On September 6, the Food and Agriculture Organization of the United Nations (FAO) released the global food price index for August. August 2024 averaged 120.7 points, a slight decrease from the revised index in July, with the sugar, meat and cereal price indices falling during the month, more than offsetting the impact of higher vegetable oil and dairy price indices. Compared to historical levels, the food price index fell by 1.1% in August compared to the same period of the previous year and by 24.7% from its all-time peak of 160.3 points in March 2022.
The FAO Cereal Price Index averaged 110.1 points in August, down 0.5 percent from the previous month and down 11.9 percent compared to August 2023.
The month-on-month decline in global wheat export prices reflects sluggish international demand and intense competition among exporters, particularly from the Black Sea. Meanwhile, higher-than-expected wheat production in Argentina and the United States also contributed to a softer price tone. In contrast, world maize prices strengthened slightly, mainly due to concerns about the impact of the heat wave on yields in parts of the European Union and United States. Corn prices were also supported by tighter domestic supplies and lower production forecasts in Ukraine. For other coarse grains, world barley prices declined and sorghum prices rose.
The FAO Rice Price Index rose 0.6 percent this month, reflecting an increase in rice quotations other than japonica due to seasonal tightening and the appreciation of the currencies of some exporting countries against the United States dollar.
The FAO Vegetable Oil Price Index averaged 136.0 points in August, up 0.8 percent month-on-month and the highest since January 2023.
The slight increase in the index for the month was mainly due to the fact that higher world palm oil prices more than offset the impact of lower soybean oil, sunflower oil and rapeseed oil quotations. International palm oil prices continued their upward momentum in the previous two months, while Indonesia's production increased seasonally but still did not reach its full potential, so global prices were firm. Conversely, international soybean oil prices fell this month on favourable prospects for global soybean production in 2024/25. Meanwhile, world sunflower and canola oil prices also fell after months of upward movement, mainly due to slowing global demand and pressure from the seasonal canola harvest in Canada.
Global cereal production in 2024 is expected to be on par with 2023,
Trade in cereals will contract
FAO's latest forecast for global cereal production in 2024 has been revised down by 2.8 million tonnes from July, mainly due to downward revisions to the outlook for coarse grains crops. Global cereal production in 2024 is now estimated at 2 851 million tonnes, roughly the same as in 2023.
The latest forecast for global coarse grains production in 2024 decreased by 7 million tonnes from the July forecast to 1 523 million tonnes, down 9.4 million tonnes (0.6 percent) from the 2023 level. The downward revisions to the September forecast mainly reflect the impact of hot and dry weather in the European Union, Mexico and Ukraine on yield prospects. The devastation caused by the war in Ukraine also continues to affect agricultural production. Canada and the European Union lowered their barley production forecasts due to above-average temperatures dampening yields, as well as damage to sorghum yield prospects in the United States and a corresponding downward revision of production forecasts. In contrast, United States corn production forecasts have been revised sharply upward this month due to favorable weather conditions for corn yields. Even so, corn production in 2024 is still expected to be lower than in 2023. FAO's latest forecast for world wheat production stands at 791.4 million tonnes, up 2.3 million tonnes from its July forecast and almost 3 million tonnes year-on-year. Much of the increase in this upward revision comes from the United States, where wheat production is expected to be higher than expected as the winter harvest draws to a close. Meanwhile, production forecasts for China (mainland) and Argentina have also been revised upwards slightly.
On the other hand, the European Union and Russia have lowered their wheat production forecasts, mainly due to excessive humidity and the latter due to persistent bad weather affecting yields. FAO revised the global rice production forecast upwards by 1.9 million tonnes from the July forecast, mainly due to an upward revision of historical production data by Bangladesh. However, higher-than-expected winter and spring harvests and strong summer and autumn planting progress also boosted Viet Nam's production prospects. This, combined with a number of other modest upward revisions, more than compensated for the slight downward revisions in harvest forecasts in places such as China and Indonesia. Taken together, FAO expects world rice production to reach 537 million tonnes in 2024/25, up 1.0 percent from 2023/24 and a record high.
