World food prices barely changed between February and March, according to the latest monitoring data by the UN Food and Agriculture Organisation. According to the FAO’s Food Price Index, which records the price of a range of staple foodstuffs, only the price of oils and maize increased.

According to FAO analysts, although maize prices rose due to low inventories, most cereals and grains fell in price or remained constant as supplies remained ample.

Contrary to trends in other foodstuffs, oil prices rose 2.5 per cent in March. The price rises were in response to forecasts for tight supplies this year on declining palm oil and rapeseed production and the reduced availability of soybeans

World poultry prices fell last month, although a slight rise in cattle meat meant prices remain at an all-time high. Pig and sheep meat prices remained constant. Reduced import demand and widespread availability led to price reductions and stagnations, though overall, meat prices in the first quarter of 2012 were 3.5 percent higher than last year. Dairy prices dropped 2.5 per cent.

Sugar prices remained unchanged from February, having fallen 8 per cent since March 2011, although volatility in the market persists, according to FAO analysts. Many major sugar exporters have increased output this year.

Cereal stocks expected to rise

The forecast for world cereal carryover stocks in 2012 has been raised by 1 million tonnes over the previous month to 519 million tonnes.  Much of the upward revision relates to expectations of higher rice inventories, according to the FAO.

At the current forecast level, the world cereal stocks-to-use ratio in 2011/12 reaches 22.1 percent, up slightly from 21.7 percent in 2010/11.  Among the major cereals, rice inventories are forecast to increase the most - by 11 million tonnes to 152 million tonnes, the highest level since 2000. Wheat stocks are also expected to rise sharply by 7 million tonnes to 196 million tonnes, the second highest level since 2003; however, coarse grains stocks could decline by nearly 3 million tonnes to 171 million tonnes, the lowest level since 2008.

The FAO's production forecast for wheat in 2012 remains at 690 million tonnes, 1.4 percent below the record in 2011 and unchanged from last month. In spite of this decline, world wheat supplies in 2012/13 would still exceed projected need because of large inventories, according to this month's report.

Rice markets also appear to be well supplied in 2012/13 given consecutive years of record production which have helped boost inventories. However, coarse grain supplies will be particularly tight in the coming months, especially for maize in the United States, the world's largest producer and exporter, as the US Department of Agriculture announced this week.

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