Global food prices steady in June 2019

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Global food prices declined marginally in June 2019, as lower prices of dairy products and vegetable oils more than offset a significant jump in maize quotations, and are now very close to their level of a year ago, according to a report by the Food and Agriculture Organization of the United Nations released today.

The FAO Food Price Index, which tracks monthly changes in the international prices of commonly traded food commodities, averaged 173 points in June, down 0.3 per cent from May.

The FAO Cereal Price Index rose 6.7 per cent in June, as expectations of much tighter maize export suppliers from the United States of America pushed quotations up for maize and, as a spillover, also for wheat. Rice prices were broadly stable.

The FAO Sugar Price Index in June was up 4.2 per cent from the previous month, strongly influenced by the Brazilian Real’s appreciation against the U.S. dollar.

By contrast, the FAO Dairy Price Index decreased by 11.9 per cent, marking its first decline in five months, led by frail demand for cheese and butter.

The FAO Vegetable Price Index declined 1.6 per cent during the month, with palm oil and soy oil prices both down on the back of sluggish global import demand and expectations of ample global supplies, respectively.

The FAO Meat Price Index increased by 1.5 per cent from its revised value for May, driven by strong import demand from East Asia for ovine, pig and poultry meats to offset domestic production shortfalls due to the spread of African Swine Fever.

FAO kept its forecast for worldwide production in 2019 unchanged at 2 685 million tonnes. That would mark a 1.2 per cent increase from 2018, with the bulk of this year’s growth expected to come from higher production of wheat. Worldwide wheat production should rise by 5.6 per cent in 2019 to reach nearly 771 million tonnes, buoyed by record output in India. By contrast, global production of coarse grains is expected to decline to 1 398 million tonnes this year, due to weak prospects in parts of Africa, China, and especially the United States of America. World rice output is forecast at 516 million tonnes, close to the high level of 2018.

Shekhar Ghosh is consulting editor, Indoasiancommodities.com. He has edited and written for publications like Business India, Business Standard, Business Today, Outlook and many other international publications. He can be reached at shekhar.ghosh@indoasiancommodities.in.

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