In its semiannual Food Outlook, the UN Food and Agriculture Organization forecast large global grain, vegetable oil and meat supplies and said prices should hold steady or decline in the months ahead. However, food importing nations will pay higher shipping costs along with buying a larger volume of food, so they will spend 10 percent more this year than in 2016 on their imports.
The FAO said wheat prices will be “subdued” this year while vegetable oil prices “stabilize at their current relatively low level” and feed grains such as corn see lower export prices than last year. Rice prices are 2 percent higher than a year ago with a record 2017 crop expected. Wheat stocks could set a record in 2017/18 and feed grains stocks should increase due to large crops in South America, China and Canada.
The monthly Food Price Index by FAO, which tracks international market prices of five major commodity groups – cereals, oils, dairy, meat and sugar – rose by 2.2 percent in May to a reading of 172.2 points. The index has ranged from a low of 168.9 to a high of 175.5, a fairly narrow band of less than 7 points, since last September.
The Food Outlook indicates the major food commodities “appear well-supplied on a global level even if there may be regional or national divergences,” said an FAO statement.