FAO Food Price Index Rises Further, Amidst Tight Supply and Demand for Wheat, Palm Oil

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Tightening supply conditions and robust demand for staples such as wheat and palm oil have caused the World Food Commodity prices to rise in September, Food and Agriculture Organisation of the United Nations (FAO) has sais.

However, the report also said that the World cereal production is expected to lag behind global consumption despite hitting an all-time high.

In a statement, FAO said its Food Price Index averaged 130.0 points in September, up 1.2 percent from August and 32.8 percent higher than in September 2020.

FAO said its Cereal Price Index in September increased by 2.0 per cent from the previous month, with world wheat prices up almost four per cent – and as much as 41 percent higher than a year earlier – due to tightening export availability amid strong demand.

“World rice prices also rose in September, while those of maize increased by a moderate 0.3 per cent – averaging 38 percent higher year-on-year – as improved global crop prospects and the start of harvests in the United States of America and Ukraine largely countered the impact of hurricane-related port disruptions in the U.S, “FAO stated.

Reacting to the prices, the FAO Senior Economist, Mr. Abdolreza Abbassian, said: “Among major cereals, wheat will be the focus in the coming weeks as demand need to be tested against fast rising prices.”

The FAO Vegetable Oil Price Index went up by 1.7 percent during the month, which was about 60 per cent increase from September 2020 as international palm oil prices reached 10-year highs due to robust global import demand and concerns over migrant labour shortages impacting production in Malaysia while World rapeseed oil prices also appreciated markedly but soy and sunflower oil quotations declined.

Similarly, the FAO Dairy Price Index increased by 1.5 percent from August, as solid global import demand and seasonal factors in Europe and Oceania drove up international quotations for all dairy products, especially butter.

The FAO Sugar Price Index was 0.5 percent higher from the previous month – and 53.5 percent from a year earlier – underpinned by adverse weather conditions and higher ethanol prices in Brazil, the world’s largest sugar exporter. But slowing global import demand and good production prospects in India and Thailand curbed the upward pressure.

Remarkably, the FAO Meat Price Index was virtually unchanged in September from the previous month and up 26.3 percent on an annualized basis, while Ovine and bovine meat quotations rose due to tight supply conditions, while those for poultry and pig meat declined amid ample global supply volumes of the former and lower demand for the latter in China and Europe.

Highlights of the latest report released by FAO showed that record cereal output in 2021 still below consumption needs.
Meanwhile, the National President, Oil Palm Producers, Processors and Marketers of Nigeria, Mr. Alphonsus Inyang, told THISDAY that the country producing less than 50 per cent of what it consume and spent $550 million to import oil palm every year.

He decried the negligence of several governments to establish oil palm estates across the country, while those developed by the government have been privatised.

He maintained the need for governments to focus on palm, “you plant one palm you harvest for 50 years, is that not sustainable enough? So we are pleading with the government to plug in money into the development and empowerment of rural smallholders palm oil farmers to do one hectare, two hectares to develop the sector.”

SOURCE: THISDAY

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