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Outlook for global food markets improves

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(Globalpost/GlobalPost)

The overall outlook for supplies of basic food commodities to global markets has improved since poor wheat harvest and tight conditions a year ago,the UN's food agency said on Thursday.

The cereal supply-and-demand balance in the 2013-2014 season was expected to be "comfortable," the agency said, but it warned about the pace of imports of rice by China.

The agency said that it expected food commodity markets to be more balanced in 2013 to 2014, with rising prices on fish and meat forecast to offset lower prices for some commodities such as sugar.

The Rome-based Food and Agricultural Organisation (FAO) said in its biannual Food Outlook report that the "global food import bill is forecast to reach $1.09 trillion in 2013 -- 13 percent below the record of 2011 but close to the 2012 estimate."

World sugar production was estimated to reach a new record in 2012-2013, "one that will be more than sufficient to cover projected global consumption," it said.

"After a relatively tight situation in 2012-2013, characterised by reduced grain supplies and high prices, good production prospects and a likely replenishment in world stocks could pave the way for calmer markets and some easing of prices in the new season," it said.

The news was also positive for wheat, with record world production this year boosting supplies. Lower import demand was also likely to stabilise the market and keep prices down.

"The bulk of the recovery is forecast to be concentrated in some of the major producing countries that harvested poor crops in 2012, in particular in Europe and the Black Sea region," it said.

In terms of rice, the FAO said international prices had generally been stable in the first five months of 2013, but that market attention was now "focusing on future decisions regarding releases from public stocks in Thailand and on India's availabilities for export."

The agency said the pace of China's rice imports was also "becoming critical."

International prices for meat, dairy and fish were expected to rise, the report said.

"World meat production is anticipated to grow by only 1.4 percent in 2013, to 308.2 million tonnes. Meat prices remain at historically high levels which, as of May, have not shown signs of decreasing in spite of reduced feed costs," it said.

Meat prices have remained at historically high levels since the early part of 2011. Export prices on average this year rose marginally for poultry and pork, remained stable for beef, and fell for lamb.

Prices of dairy products "have risen in the face of limited export supplies", and while milk production continues to increase, especially in Asia, growth in the main exporting countries is expected to be limited.

In terms of fish, tight supply and higher feed costs for several key traded species such as salmon and shrimp are pushing international seafood prices higher.

However, "overall supply is still growing thanks to aquaculture, with strong local and regional demand sustaining production growth in the developing countries," the FAO said.

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http://www.globalpost.com/dispatch/news/afp/130613/outlook-global-food-markets-improves