FAO: Global Wheat Prices rise for fourth consecutive month

The Food and Agriculture Organization of the United Nations (FAO) says global wheat prices rose for a fourth consecutive month in May, up by 5.6 percent to average 56.2 percent above the value in 2021.

According to the FAO Food Price Index (FPI) report, the increase was only 11 percent below the record high prices reached in March 2008.

According to the report, the steep increase in wheat prices was in response to an export ban announced by India amidst concerns over crop conditions in several leading exporting countries, as well as reduced production prospects in Ukraine because of the war.

Also, the report disclosed that international sorghum prices fell in May, declining by 3.1 percent, while spillover from the strength in wheat markets and concerns over crop conditions in the European Union boosted barley prices by 1.9 percent.

However, international rice prices increased for the fifth successive month in May.

In another development, the FAO revealed that the global trade in cereals in 2021/22 was estimated below the 2020/21 record level, owing to an expected fall in global maize trade and reflecting the impact of disruptions caused by the war in Ukraine.

The report read:

“Looking forward to the 2022/23 season, early prospects for cereal production in 2022 point to a likely decrease, which would mark the first decline in four years.

“Based on the conditions of crops already in the ground and planting intentions for those yet to be sown, world cereal output is forecast to fall to 2 784 million tonnes (including rice in milled equivalent), which is down 16 million tonnes from the record output estimated for 2021.

“Among the major cereals, the largest decline is foreseen for maize, followed by wheat and rice. By contrast, global outturns of barley and sorghum will likely increase in 2022, to represent a partial rebound from the reduced level for barley in 2021 and the highest production level of sorghum since 2016.

“World cereal utilization is also forecast to decline in 2022/23 by 0.1 percent from the estimated 2021/22 level, to 2 788 million tonnes.

“The predicted contraction, the first in twenty years, would mainly stem from expected declines in the feed use of wheat, coarse grains and rice, along with a smaller foreseen decrease in industrial uses, mainly of wheat and rice.

“By contrast, global food consumption of cereals is expected to increase, keeping pace with the continued rise in world population.”

Source: Agro Nigeria