ROME — International food commodity prices increased 4.2% in June, the steepest monthly increase of the past four years, according to the United Nation’s Food and Agriculture Organization.
The F.A.O. Food Price Index, released on July 7, averaged 163.4 points in June and is now 1% below the level reached a year earlier. The June increase, which affected all commodity categories except vegetable oils, was the fifth consecutive monthly increase.
The price movement reflects the F.A.O.’s updating of its cereal supply and demand forecasts for the 2016-17 marketing season.
The F.A.O.’s Food Price Index is a trade-weighted index tracking international market prices for key traded food groups.
The F.A.O. Cereal Price Index rose 2.9% in the month and is now 3.9% below its level of June 2015. Maize prices drove the increase, primarily due to tightening spot export supplies from Brazil. Ample wheat supplies and reports of record yields in the United States held down wheat prices.
The F.A.O.’s Cereal Supply and Demand Brief, also released July 7, pointed to improved production prospects primarily for wheat.
Global wheat production now is pegged at 732 million tonnes, more than 1% higher than anticipated in June, mainly due to improved prospects in the E.U., Russia and the United States, as a result of better weather conditions.
The forecast for world maize production in 2016 was, however, cut down as prospects for the second crop in Brazil have dimmed and as reduced government support in China led to lower planting. Overall coarse grain production for this year now is expected to be 1.316 billion tonnes, approximately 0.6% lower than last month’s forecast.
World total cereal utilization in the 2016-17 marketing year, meanwhile, now is projected at 2.555 billion tonnes, 1.3% higher than the estimate for 2015-16.As a result, global cereal stocks by the end of the farming season in 2017 are expected to stand at 635 million tonnes, 1.5% below their opening level. The resulting world stocks-to-use ratio for cereals would stand at 24.2% in 2016-17, compared with the 2007-08 historical low of 20.5%.