World cereal utilization in 2024/25
The latest forecast is 2.852 billion tons, a slight increase of 0.2% year-on-year.
This is a downward revision of 4.7 million tonnes from the July forecast
Among them, the latest forecast for world coarse grains consumption in 2024/25 was revised down by 3.8 million tonnes this month to 1.526 billion tonnes, but still increased by 0.2 percent year-on-year. This month's downward revision is mainly due to lower feed use expectations for barley (mainly in Canada) and sorghum (mainly in Chinese mainland). The latest forecast for world wheat utilization in 2024/25 was also revised downward by 2.2 million tonnes this month to 793.3 million tonnes, mainly due to revisions to historical wheat consumption data by China (mainland). This latest forecast represents a decrease of 0.6% compared to the 2023/24 level. For rice, the latest forecast for world rice utilization in 2024/25 increased by 1.3 million tonnes to 532.9 million tonnes from July, reflecting warming supply expectations in Asia and adjusted global population data. Revised projections suggest that an accelerated increase in food intake will drive world rice consumption to a record high this season.
FAO will end the 2025 season on world cereals
The latest forecast for inventories has been revised down by 4.5 million tonnes from July,
to 890 million tonnes, but still 1.2% above the opening level
According to the latest forecasts, the global cereal stocks-to-use ratio in 2024/25 will remain virtually unchanged from the previous year at 30.7 percent, reflecting a continued strong supply outlook for the new season. The downward revision of world cereal stocks this month is mainly attributable to a downward revision of the 10.6 million tonnes forecast for global coarse grains stocks. The largest downward revision was in maize stocks, mainly due to poor production prospects in the European Union and Ukraine. At the same time, barley stocks have also been revised downwards (mainly in Canada and the European Union), as have sorghum stocks in China (mainland) and the United States. Despite this, global coarse grains stocks are still expected to increase by 1.2 percent from their opening levels. By contrast, the latest forecast for global wheat stocks has been revised upwards by 6.2 million tonnes and is now expected to remain at 314.4 million tonnes, virtually unchanged from the opening level. Among them, the historical revision of wheat consumption in China (mainland) led to an upward revision of wheat stocks by almost 7.7 million mt this month, while the United States raised its stock forecast due to a better outlook for wheat production. Global rice stocks at the end of MY 2024/25 are expected to peak at 204.8 million tonnes, virtually unchanged from July expectations.
Global trade in cereals in 2024/25
The latest forecast is 485.6 million tons,
4.5 million tons higher than July,
However, it is still 3.3% lower than the 2023/24 level
The latest forecast for world trade in coarse grains in 2024/25 (July/June) has been revised upwards by 2 million tonnes from July, mainly reflecting an upward revision to global maize trade volumes, including higher-than-expected sales due to higher production forecasts in the United States and higher demand in Mexico and Viet Nam. Even so, world trade in coarse grains in 2024/25 is forecast at 232.9 million tonnes, down 4.2 percent from 2023/24. The latest forecast for world wheat trade in 2024/25 (July/June) has also been revised upwards by 1.2 million tonnes this month to 199.4 million tonnes, reflecting increased shipments due to increased harvest expectations in Kazakhstan and United States, as well as higher purchases from the European Union. However, global wheat trade in 2024/25 is still expected to decline by 3.7 percent from the previous season. The latest forecast for global rice trade in 2024 (January-December) stands at 52 million tonnes, 900 000 tonnes higher than the July forecast, but still 1.5 percent below the 2023 level.
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Article source: Food and Agriculture Organization of the United Nations, China Grain Network
Editors of this issue: Zhai Yiting and Wei Rong
Review of this issue: Wang Meihong
Producer of this issue: Wu Junsheng
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