Global food prices seen flat in November

Global food prices were little changed in November after a rise the month before, but were down 4.4 per cent from a year earlier, the United Nations’ food agency said on Thursday, forecasting stable or declining prices in coming months.

The Food and Agriculture Organization’s (FAO) price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 206.3 points in November, a marginal decline from 206.6 in October.

A sharp decline in sugar prices last month nearly offset a rise in oils, FAO said.

“Barring any surprise shocks, I think we’ll see ample supplies and relatively stable demand which should keep prices around these levels or a bit lower over the next six months or so,” FAO senior economist Abdolreza Abbassian told Reuters by telephone.

Food prices surged during the summer of 2012 due to a major drought in the U.S. but prospects for a rebound in cereal production to record levels have weighed on prices this year.

In its twice-yearly Food Outlook report published last month, FAO said food markets were becoming more balanced and less price volatile than in recent years thanks to bigger supplies and a recovery in inventories.

On Thursday FAO said it expected world cereal stocks of 572 million tonnes at the end of the 2014 crop seasons, up 13.4 per cent from the year before.

It forecast 2013-14 world cereals output at 2.5 billion tonnes, up a marginal two million tonnes from its forecast in November, and increased its estimate for world wheat output in 2013-14 to 710.8 million tonnes from a November estimate of 708.5 million tonnes.

FAO’s food price index is around 14 per cent below a peak reached in February 2011, Abbassian said, with cereals down around 26 per cent and sugar 40 per cent below their 2011 highs. — Reuters

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