The Food and Agriculture Organization of the United Nations (FAO) says its Food Price Index held steady at 210 points in January 2013 after three straight months of declining. Increases in oil and fats prices offset lower cereals and sugar quotations while dairy and meat values remained substantially unchanged.
Meanwhile, the FAO said it has raised its 2012 world cereal production forecast by 20 MMT to 2.302 MMT, which is still down 2% from the previous year. The revision mostly reflects adjustments to corn production estimates in China, North America and the European CIS countries.
Early prospects for 2013 cereal production point to increased world wheat output. Contributing largely to this prospect is an estimated 4% to 5% increase in the area under wheat in the European Union, where weather conditions have also been generally favorable so far. " But in the United States, the outlook is less favorable. Despite an estimated 1% 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," it notes.
FAO says world cereal stocks at the close of the crop seasons ending in 2013 are put at around 495 MMT, giving a global cereal stock-to-use ratio of 20.6T, down from 22 percent in 2011-12 but above the low of 18.7% in 2007-08.
World trade in cereals in 2012-13 is forecast to fall to 297.5 MMT, down 6% from the previous season but nearly 2 MMT higher than the December forecast. "Among the emerging features of the world grain market in 2013 is the resumption of large wheat exports from India of 6.5 MMT and record maize shipments from Brazil of 22 MMT easing the global grain supply/demand situation," says FAO.