Abundant supplies and the strong dollar pulled down the FAO’s Food Price Index 1.6 percent in November. The UN agency said the index, which has trended downward since early 2014, was 18-percent lower than a year ago. Sugar prices rose for the third month in a row, up 4.6 percent in November, but the other components of the index – cereal grains, vegetable oils, dairy and meat – declined. The decline in November erased half of the uptick in the index in October, said FAO.
Vegetable oil prices posted the largest decline, down 3.1 percent, on higher palm oil production in Southeast Asia, a larger U.S. soybean crop, and improved conditions for the South American soybean crop. Compared to a year ago, meat prices are 23 percent lower, cereals and vegetable oils are 16 percent lower, dairy products are down 15 percent, and sugar is 10 percent lower despite its recent rise, said FAO.
Some 33 countries, including 26 in Africa, need food assistance due to drought, flooding and armed conflict, said FAO in its Crop Prospects and Food Situation report, issued quarterly. The number of people in need of humanitarian assistance in East Africa is up 50 percent, to 17 million, and in West Africa, 10.7 million people face food insecurity. Coarse grain production in Africa is forecast to drop 12 percent this year, said FAO. El Nino dryness “is impacting cropping activities for 2016 cereal crops” in southern Africa.
Worldwide, grain production this year is only 1.3 percent smaller than the 2014 record and nearly in balance with estimated consumption in the year ahead, said FAO’s Cereal Supply and Demand Brief. As a result, the stockpile of grain will be at mammoth levels. FAO said “the global cereal stock-to-use ratio is estimated at almost 25 percent, slightly less than the 2014/15 ratio of 25.6 percent”