Global food prices rise again in August on firm demand: FAO

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New Delhi (NVI): The global food prices rose for the third month in a row in August, driven by generally firmer demand and a weaker US dollar, according to a report by Food and Agriculture Organization of the United Nations (FAO).

According to the Food Price Index report, averaged 96.1 points in August, up 2.0 percent from the previous month and reaching its highest level since February.

The report tracks international prices of the most commonly traded food commodities.

In the report, the FAO Cereal Price Index rose by 1.9 percent from July, averaging 7.0 percent above its value in August 2019, with coarse grains leading the rise.

“Sorghum prices rose 8.6 percent – and stood at 33.4 percent above their year-ago level, mostly on the back of strong import demand by China. Whereas, Maize prices rose 2.2 per cent amid concerns that recent crop damages in Iowa would impact supply, the FAO said.

Moreover, the report said the international rice prices also rose, underpinned by seasonally tight availabilities and increasing African demand.

The FAO Sugar Price Index rose by 6.7 percent from the previous month, due to unfavorable weather conditions in the EU and Thailand, the world’s second-largest sugar exporter, as well as strong import demand by China.

Similarly, the FAO vegetable oil price index increased by 5.9 percent, led by firmer values for palm oil especially, but also soy, sunflower and rapeseed oils.

“The moves mainly reflect prospective production slowdowns in leading palm oil producing countries amid firm global import demand,” it said.

The FAO dairy price index also remain unchanged from the previous month, with cheese and whole milk powder demand decreasing while butter’s demand increased.

Although down 8.9 percent from August 2019, the FAO meat price index for August 2020 also remained unchanged to the previous month, as the effect of increased pigmeat demand from China offset the lowered demand of bovine, poultry and ovine.

Furthermore, the FAO did lower its world cereal production forecast based on expected lower maize output from the United States. Despite the lowered forecast, the FAO anticipates global cereal output to total 2.765 billion tonnes in 2020, 58 million tonnes above 2019.

The organization expects global cereal stocks to rise 1.7 per cent to 895.5 million tonnes by the end of 2021 seasons.

“Translating to a world cereal stocks-to-use ratio of 31.8 per cent, slightly down from July but still relatively high from a historical perspective,” it added.

World trade in cereals for 2020-21 is forecast at 441.4 million tonnes, 1.6 per cent above 2019-21 due to anticipated larger shipments of rice and coarse grains, the FAO stated.

-RJV