São Paulo – The Food and Agriculture Organization of the United Nations (FAO) reported this Thursday (3rd) in Rome that the price of food commodities measured by the organization dropped again in November, after going up slightly in October. FAO’s price index, which measures the prices of five food groups, closed November with 156.7 points, or 1.6% below October’s level and 18% lower than November of last year.
The price index calculates monthly the cost of cereals, dairy, vegetal oils, meats and sugars. In comparison to October, the price of cereals fell 2.3%, vegetal oils dropped 3.1%, dairy dropped 2.9%, meats fell 1.6% and sugars went up 4.6%. The last group was the only one to go up because of smaller crops in South East Asia and delays in the sugar cane harvest in Brazil due to excess rainfall.
The organization also reported this Thursday that the estimation for the world grain production for this year was reviewed, with the new numbers now indicating 2.527 billion tons. This total is 1.3% less than in 2014 because China’s crop will be smaller than previously estimated.
FAO added that the consumption of cereals should grow 1%, a slower increase than in the last few years because the low price of oil reduces the demand for biofuels. The organization estimates that 2.529 billion tons of grains will be consumed, which will cause a “modest” reduction of current inventories.
“As a result, the upcoming marketing season should be generally comfortable [concerning prices] and world inventories by the close of the season in 2016 will only be slightly below their record opening levels”, said FAO. Even with this forecast, FAO warned that weather patterns associated with El Niño are expected to impact food production in 2016. The production of cereals in Asia, Africa and Oceania should be affected the most. Countries in Central America, the Caribbean and Asia already suffered the impact of El Niño.
*Translated by Sérgio Kakitani
