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A sharp surge in price of dairy products pushed overall food cost one percentage point higher in March, UN reported Thursday, noting world wheat production remained on track to reach its second highest level ever barring adverse weather.
In its latest monthly Food Price Index (FPI), UN's Food and Agriculture Organization (FAO) said dairy component of the index, which carries a 17 percent weight in the overall calculations, jumped by 22 points to 225 - one of the largest recorded changes - due to Oceania's hot, dry weather that cut into production of milk and its various by-products.
Dairy prices used in FPI are based on exports of New Zealand, the world’s largest dairy exporter, accounting for about one-third of global trade. Export prices for dairy products also rose for other important exporters like European Union and the US but not to the same degree.
“The exceptional increase is in part a reflection of market uncertainty as buyers seek alternative sources of supply,” FPI noted. “In addition, dairy output in Europe has yet to come fully online after a particularly cold winter which has delayed pasture growth to feed dairy animals.”
On cereals, FAO’s latest Cereal Supply and Demand Brief reported an overall positive outlook with wheat crops already well advanced while plantings for rice and coarse grains are expected to increase in the coming months owing to attractive prices.
“World cereal production in 2013 could recover strongly barring unfavorable weather in major producing regions,” the report noted, maintaining its March outlook that global wheat production this year is expected to increase by four percent to 690 million tonnes, the second highest ever after the 700 million tonnes produced in 2011. FAO slightly revised the 2012 crop production estimate upward by nearly three million tonnes which now stands two percent lower than the record set in 2011.
Philippines News agency