New York – The UN says Palm Oil prices pushes global staple food commodities to rise in April.
According to the UN Food and Agriculture Organisation (FAO) on Thursday, the increase marks the third consecutive monthly increase after four years of decline.
April’s increase, it added, was driven by palm oil prices and in a minor key, cereals, while sugar prices tapered down after a strong increase in March.
The FAO Food Prices Index, averaged 151.8 points in April, and 0.7 per cent increase from March.
The organisation said that it is about 10 per cent below its level of a year ago and more than a third of its 2011 highs.
The gradual increase, it added, is far from even across the board.
It stated that the trade-weighted index tracks international market prices for five key commodity groups: major cereals, vegetable oils, dairy, meat and sugar.
Its decline over the past year, it added, reflects ample food supplies, a slowing global economy and a stronger U.S. dollar.
It said Vegetable oil prices rose 4.1 per cent, due largely to a grim 2016 production outlook for palm oil coupled with a growing worldwide demand.
Cereal prices, it added, rose 1.5 per cent on the month, due primarily to international maize quotations, themselves influenced by a weaker U.S. dollar and spill over from the oil seeds complex.
However, it said, rice prices declined marginally, while wheat markets posted limited gains amid expectations of large supplies in the new season for the crop.
It added that diary prices dropped 2.2 per cent as stocks of butter and cheese in major exporters continued to grow.
FAO said meat prices rose 0.8 per cent, pushed up by strengthening United States demand for Australian beef.
It said sugar prices, meanwhile, dropped 1.7 per cent in April after a dramatic 17 per cent increase the previous month.
It said while concerns about global sugar production remain, Brazil, by far the main exporter, has had its second-highest crop ever and the country’s use of sugarcane for ethanol is expected to decline.
Sugar and vegetable oils are the only sub-indexes currently at levels higher than those of April 2015.
The FAO raised its forecast for world cereal production in 2016 slightly to nearly 2,526 million tonnes, virtually the same as in 2015 and potentially on course to be the second-largest global harvest ever.
It said the 2016 wheat output forecast remains 16 million tonnes short of last year’s record.
Reports say FAO’s new production forecast for global coarse grains, including barley, maize, millet, oats, rye and sorghum, stands at 1,314 million tonnes, about one per cent below the 2015 output.
FAO left unchanged its worldwide rice production forecast at 495 million tonnes, about one per cent higher than the previous year.
With the full impact of the El Niño weather phenomenon, the situation will not be clear for a few more months. (NAN)