By Muhammed Ali Gurtas
ANKARA (AA) – Global agricultural food commodity prices fell in September due to growing inventories of key staples, the UN food body announced Thursday.
"The FAO Food Price Index [FFPI] declined 1.4 percent from August and is now 7.4 percent below its level during September 2017," the UN Food and Agriculture Organization (FAO) said in a statement.
The FFPI averaged 165.4 points last month, down 2.3 points from August and 13.2 points on a yearly basis, the statement read.
"Only the sugar price index firmed in September, whereas the values of the other sub-indices, led by cereals, dropped from the previous month," it added.
The FFPI is calculated by the average of five commodity group price indices — meat, dairy, cereal, vegetable oil, and sugar.
The organization said that the FAO Cereal Price Index showed a monthly decrease of 2.8 percent in September, "led by maize as expectations of a very large crop in the U.S. pushed export quotations down".
"International prices of rice and wheat also fell during the month, the latter due primarily to ongoing strong sales and shipments from Russia," it stated.
Reaching a three-year low, the FAO Vegetable Oil Price Index averaged 134.9 points in September, down 3.2 points, or 2.3 percent, from August.
"Prices weakened across the vegetable oil sector, with palm oil registering the most notable decline.
"Large inventories held in major exporting countries continued to weigh on palm oil values, which recorded a 25 percent drop compared to the corresponding month of last year," it said.
Continuing its downward trend, FAO said the dairy prices declined 2.4 percent last month, while the FAO Meat Price Index slipped marginally — 0.1 point — from its revised value for August.
In September, the sugar prices recorded a 2.6 percent hike month-on-month, standing 21 percent below compared with a year ago, "as ongoing harvesting operations in Brazil, the world's largest producer and exporter, point to drought conditions having had a negative impact on sugarcane yields", according to the UN body.
"Sub-par monsoon rainfall in India and Indonesia also provided upward support to international sugar prices," FAO said.
– Global cereal production forecast up
The organization said it raised global cereal production forecast to 2,591 million tons in 2018, still 2.4 percent below the record high of 2017.
"Reduced rainfall in Australia and Canada are expected to lower wheat yields, which, however, should be offset by higher outputs in Algeria and Russia.
"U.S. maize production is expected to reach its second highest level on record, more than offsetting downward revisions made for Russia," FAO said.
Surpassing all-time high in 2017, global rice production is expected to increase by 1.3 percent — prompted by Asian plantings larger than expected, notably in India.
In the 2018/19 season, the UN body expects the world cereal utilization to rise to 2,647 million tons, while global trade in cereals is expected to approach 417 million tons.
"International trade volumes of wheat and rice are expected to decline, while those for maize to increase," FAO added.
"World cereal stocks by the close of seasons in 2019 are forecast at 751.3 million tons, about 7 percent below their record-high opening level, with significant drawdowns of wheat inventories expected in the EU and Russia."