FAO Food Price Index holds steady
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ROME, September 6, 2012 - The FAO Food Price Index averaged 213 points in August 2012, unchanged from July.
Presenting the Index at a press conference at FAO headquarters in Rome, Director-General José Graziano da Silva said “This is reassuring. Although we should remain vigilant, current prices do not justify talk of a world food crisis. But the international community can and should move to calm markets further,” he added.
The Food Price Index, a measure of the monthly change in international prices of a basket of food commodities, spiked six percent in July after three months of decline, according to the FAO's release. Although still high, the FAO Index currently stands 25 points below its peak of 238 points in February 2011 and 18 points below its August 2011 level.
Eric Munoz, policy advisor for Oxfam America said today's Food Price Index reveals that food prices remain near peak levels, “which will be felt by families around the world.”
“Today's FAO announcement comes a week after a World Bank report that the price of maize and soybeans peaked in July, two days after UN food agencies called for action, and a day after Oxfam released a report showing how extreme weather events like the US drought can cause prices to skyrocket,” Munoz said in his reaction.
"It's time for the G20 to get serious and call a meeting of its new Rapid Response Forum before the end of the month,” he said. “In the meantime, the Obama administration should take immediate action to wave the corn ethanol mandate.”
The new Index showed international prices of cereals and oils and fats changed little in August while sugar prices fell sharply and meat and dairy prices rose.
The FAO Cereal Price Index averaged 260 points in August, the same as in July, with some increases in wheat and rice offsetting a slight weakening in maize, the FAO reported.
“Deteriorating crop prospects for maize in the United States and wheat in the Russian Federation initially underpinned export quotations, but prices eased towards the end of the month following heavy rains in areas hardest hit by drought in the United States and the announcement that the Russian Federation would not impose export restrictions,” FAO stated.
FAO's latest forecast for world cereal production in 2012 stands at 2,295 million tonnes, down 2.2 percent, from the record in 2011. This forecast is 4 percent below the estimate in FAO's previous report in July.
World production of coarse grains, including maize, barley, sorghum, millet, rye and oats, is projected down 17 million tonnes in 2011. The anticipated fall mainly reflects a smaller maize crop, which is expected to decline to 864 million tonnes in 2012, 20 million tonnes less than in 2011.
FAO anticipates global wheat production to reach 663 million tonnes in 2012, down 15 million tonnes, from the previous forecast. Wheat output in the Russian Federation is forecast to decline by 29 percent compared to 2011, while the United States' wheat production is seen as increasing by 13.5 percent to an above-average level of 61.7 million tonnes.
The FAO Oils/Fats Price Index averaged 226 points in August, unchanged from July.
The FAO Meat Price Index averaged 170 points in August, up 4 points, or 2.2 percent, from July.
“All meat prices rose, but most of the momentum came from the grain-intensive pig and poultry sectors,” FAO noted. “The August price increase follows three consecutive months of declines.”
The FAO Dairy Price Index averaged 176 points in August, up 3 points, or 1.6 percent, from July, sustained by increases in the prices of skim milk powder, casein, butter and whole milk powder, while cheese prices remained stable.
The FAO Sugar Price Index averaged 297 points in August, down 27.7 points, or 8.5 percent, from July, and 97 points, or 25 percent, from August last year.
“This month's sharp fall in sugar prices reflects an improved production outlook amid more favourable weather conditions in Brazil, the world's largest sugar exporter, supportive of sugarcane harvests, and recovering monsoon rains in India,” FAO reported.
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