April 17, 2017

Of the five major food commodity groups being tracked by the UN's Food and Agriculture Organisation, meat was the only commodity whose price index rose in March-by 0.7% compared with the previous month. The upward movement was spurred by import demand from Asia for bovine and pig meats.

The FAO Food Price Index averaged nearly 171 points in March, a 2.8% drop from February while remaining 13.4% above its level a year earlier. 

The Cereal Price Index declined 1.8% from February, led down by wheat and corn. It is now roughly at par with the March 2016 level.

Buoyant milk supplies led to a 2.3% monthly decline in the FAO Dairy Price Index which, however, remained well above its year-ago level.

World cereal outlook

Other price indices that recorded declines in March were vegetable and sugar.

Meanwhile, FAO released its first world cereal supply and demand outlook for the year ahead, expecting grain inventories to remain at near-record levels.

It projects worldwide cereal production in 2017 to reach 2.597 billion tonnes, just 9 million tonnes short of the record set in 2016, according to the latest Cereal Supply and Demand report.

FAO's first forecasts for the season hinge on climate conditions in the coming months and on farmers' output price-sensitive decision on which crops to plant.-Rick Alberto