DUSHANBE, September 27, 2010, Asia-Plus — World grain prices a re continuing to rise and may reach the 2008 peak soon.
Russia’s RIA Novosti reports participants at extraordinary intesessional meeting of the FAO’ Inter Governmental Groups (IGG) on gain and rice have come to such a conclusion. The meeting took place at FAO headquarters in Rome on September 24.
According to RIA Novosti, the FAO report stresses that grain price hike will affect, first of all, developing countries that import grains. According to experts’ estimates, these countries will be forced to pay a total of US$27.8 billion for grain purchases in 2010-2011, which is 8 percent more than last year. Among the countries that will suffer most from grain price hike are Morocco, Kyrgyzstan, Tajikistan and Mongolia, RIA Novosti reported.
In the meantime, Reuters reported non September 24 that UN FAO said on Friday that crop failures and speculation – not market fundamentals – were the main causes of recent price volatility in grain markets and there is no sign of an impending food crisis. The charges were made in a draft report after the extraordinary meeting of the FAO”s IGG.
While acknowledging the sudden increase in prices and the deterioration of prospects for cereal markets in recent months, for wheat in particular, the IGG groups concluded that this was not an indication of an impending food crisis.
The groups held the extraordinary inter-sessional meeting as the FAO, in its separate report on food security and crop prospects, said world cereal output this year is expected at 2.239 billion tons, slightly higher than forecast previously and sufficient to cover projected global demand in 2010-2011.
“Unexpected crop failure in some major exporting countries followed by national responses and speculative behavior, rather than global market fundamentals, have been the main factors behind the recent escalation of the world prices and the prevailing high price volatility,” the IGG draft report said.
The draft report also said unexpected price hikes and volatility were an important threat to food security and that their root causes should be tackled.
The IGG groups also proposed enhancing market information and transparency and intensifying FAO”s information gathering methods and looking at ways to manage the risks of market volatility.
Earlier on Friday, in its latest report on food security and crop prospects, the FAO raised the forecast by just under 1 million tons from its previous estimate on September 1, Reuters reported. The new forecast would be the third-largest crop on record and just 1 percent below last year”s level, despite a sharp reduction in wheat and barley production in drought-affected Russia and other former Soviet states, FAO said. “At the current forecast level, the 2010 cereal production, coupled with large carry-over stocks, should be adequate to cover the projected world cereal utilization in 2010-2011,” the FAO report said.
The projection for cereal utilization was broadly stable at 2.248 billion tons, with the expected 9 million ton production shortfall met by large inventory levels, FAO said.
World wheat production is now forecast at 650 million tons, up 4 million tons since September 1 thanks to an improved outlook in Australia.
Projected coarse grains output, on the other hand, was revised down by 3 million tons to 1.122 billion tons, now slightly below last year”s level due to a cut in projected output of maize in the United States.
FAO noted that international grains prices have surged since the start of July due to drought-reduced crops in exporting countries from the CIS nations and Russia”s decision to ban exports.
