Page 4 - Vol.36-No.8 issue

FAO LOWERS FORECAST FOR WORLD CEREAL
EDITORIAL
PRODUCTION, BUT THIS YEAR’S OUTPUT STILL

EXPECTED TO REACH AN ALL-TIME HIGH

Global food prices continued rising for the fifth consec- The FAO Sugar Price Index increased 7.6 percent from
utive month in October, led by cereals, sugar, dairy and September ¬- a move largely influenced by the prospects
vegetable oils, according to a new report from the Food of a lower sugar output in both Brazil and India - the two
and Agriculture Organization of the United Nations. largest sugar producing countries in the world.
The FAO Food Price Index, which tracks international The FAO Meat Price Index, by contrast, declined 0.5 per-
prices of the most traded food commodities, averaged cent from September, marking the ninth monthly decline
100.9 points in October 2020, up 3.1 percent from Septem- since January, driven by drop in pig meat prices reflect-
ber and 6.0 percent above its value in October 2019. ing in part continued influence of the import restrictions
The FAO Cereal Price Index climbed 7.2 percent from the imposed by China on Germany. Bovine and poultry meat
previous month and 16.5 percent above its value in Octo- prices also fell, while prices of ovine meat rose on steady
ber 2019. The surge was mainly driven by wheat prices internal demand and low export supplies.
amid shrinking export availabilities, poor growing con- Despite downward revisions, cereal output still expected
ditions in Argentina and continued dry weather affecting to reach an all-time high In its latest Cereal Supply and De-
winter wheat sowings in Europe, North America and the mand Brief, also published today, FAO reduced the world’s
Black Sea region. Maize, feed barley and sorghum prices 2020 cereal production for a second consecutive month,
also remained under upward pressure in October, while by nearly 13 million tonnes, largely on expectations of di-
those of rice subsided. minished world coarse grains production. However, glob-
The FAO Vegetable Oil Price Index gained 1.8 percent al cereal output is still forecast at a record 2 750 million
during the month, posting a nine-month high, led by firmer tonnes, surpassing the 2019 output by 1.6 percent.
palm and soy oil prices. By contrast, rapeseed oil prices The reduction in the world coarse grains production fore-
declined moderately amid increased uncertainty regard- cast reflects lower expectations for the maize output in the
ing demand in the European Union (EU) following the EU and Ukraine, where continued adverse weather has fur-
recent deterioration of the COVID-19 situation across the ther reduced yield prospects.
region. The global wheat production forecast for 2020 is also
The FAO Dairy Price Index rose 2.2 percent from Sep- trimmed slightly this month, on lower output expectations
tember, with cheese rising the most, followed by skim milk in Ukraine and Argentina due to the impact of dry weather.
powder, whole milk powder and butter. Price increases in Prospects for the 2021 winter wheat crop, which is already
October reflected market tightening for near-term deliv- being sown in the northern hemisphere, are generally
eries, underpinned by robust import demand from Asian strong, reflecting the expectations of increased plantings
and Middle Eastern markets. in response to higher prices in several main producing
countries, notably in the EU.

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