International cereal quotations dip, vegetable oil prices rise, and record grains harvest is expected in the year ahead.

The benchmark for world food commodity prices were broadly stable in November, with lower international cereal quotations offset by higher prices of vegetable oils, the Food and Agriculture Organization of the United Nations (FAO) reported https://www.fao.org/worldfoodsituation/foodpricesindex/en/ Friday.

The FAO Food Price Index https://www.fao.org/worldfoodsituation/foodpricesindex/en/, which tracks monthly changes in the international prices of a set of globally-traded food commodities, averaged 120.4 points in November, unchanged from its level in the previous month and 10.7 percent lower than in November 2022.

The FAO Cereal Price Index decreased by 3.0 percent from October. International prices of coarse grains dropped by 5.6 percent, led by a sharp fall in maize prices, while those of wheat declined by 2.4 percent in November. The FAO All Rice Price Index https://www.fao.org/markets-and-trade/commodities/rice/fao-rice-price-update/en/ remained stable month-on-month amidst contrasting price movements across different origins and market segments.

The Vegetable Oil Price Index, meanwhile, increased by 3.4 percent from October. International palm oil prices rebounded by more than 6.0 percent in November, chiefly underpinned by more active purchases by leading importing countries and seasonally lower outputs in major producing countries. World sunflower oil prices rose moderately, while quotations for soyoil and rapeseed oils dropped slightly in November.

The FAO Dairy Price Index rose 2.2 percent from October, led by high import demand for butter and skim milk powder from Northeast Asian buyers, along with increased internal demand ahead of the winter holidays in Western Europe.

The FAO Sugar Price Index rose by 1.4 percent month on month, averaging in November as much as 41.1 percent higher than its level in the same month last year, influenced by heightened concerns over global export availabilities amid worsening production prospects in two leading exporting countries, Thailand and India, due to severe dry weather conditions associated with the El Niño event.

The FAO Meat Price Index dipped 0.4 percent from October, reflecting minor drops in the world prices of poultry, pig and bovine meats, driven mostly by ample exportable supplies.

Record cereal production

FAO raised its forecast for this season's harvests in a new Cereal Supply and Demand Brief https://www.fao.org/worldfoodsituation/csdb/en/, also released Friday. World cereal production in 2023 is now pegged at 2 823 million tonnes, up 0.9 percent from the previous year and 10.3 million tonnes above the previous record high reached in 2021.

Upward revisions were made for wheat output in the Russian Federation and Türkiye and for maize in the United States of America, while production forecasts were reduced somewhat for Argentina and Brazil. Meantime, the forecasts for maize production were trimmed for the European Union and Mexico. FAO also expects global rice production in 2023/24 to rise by 0.8 percent from the previous marketing season.

Looking ahead to the next season, planting of the 2024 winter wheat crop is ongoing in the northern hemisphere countries and, reflecting lower crop prices, area growth could be limited. Sowing of the 2024 coarse grain crops is ongoing in the southern hemisphere countries, with slower sowings in Brazil but a rebound in Argentina.

World cereal total utilization in 2023/24 is forecast at 2 813 million tonnes, 1.1 percent higher than in 2022/23.

World cereal stocks by the close of seasons in 2024 are predicted to rise by 2.7 percent above their opening level and mark a new record high. Based on the latest forecasts, the global cereal stock-to-use ratio would be 30.8 percent in 2023/24, indicating an overall comfortable supply level.

World trade in cereals in 2023/24 is forecast to contract slightly to 468.4 million tonnes, down 1.8 percent from the 2022/23 level.

More details available here<https://www.fao.org/worldfoodsituation/csdb/en/>.