Global food commodity markets are on a stable path for the year ahead, with solid production prospects and abundant stocks pointing to a broadly stable outcome for prices and supplies, the UN food agency said.
It said in its latest monthly report that lower food prices than last year means that the world’s food import bill are on course to fall to $986 billion this year – below $1 trillion for the first time since 2009 – even as traded volumes increase.
Wheat production in 2016 will outstrip utilisation for the fourth year in a row, boosting inventories of the world’s most important cereal to a 15-year high, with major surges in China and the United States, it said.
“That’s an increasingly popular option in China, where the government’s decision to lower maize reserves is expected to boost consumption of that coarse grain. China’s move should have important effects on international markets, leading to sharp declines in demand for barley and sorghum. Dwindling international trade may intensify competition among major exporters,” FAO said.
Decisions to release government stockpiles may also affect rice prices, which began to stabilise in late 2015 after a prolonged decline, and even rebounded in May, the report said.
It said dairy prices are projected to remain weak, while fish prices appear poised to remain contained due to a vibrant aquaculture production. Meat production in general is expected to be stable although poultry output – largely for export – is forecast to grow.
Upward price pressures do exist for vegetable oils as soy output in South America and palm oil in Southeast Asia were subject to heavy losses in the wake of El Niño and production prospects have deteriorated. Global palm oil output is expected to shrink for the first time in 18 years, FAO said.