September 02, 2022
12:57
World food prices continued to decline in August, according to the Food and Agriculture Organization of the United Nations (FAO).
World food prices have continued to decline for the fifth consecutive monthvegetable oils falling even below their level of a year ago in August 2021announced the Food and Agriculture Organization of the United Nations (FAO) on Friday.
But the prices are still high
The FAO Food Price Index, which tracks changes in international prices for a basket of commodities, has been falling steadily since the all-time high reached in March, following Russia invaded Ukraine. In August, it marked a new, more moderate decline, 1.9% over one month. He remained, however, at consistently high levelsstanding at 138 points in August, at a level “7.9% higher than its value a year ago”says the organization.
The FAO Price Index vegetable oils fell by 3.3% over one month“reaching a level slightly lower than in August 2021”. Abundant availability of palm oil for export to Indonesia and the resumption of sunflower shipments from Ukraine, one of its major producers, pushed prices down. Only soy “increases moderately, because of concerns regarding the impact of adverse weather conditions on production in the United States”, which suffered hot weather and lack of water this summer.
The FAO index of the cereal prices fell by 1.4%, driven by “a 5.1% decline in international wheat prices, reflecting improved production prospects in North America and Russia, as well as the resumption of exports from the Black Sea ports in Ukraine”.
The organization once more this month raised its forecasts for world wheat production. Thanks to the harvest announced as exceptional in Russia, “at the highest level ever recorded”, and to favorable weather conditions in the United States and Canada, it should reach 777 million tonnes, slightly below 2021 production.
The effects of the drought in Europe
However, the historic drought that has been hitting Europe since the spring promises a deplorable maize harvest, with yields falling 16% below the five-year average in the European Union. As such, the FAO had to “significantly” revise downwards its outlook for world cereal production in 2022, all products combined. She should decrease by 38.9 million tonnes, falling by 1.4% compared to the previous year, to reach 2.77 billion tonnes.
At the end of the 2022/2023 campaign, world cereal stocks are expected to stand at 845 million tonnes, down slightly by 2.1% compared to last year. “The global cereal stocks-to-use ratio should therefore decline slightly and stand at 29.5% (compared to 30.9% in 2021/2022), a level that is still relatively high from a historical point of view”, according to the FAO.