in November, as palm oil price quotations rose amid robust global import demand, increased use for the production of biodiesels and expectations of possible supply shortages next year,” the FAO said. “Rapeseed and soy oil values also rose.”
The FAO Meat Price Index increased by 4.6%, its largest month-on-month increase in more than a decade. The FAO said price quotations for bovine and ovine meats rose the most, buoyed by strong import demand, especially from China ahead of year-end festivities. Pig and poultry meat prices also rose.
The FAO Cereal Price Index, by contrast, declined by 1.2% amid competition among the world’s leading wheat exporters. Rice values also fell while U.S. maize export prices remained under downward pressure even as those for Argentina and Brazil were generally firmer, the FAO noted.
The FAO’s worldwide cereal production forecast for 2019 anticipates an all-time high harvest of 2.714 billion tonnes, which would be 2.1% higher than in 2018.
The latest Cereal Supply and Demand Brief update reflects higher-than-expected coarse grain yields in China, Russia and Ukraine.
World output of coarse grains, including maize, is now forecast at 1.433 billion tonnes, marginally short of the record level registered in 2017.
“After an upward revision for the E.U., global wheat production in 2019 is now forecast to rise by 4.8% from 2018 to reach 766.4 million tonnes,” the FAO said.
The FAO expects world rice production is likely to reach 515 million tonnes, a mere 0.5% drop from the record set in 2018, with Egypt, Madagascar and Nigeria set to lead a rebound for African rice production this season.
The FAO's world cereal utilization forecast for 2019-20 remains at 2.709 billion tonnes, up around 21 million tonnes from the previous season. World cereal stocks at the close of seasons in 2020 are now expected to reach 863 million tonnes.
“At this level, the global cereal stock-to-use ratio would approach a relatively high level of 31%, underscoring a comfortable global supply situation,” the FAO said.
The FAO’s forecast of world trade in cereals for 2019-20 is at 416 million tonnes, 1.1% higher than in 2018-19.