Wheat leads rise in global food commodity prices

Mazino Dicksom, Abuja

Major global food commodity prices rose by 1.4% in June, driven by a rise in wheat and meat prices.

This was revealed in the latest FAO Food Price Index for five major food commodities made public.

Also the latest Cereal Supply & Demand Brief showed that a huge rise in the price of wheat pushed the Cereal price index by 4.2%.

Wheat quotations increased the most, largely reflecting a surge in high-protein wheat values due to deteriorating crop conditions in the United States, while strong import demand exerted upward pressure on international rice prices.

Maize prices fell due to massive harvests recorded in South America.

Wheat Output for 2017 is expected to fall, compared to maize and rice. FAO revealed that global cereal production in 2017 will hit 2.5 million tonnes, a 0.6% drop from 2016.

On the other hand, world cereal stocks are expected to expand by 704 million tonnes.

Protein profits

Prices for meat and dairy products also rose, averaging 175.2 points in June, up 3.2 points (1.8 percent) from May, marking the sixth consecutive month of moderate price increases.

Limited export supplies in Oceania, coupled with strong buying interest, underpinned bovine and ovine meat prices in June, while solid import demand lent some support to pig meat prices.

By contrast, poultry quotations continued to be affected by concerns over the spread of Avian Influenza in Europe, Asia and Africa.

Oils slowdown 

Vegetable oil price index averaged 162.1 points in June, down 6.5 points (or 3.9 percent) from May, when prices experienced a short-lived rebound.

The slide in the index mainly reflects falling palm and soy oil values. International palm oil quotations dropped by a full 7 percent (marking a 10-month low), primarily because of good production prospects in Southeast Asia.

Soy oil values dropped as South American bumper harvests bolstered global availabilities, while forecasts point to a near-record global output in 2017/18. Rapeseed and sunflower oil values also dropped, contributing to the overall fall in the index.

Decline

Sugar Price Index averaged 197.3 points in June, down nearly 31 points (13.4 percent) from May and marking a 16-month low.

International sugar prices have fallen steadily since February, with the continued decline reflecting large export availabilities, in particular robust Brazilian supplies.

Weak import demand has exerted further downward pressure on quotations, especially as purchases by the world’s leading importer, China, have slowed following the imposition of high import tariffs.