FAO Food Price Index remains unchanged in JanuaryListen /
The FAO Food Price Index held steady at 210 points in January 2013 after three straight months of decline.
FAO says increases in oil and fats prices offset lower cereals and sugar quotations, while dairy and meat values remained substantially unchanged.
The pause in the Index’s decline tallies with a significant upward revision in FAO’s latest forecast for 2012 world cereal production.
FAO’s monthly Cereals Supply and Demand Brief noted that the revision mostly reflects adjustments to maize production estimates in China, North America and the European Commonwealth of Independent States countries. But even at the new level, global cereal output would still be 2 percent down on the 2011 record crop.
According to FAO, early prospects for 2013 cereal production point to increased world wheat output. It says contributing largely to this prospect is an estimated 4 to 5 percent increase in the area under wheat in the European Union, where weather conditions have also been generally favourable so far.
But the UN food agency says in the United States, the outlook is less favourable. Despite an estimated 1 percent increase in winter wheat plantings and prospects for spring wheat areas to expand, severe drought conditions continue to plague the southern Plains, where the condition of crops is reported to be very poor.
FAO Senior Grains Economist Abdolreza Abbassian.says that “Given the tight supply situation, weather remains an important determinant of prices. For several cereals, production needs to increase significantly this year in order to avoid unexpected price surges".
Donn Bobb, United Nations.