The FAO Food Price Index averaged 170.8 points in February, up 1.1% from the previous month and now just 2.7% below its year-ago level.
FAO’s Food Price Index is a trade-weighted index tracking international market prices for five major food commodity groups.
“Global stocks of wheat and coarse grains are both poised to hit record levels in the current marketing year, of 272.7 million tonnes and 309.8 million tonnes, respectively,” according to FAO’s Cereal Supply and Demand Brief.
The FAO lowered its estimated worldwide wheat harvests this year, while noting that inventory levels are poised to hit a record high. It also estimates global supply conditions for the main cereals remain strong and has increased its forecast for end-of-season stock levels by 14 million tonnes.
FAO’s Cereal Price Index represents wheat, rice and the main coarse grains, including maize, which increased 2.5%, posting its second consecutive notable monthly rise, with unfavorable weather adversely affecting the outlook for winter wheat in the United States and maize in Argentina.
“With harvesting of last year’s cereal crops now almost complete, FAO raised its global cereal production estimate for 2017 to 2.642 billion tonnes following upward revisions for coarse grains such as maize in Australia and East and West Africa,” the FAO said. “Rice output likely reached 502.2 million tonnes in 2017, an all-time high.”
The FAO issued its first 2018 global wheat production forecast of 744 million tonnes.
“While above average, that would represent the second annual dip, reflecting lower anticipated yields in the E.U. and Russia,” the FAO said. “Unfavorable weather in South America and Southern Africa, along with an expected contraction in plantings, also points to a likely output decline for maize in the southern hemisphere.”