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The FAO Food Price Index continued to rise in March for the tenth consecutive month. The Index increased 2.1 percent from February, bringing it to its highest value seen since June 2014. The rise was led by increased prices for vegetable oils, meat, and dairy. Cereal prices declined in March.
Futures prices for most staple food commodities have fallen since February because of market supply chain disruptions associated with the spread of the COVID-19 virus and lower oil prices, among other factors. However, overall, price variability in the major agricultural commodity markets has remained relatively calm in the face of COVID-19-related shutdowns. Until recently, the exceptions to this relative calm have included hard wheat and coffee. Hard wheat saw moderate and high levels of price variability from April 9 to June 15. This appeared to be related to tightening of wheat markets with lower stock-to-utility ratios, measures taken by two major wheat-producing countries (Kazakhstan and Russia) to limit exports, and reports of prospects of less favorable growing conditions in parts of Ukraine and other parts of Europe. Price variability in coffee was driven by low stock levels and supply disruptions, but these conditions calmed in the second half of May.
The FAO’s latest Crop Prospects and Food Situation Report for 2016 forecasts world cereal production at 2,578 million tonnes, 1.7 percent above 2015 cereal output. This gain is being driven mainly on larger maize and wheat crops. The Crop Prospects and Food Situation Report is published four times a year and provides a review of the food situation by geographic region; it also includes a section dedicated to Low Income Food Deficit Countries (LIFDC) and a list of countries requiring external food assistance.
The latest Food Price Monitoring and Analysis (FPMA) Bulletin from GIEWS, released on December 9, reports mixed but low trends for global wheat prices in November. Benchmark US Wheat (No. 2 Hard Red Winter) prices fell slightly from October and remain nearly 10 percent below November 2015 levels. This decline was driven by higher 2016 production and ending stock estimates, as well as a strong US dollar; however, falling prices slowed somewhat due to unfavorable 2017 weather forecasts in several wheat-producing countries coupled with strong import demand.
The FAO Food Price Index, released today, fell slightly in November but remains 10.4 percent higher than its November 2015 level. This month's small decline, driven mostly by falling oil prices, interrupted the rising trend seen since the start of 2016.
The Cereal Price Index fell 0.6 percent in November and is as much as 12 points below its year-earlier level. Good global supply prospects, particularly for wheat in Argentina and Australia, have supported this decrease.