São Paulo – The Food and Agriculture Organization of the United Nations (FAO) disclosed on Thursday (3) that in October the global price of food dropped to the lowest level in 11 months. Among the reasons for the lower prices, measured monthly by the FAO, are global economic instability, the forecast that food supply should rise in 2011 and the lower international prices of sugar, oil, grain and dairy.
The FAO price index takes into consideration 55 products distributed in five food categories (grain, oil, meats, dairy and sugar). The index is calculated every month. Despite price reductions over the last 11 months, the “November FAO Index” shows that the food prices were 5% higher in October this year than in the same period last year, and stated that prices are still very volatile. Apart from that, the market in developing nations is still heated and demand is on the rise.
Another study disclosed by the FAO, the “Food Perspectives”, shows that the price of food may continue low in coming months, in theory, as 2011 should be a year of record grain production.
It is expected that this year the crop should total 2.325 billion tonnes of grain, 3.7% more than last year. Production of wheat should grow 6%, secondary grain (like sorghum) 2.6%, and rice, 3.4%. At the same time, global consumption should accompany the rhythm of growth of the world’s population and remain stable at 153 kilograms of grain per person per year.
Apart from the greater production of grain and the stability in consumption, the supply of sugar has risen and the price has dropped since July. The greater palm oil production and the record sunflower seed crop caused the price of oil drop in recent months.
According to the grain analyst at the FAO, Abdolreza Abbassian, however, even this greater production of food may not be enough to maintain the volatile food prices low due to financial market instability.
*Translated by Mark Ament
