Food prices fall in November amid robust global inventories
Major food commodity prices fell in November, reversing about half their rise in the previous month, as the cost of internationally-traded staples, except for sugar, fell across the board.
The FAO Food Price Index averaged 156.7 points in November, a 1.6% decline from its revised October average and an 18% decline from its value last year.
The FAO Cereal Price Index fell 2.3%, with coarse grain prices falling even more due to favorable harvests in the U.S., the world's largest maize producer and exporter.
Vegetable oil prices fell 3.1% from October, aided by lower energy prices, and encouraging planting and production prospects for soy crops in South and North America.
FAO's Dairy Price Index also fell 2.9% amid thin volumes, suggesting that major importers have adequate stocks. Meat prices also fell, while sugar rose strongly for the third month in a row.
Production forecast lowered
FAO's Cereal Supply and Demand Brief, also released today, slightly trimmed its forecast for world cereal production in 2015, which is now 2.527 billion metric tons, or 1.3% below the previous year's record. A lower forecast for maize production in China was the main reason for this month's downward revision.
Global cereal utilization was projected to grow by 1% in 2015/16, slower than in previous years, partly due to lower oil prices curbing industrial demand for biofuel crops. At 2.529 billion metric tons, demand will only require a modest drawdown from the world's currently large reserves.
As a result, FAO noted the upcoming marketing season should be "generally comfortable", and that world inventories by the close of season in 2016 will only be slightly below their record opening levels.
However, abnormal weather patterns associated with El Niño were expected to adversely impact cereal production in parts of Africa, Asia and Oceania, while several countries in Central America and the Caribbean, as well as in Asia, have already been affected. Dry weather in northern India also cut local cereal production in the 2015 season.
Conflict and adverse weather affect food security
Some 33 countries, including 26 in Africa, are in need of external assistance for food, due to drought, flooding and the needs of persons displaced by civil conflicts, according to FAO's new Crop Prospects and Food Situation, released today.
Food insecurity has worsened due to conflict, notably in Syria and Yemen, but also in countries such as Niger, Cameroon, Chad and the Democratic Republic of Congo that have taken in refugees from neighboring countries.
The number of people in West Africa in a Phase 3 Crisis or above classification is forecast to rise from around 8 million people currently to more than 10.7 million between June and August 2016.
In East Africa, marked by a severe drought in Ethiopia as well as protracted conflicts, the number of people in need of humanitarian assistance is estimated at 17 million, 50%higher than a year ago.
The Southern Africa sub-region is also facing some strains as early seasonal dryness linked to El Niño is impacting cropping activities for 2016 cereal crops.
FAO expected the 2015 regional output of coarse grains in Africa to drop by 12% to 67 million metric tons. Global coarse grain production for the year was projected to decline by 2% to 1.3 billion metric tons.