World Food Prices Fall in January, Unlikely to Rally
World Economy

World Food Prices Fall in January, Unlikely to Rally

World food prices are unlikely to rise much from their four-year slump as long as high production, low oil prices and limited import demand continues, a senior economist for the United Nations food agency said.
The United Nations Food and Agriculture Organization’s (FAO) global food price index fell in January, continuing an almost uninterrupted decline since last April, Reuters reported.
“Supply keeps being revised up, and on the import demand side, there really isn’t much activity simply because many importing countries themselves have very good supply,” said FAO economist Abdolreza Abbassian.
FAO’s forecast for world cereal production in 2014 hit a new record high of 2.534 billion tons in January, marginally above its December estimate.
The lower oil price could favor production, Abbassian said, as farmers can still make a decent margin on their produce thanks to lower input costs.
“The (oil price) decline keeps agriculture healthy ... At a time of surplus, increased production could even mean further downward pressure on prices, in the absence of a major drought or catastrophe,” Abbassian said, adding that food prices could simply stabilize instead.

 Price Difference
Cheaper crude oil also knocked FAO’s vegetable oil index to its lowest level since October 2009 in January by eroding the price difference between the two for use as biodiesel feedstock.
Overall food price declines and stability have not applied everywhere, Abbassian said. Currency fluctuations have affected trade patterns and prices in countries that have experienced higher currency volatility, “from India all the way to China”.
In the European Union, a weaker euro has given a fillip to exports. Its 28 member states together are one of the world’s biggest cereals producers. At the same time, import demand from China is shrinking, Abbassian said, contributing to surplus supplies of cereals.
 Outlook Favorable
The outlook for crops in 2015 is favorable, partly thanks to good weather conditions and more planting in North America and parts of the Middle East and North Africa, which outweighed decreases in Russia and parts of Far East Asia, FAO said.
Cereals stocks at the end of the 2014-15 season are now forecast to be 622.7 million tons, marginally lower than previously forecast.
The FAO index measures monthly price changes for a basket of cereals, oilseeds, dairy products, meat and sugar. It averaged 182.7 points in January, 3.6 points below its revised reading for December.

Short URL : http://goo.gl/8lFk05

You can also read ...

Report says China’s economic development must rely on integration between innovation and industrial production,  and work must be done to ensure that innovation progress was passed on to production.
China's new economy will account for an estimated 12% of the...
The process of building a new government could take weeks, so markets may well move on from the result quickly.
Politics dominated trading on Monday, with the euro sliding as...
World countries are casting a shadow on the future of the global economic system.
Next month, when finance ministers and central bank governors...
The economy’s return to growth has eased pressure  on the authorities.
Now that Nigeria’s economy is recovering from its worst slump...
One mining services company said it laid off more than 50 employees.
New laws and a crackdown on mining firms in Tanzania has...
EU Seeks Protection for Uber-Style Jobs
The European Commission said on Monday it wants more social...
US to See Slower Growth
The pace of US economic growth will stay stuck in the low 2%...
The Housing Pulse rose again, as the shortage of supply and increasing demand for properties continues to bite.
Bank of Ireland’s monthly Economic Pulse report, which...