DUSHANBE, November 9, 2012, Asia-Plus — The FAO Food Price Index fell one percent in October 2012, and for the first ten months of the year food prices were on average eight percent lower than in the same period in 2011.
The Index reportedly dipped two points to 213 points from September”s revised level of 215 points. The decline was largely due to lower international prices of cereals and oils and fats, which more than offset increases in dairy and sugar prices.
Meanwhile the FAO Food Outlook, a bi-annual global market report also published on November 8, noted that lower international prices and freight rates, together with lower cereal purchases, could push down the world food import bill in 2012.
Global expenditure on food imports was forecast at $1.14 trillion in 2012, 10 percent lower than last year”s record level.
According to Food Outlook, the balance between global cereal supply and demand is forecast to tighten considerably in 2012/13, due mainly to likely declines in wheat and maize outputs. World cereal production is forecast to fall by 2.7 percent from previous year”s record crop, leading to a 25 million ton contraction in world stocks.
World rice production in 2012 may surpass last season”s record, supported by favorable growing conditions. Steady import demand, together with very ample export supplies, are sustaining an expansion of trade in 2012, with a further, albeit small, increase foreseen in 2013.
World sugar production is forecast to reach a new record, more than covering projected global sugar consumption. Large export availabilities in key supplying countries, along with a rebuilding of sugar inventories in major importing countries, are expected to boost trade in 2012/13.
For meat, global markets are challenged by high feed prices, stagnating consumption and falling profitability. Growth in total meat output in 2012 is forecast at less than 2 percent.
The FAO Dairy Price Index averaged 194 points in October, up 3 percent (or 6 points) from September. A seasonal tightening of export supplies and low stocks, along with a firm world demand, are responsible. Milk prices could increase further because of lack of substantial growth in output in the main exporting countries. Milk production is expected to continue to grow in many countries.
