A UN agency says prices for staple food grains, such as wheat or rice, “appear stable for at least another season” as a result of its forecast of large crops, ample stockpiles and relatively sluggish demand in the months ahead. In its first forecast of 2016 crops, the Food and Agriculture Organization estimated a harvest of 2.521 billion tonnes, the third-largest crop on record and a scant 0.2 percent smaller than 2015. FAO said wheat production would decline this year while corn and rice expanded slightly.
The FAO forecast was the second this week to point to a small decline in grain production worldwide this year, compared to 2015. The International Grains Council estimates grain output to drop by 2 percent. Like FAO, it expects a smaller wheat crop and larger corn and rice crops. Both organizations foresee ample supplies at the end of the 2016/17 marketing year equal to 23 percent of annual use. FAO said the stocks-to-use figure would be “down from almost 25 percent in 2015/16 but above the historical low of 20.5 percent registered in 2007/08,” when high demand and poorer-than-expected harvests caused food prices to spike.
The FAO Food Price Index rose by 1 percent during March due to rising sugar and vegetable oil prices. Dairy prices fell by 8.2 percent during the month to their lowest level since June 2009, “led by plummeting butter and cheese prices.” Grain and meat prices were nearly unchanged.