Farmers Review Africa March/April 2020 Farmers Review Africa March - April 2020 digital ( | Page 6

NEWS
Global
T
he Food and Agriculture Organisation’s
(FAO) latest food price index has reflected a
decline in global food prices in February for
the first time in four months - averaging at 180.5
points, down by 1.0% from January but still 8.1%
higher than a year earlier. This is due to the sharp
fall in the export prices of vegetable oils, partly
driven by coronavirus (COVID-19) outbreak fears.
The price index tracks monthly changes in the
international prices of commonly-traded food
commodities.
The vegetable oil index declined 10.3% from
January, with international palm oil prices falling
by even more on account of higher-than-expected
output in Malaysia, a temporary drop in India’s
import demand and concerns over the spread of
COVID-19.
The cereal price index declined by 0.9 in February.
Wheat prices were lower, reflecting well-supplied
markets, while maize prices retreated as demand
from the livestock feed sector dipped amid
expectations of a weakening global economy. By
4 | March - April 2020
food prices drop
amid coronavirus
outbreak
contrast, international rice prices rose, buoyed by
strong demand from Far Eastern and East African
buyers. The meat price index was down by 2.0%
from January, influenced by reduced imports by
China impacted by delays in cargo handling in
ports. Drought-induced slaughter in New Zealand
exertedcccv further pressure on ovine meat
price quotations, while poultry meat prices were
affected by lower imports by Asia. cereal production to 2,719 million tonnes due to
higher maize outputs in West Africa and Ukraine.
The brief offers a preliminary forecast of
763 million tonnes for 2020 worldwide wheat
production - very close to the near-record level
of 2019 - and indicates that coarse grain output in
2020 will likely be strong in Argentina, Brazil and
South Africa.
The dairy price index rose 4.6%, led by surging
price quotations for cheese, partly linked to
reduced milk output in Australia. Milk powders, by
contrast, dipped as logistical bottlenecks slowed
purchases by China, the world’s largest milk
powder importer. World cereal utilisation in the 2019/20 cycle is now
forecast to reach a record level of 2,721 million
tonnes, driven by higher food, feed and industrial
usages. FAO raised its forecast for world cereal
stocks at the close of the 2020 seasons to nearly
866 million tonnes, resulting in the global cereals
stock-to-use ratio staying at a comfortable level
of 30.9%.
The sugar price index rose 4.5% amid prospects
of lower production in India as well as in Thailand,
combined with a strong global import demand.
World cereal production
estimates revised upwards
FAO also issued a new Cereal Supply and
Demand Brief, raising its estimates for 2019 world
FAO also forecasts world trade in cereals to
rise by 2.3% to 420 million tonnes in 2019/20,
the second-highest level on record, with wheat
shipments accounting for more than half of the
expected increase.