World Cereal Production to Hit Record High as Food Commodity Prices Decline

Gilbert Ekugbe

The latest Cereal Supply and Demand Brief of the Food and Agricultural Organisation (FAO) has predicted that the world cereal production would hit a record high in 2023 and 2024.

The report, which was posted in the FAO’s website, raised the 2023 global cereal production forecast to 2, 819 million tonnes, indicating a 1.1 per cent increase from the previous year.

The higher forecast reflected better prospects for global wheat production, now pegged at 783.3 million tonnes, which was buoyed by improved outlooks in several countries, including Canada, Kazakhstan and Turkey.  

Meanwhile, the FAO’s food price index stated that food commodity prices declined by 1.4 per cent, noting that the decrease was led by decline in the prices of major cereals and vegetable oils.

 The FAO Food Price Index tracks monthly changes in the international prices of commonly-traded food commodities.

The FAO added that Cereal Price Index declined 2.1 per cent from May while international coarse grain quotations in June decreased by 3.4 per cent, driven mostly by increased maize supplies from ongoing harvests in Argentina and Brazil and improved output prospects in key producing areas of the United States of America.

International wheat prices dropped by 1.3 percent, as harvests began in the Northern hemisphere, influenced by ample supplies and a lower export tax in the Russia, along with improved conditions in the U.S. International rice prices declined by 1.2 per cent amid subdued demand for non-Indica varieties and efforts by Pakistan to attract export sales.

The FAO Vegetable Oil Price Index declined by 2.4 percent from May, as lower world prices of palm and sunflower oils more than offset increases in quotations for soy and rapeseed oil, influenced by weather conditions in major growing regions.

The FAO’s Dairy Price Index declined by 0.8 per cent in June, led by lower international cheese prices, even as world butter prices rose, driven by active demand for spot supplies, mainly from the Middle East.

The FAO Sugar Price Index declined by 3.2 per cent, its first drop after four consecutive monthly increases, mainly triggered by good progress of the sugarcane harvest in Brazil and sluggish global import demand, particularly from China.

The FAO Meat Price Index was virtually unchanged in June, with poultry meat prices rising on the back of high import demand from East Asia amid ongoing supply challenges that were linked to the widespread avian influenza outbreaks.