Speaking of prices, FAO released its November Food Price Index today, which saw prices virtually unchanged from their October levels. At the new level of 215 points, the Index was 23 points, or 10 percent, below its peak in February 2011 but remained two points, or one percent, above its November 2010 level.
The prices of cereals, one of the main commodity groups included in the Food Price Index, dropped by 3 points or 1 percent from October.
Contributing to the downward pressure on cereal prices is the significant upward revision of the 2011/2012 global cereal supply estimate as a result of better crop prospects in some Asian countries and the Russian Federation, and larger than anticipated stocks in the latter. Other factors include deteriorating world economic prospects and a strong U.S. dollar.
These are among the highlights of the latest issue of FAO’s quarterly Crop Prospects and Food Situation report also published today. The report confirmed a record level of world cereal production of 2 323 million tonnes for 2011 – a 3.5 percent increase on 2010 production. FAO says that this should be sufficient to cover the expected increase in utilization in the coming year and also allow for a moderate replenishment of world reserves.
Read more on the report, including updates on the world’s food insecurity hot spots.
For more on the global price situation, watch this Bloomberg interview with FAO economist Abdolreza Abbassian.