ROME — Food commodity prices are likely to stay high and volatile in the near future, and a repeat of price spikes in 2007 and 2008 is a possibility, the U.N. Food and Agriculture Organization said in a report discussed at a forum in Rome.
Prices have fallen back since highs in mid-2008, but they remain high and are not likely to go below levels in 2006. Droughts, volatile energy prices, the instability of the U.S. dollar and market speculation all threaten to push prices up again.
The F.A.O. said while overall demand growth is forecast to slow further globally, demand for income-sensitive products will grow faster. The F.A.O. also said the world needs to produce 70% more food by 2050 and invest $83 billion a year to feed a growing world population that will exceed 9 billion by that time.
Grain and oilseed futures prices in Chicago soared on Monday, due mostly to wintry weather across the Midwest causing harvest delays. But wheat futures prices still were about 15% lower than this time last year and were about 60% below the highs set at midyear 2008. Corn futures prices were about 7% below year-ago levels and were about 50% under last year’s highs. Although soybean futures prices today were about 8% above year-ago values, they still were 40% under last year’s highs.
On Oct. 9 the U.S.D.A. forecast a record large U.S. soybean crop in 2009 with prices paid to farmers expected to range between $8 and $10 a bus in 2009-10 compared with $9.97 in 2008-09 and $10.10 in 2007-08. The U.S.D.A. forecast the second largest U.S. corn crop on record, with prices paid to farmers expected to average in a range from $email@example.com a bu in 2009-10 compared with $4.06 in 2008-09 and $4.20 in 2007-08. The U.S. wheat crop was forecast down 11% from last year, with U.S. the average farm price projected to range from $firstname.lastname@example.org a bu compared with $6.78 in 2008-09 and $6.48 in 2007-08.
Globally, the U.S.D.A. forecast smaller wheat and rice crops but larger corn and soybean crops for the current 2009-10 marketing year. Global 2009-10 wheat production was projected by the U.S.D.A. at 668.12 million tonnes, down 14.2 million tonnes from record large outturn of 682.32 million tonnes in 2008-09. World wheat ending stocks were projected at 186.73 million tonnes in 2009-10, up 19.97 million tonnes, or 12%, from 166.76 million tonnes in 2008-09. World corn production in 2009-10 was projected at 792.54 million tonnes, up 1.26 million tonnes from 791.28 million tonnes in 2008-09. Global corn ending stocks were projected at 136.25 million tonnes for 2009-10, down 10.59 million tonnes, or 7%, from 146.84 million tonnes in 2008-09. Global soybean production was projected at 246.07 million tonnes, up 35.43 million tonnes, or 17%, from 210.64 million tonnes in 2008-09. Ending stocks were projected at 54.79 million tonnes in 2009-10, up 12.74 million tonnes, or 30%, from 42.05 million tonnes the previous year. World rice production was projected at 433.65 million tonnes, down 12.02 million tonnes, or 3%, from 445.67 million tonnes in 2008-09. Ending stocks were projected at 85.90 million tonnes, down 4.81 million tonnes, or 5%, from 90.71 million tonnes in 2008-09.
Prices for cocoa and sugar were currently at multi-year highs, but dairy product prices, like grains and oilseeds, were well off record highs set the past couple of years.