The prices of agricultural commodities rose in February, with the FAO (Food Price Index) averaging 167.5 points, an increase of 1.7% compared to January, driven in part by the strong rise in the prices of dairy products.

The FAO Index, an indicator of the monthly variations in the international prices of a basket of food products, is currently at the highest level since August 2018, but still almost 2.3% below its value in the same month last year.

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In February the cereal price index averaged almost 169 points, a marginal increase compared to January, mainly due to the more stable corn prices. 

The vegetable oil price index rose by 1.8%, reaching 133.5 points, marking the highest level since October 2018. The February increase is mainly due to higher palm oil, soy and sunflower. oil prices

The meat price index rose slightly, supported by higher prices for beef and pork. Yet, the dairy product price index rose by 5.6% from January, driven by strong demand for imports of skimmed milk powder, whole milk powder and cheese. Even an expected seasonal decline in butter production has helped to drive up prices.

The sugar price index has increased by 1.2% since January, largely due to concerns over production prospects in some of the major producing countries.

The world cereal market remains well supplied in 2018/19 despite lower production In the new FAO bulletin on the Cereal Offer and Demand, also published today, the FAO has lowered its estimates on the cereal production of 2018 to 2,609 million tons, a decline of 2.8 million tons since January. This latest revision is based almost entirely on a lower estimate for maize production in the United States and reinforces an overall decrease in world cereal production compared to last year.

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Forecasts on utilisation and global grain stocks in 2018/19 have also been reduced. However, the ratio of final stocks and internal use of cereals (stock-to-use ratio) in 2018/19, which fell from 30.5% in 2017/18 to 28.3% in 2018/19, still represents a relatively reassuring level.

FAO’s predictions for world cereal trade in 2018/19 have been reduced by 2 million tons since last month, bringing them to just over 413 tonnes. Among the main cereals, the forecast for world grain trade was the most reduced, around 800,000 tons, largely on a weaker rate of purchases by several Asian and South American countries.

First wheat crop forecast for 2019 While most of the winter wheat crop in the northern hemisphere is still in quiescence, FAO’s first forecast for world wheat production in 2019 is set at 757 million tonnes. If this figure is confirmed, this year’s production would be 4.0% higher than the level reached in 2018 but still below the record level recorded in 2017.