Thursday, February 3, 2011

FAO: Global Food Prices Rose 3.4 percent in January 2011

These are the key points from the FAO's monthly update which is reporting its January 2011 numbers for global food costs which it monitors in all nations:
  • The FAO Food Price Index further strengthened in January with price gains for all food commodities, except meat.
  • International prices of wheat and maize rose in January but those of rice decreased.
  • In Asia, domestic prices of rice continued to increase in several countries despite the decline in international prices.
  • In wheat importing countries of Asia, Latin America and Africa, prices of wheat products have stabilized at high levels.
  • In maize importing countries of Central America, prices of maize have started to rise.
  • In sub-Saharan Africa, prices of main staple coarse grains remain at generally low levels although they have started to seasonally increase in some countries.
The FAO Food Price Index (FFPI) rose for the seventh consecutive month, averaging 231 points in January 2011, up 3.4 percent from December 2010 and the highest (in both real and nominal terms) since the index has been backtracked in 1990. Prices of all the commodity groups monitored registered strong gains in January compared to December, except for meat, which remained unchanged.

The FAO Cereal Price Index averaged 245 points in January, up 3 percent from December and the highest since July 2008, but still 11 percent below its peak in April 2008. The FAO Oils/Fats Price Index rose by 5.6 percent to 278 points, nearing the June 2008 record level. The FAO Dairy Price Index averaged 221 points in January, up 6.2 percent from December, but still 17 percent below its peak in November 2007. The FAO Sugar Price Index averaged 420 points in January, up 5.4 percent from December. International sugar prices remain high, driven by tight global supplies. By contrast, the FAO Meat Price Index were steady at around 166 points.
  • International prices of wheat have risen some 4 percent in January compared to their December levels.
  • International prices of maize also increased 4 percent in January.
  • Export prices of rice declined some 4 percent in January following improved market availabilities from the main crop harvests in major producing Asian countries.

The next graph illustrates overall global food inflation over the past twenty-one years.

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I have singled out the next three graphs from the report as they demonstrate some of the more significant price rises.

We've all heard about the price of onions in India by now, and how important that is to the well-being of their society. The above graph illustrates why this has been in the news lately.
INDIA: Onion exports have been banned and import duties on onions have been removed. The surge in price followed unseasonal rains during the October-November harvesting season in the key growing states, which resulted in severe damage to the summer crop and supply shortages.

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Onions, potatoes, rice and wheat are items most problematic in some of the Asian nation's food inflation situations from the past year.
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Red beans, rice, and corn have risen most in price for some of the Latin American and Carribean nations over the past year.
Prices of red beans in Honduras and Nicaragua, after having declined in December with the harvest of the second “de postrera” season (the main season for beans), remained stable in January. However, prices are still nearly twice as high as at the same time last year due to reduced 2010 outputs.

Here is the [pdf] link to the report.