Food prices stable, low stocks pose risk of spikes



Reuters

Published — Friday 8 February 2013

Last update 8 February 2013 8:09 pm

| نسخة PDF Print News | A A

ROME: World food prices stabilized in January after falling in the previous three months, the UN food agency said, but it warned that adverse crop weather could cause violent price spikes due to tight grains stocks.
Global food prices surged in mid-2012 following the worst US drought in more than half a century and dry weather in other key grains exporters, raising fears of a food crisis similar to the one in 2008.
But prices eased in the last three months of 2012 due to expectations that large South American production will replenish tight global cereals supplies.
Brazil said it would produce a record 83.4 million tons of soybeans this season due to unprecedented expansion in area planted after a disappointing harvest last year, and also forecast a record corn crop.
The Food and Agriculture Organization (FAO) said its food price index, which measures monthly price changes for a basket of cereals, oilseeds, dairy, meat and sugar, averaged 210 points in January, unchanged from December.
The Rome-based agency raised its view of world cereal output in 2012 to 2.302 billion tons, up 20 million tons from its previous forecast, but still 2 percent lower than the bumper crop in 2011.
Its outlook for world cereal stocks by end of season in 2013 remained unchanged at 495 million tons, down 3 percent from their opening level.
“We should be expecting excellent crops in 2013,” said FAO senior economist Abdolreza Abbassian. “But the weather could turn negative, and because we are in a tight situation, prices could react violently and rise,” he said.
FAO expects wheat output to increase in 2013, due to a 4-5 percent increase in the winter wheat area in the EU and good weather. However the outlook is less favorable in the US due to dry conditions in some areas.
It said that prospects were also good for the maize crop in South America’s main producing countries.
An increase in production is crucial for markets, Abbassian said, because demand is also likely to rise as economies start to recover in 2013.
FAO raised its estimate for world cereal use in 2012/13 by 0.6 percent to 2.326 billion tons, up nearly 13 million tons from the 2011/12 season.
A weaker dollar is boosting demand for dollar-denominated commodities, Abbassian said, and rising oil prices will underpin food prices in coming months, he said. Higher energy prices increase transport costs which farmers pass on to consumers.
“There could eventually be some support from the energy prices and economic growth could lead to higher animal feed use,” he said.
In January, FAO said a rise in oils and fats prices was offset by falling cereals and sugar prices. Dairy and meat prices were roughly stable.
A separate report by G20 food market body, the Agricultural Market Information System (AMIS), noted that maize prices had started to pick up in mid-January on expectations of higher feed use and concerns about weather in South America.
The FAO’s index is below a peak of 238 points hit in February 2011, when high food prices helped drive the Arab Spring uprisings in the Middle East and North Africa.
In the summer of 2012, it began surging to levels close to those seen in 2008, when riots, some deadly, broke out in several poor countries.

What's happening around Saudi Arabia

TAIF: Makkah Gov. Prince Khaled Al-Faisal inaugurated state-of-the-art Radf public park in Taif which has an interactive fountain — the biggest of its kind in the Kingdom and spread over 13,000 sq meters. The fountain has colored lighting and a displ...
JEDDAH: The Special Criminal Court has issued a preliminary order in a case related to a Saudi national who fought with militant organizations in Syria. The court, functioning at its summer headquarters in Jeddah, sentenced him to a seven-year jail t...
RI YADH: The Kingdom has decided to increase the financial aid to Palestine by raising its monthly aid to the Palestinian Authority’s budget from $14 million to $20 million. The substantial increase brings Saudi Arabia’s yearly aid for Palestine to $...
JEDDAH: The Saudi Ambassador to Jordan has rejected terror charges against Saudis incarcerated in Iraqi jails and slammed the government of that country for concealing information on the inmates."The file of Saudi prisoners in Iraq has grabbed the at...
JEDDAH: Six female members of the Shoura Council participated in a training program to raise awareness among citizens on the municipal elections in which women will participate. The program was organized by Al-Nahda Philanthropic Society for Women un...
RIYADH: Custodian of the Two Holy Mosques King Salman has issued an order appointing and promoting 96 members at the Bureau of Investigation and Public Prosecution (BIPP) at various ranks.Sheikh Mohammed bin Fahd Al Abdullah, BIPP president, expresse...
DAMMAM: After the recent increase in verbal and physical harassment of women and girls in the Kingdom, they have turned to martial arts in order to protect themselves. Amani Yassin, a coach at Taekwondo Training Institute, said: “Saudi women are inte...
RIYADH: A youth has been arrested for allegedly killing a Saudi man near the Madinah airport recently. The police apprehended the alleged killer without incident. The suspect, a 24-year-old Saudi, is alleged to have stabbed the victim several times...
RIYADH: A total of 4,326 male and female students started their local and regional summer program for 2015 under the sponsorship of the King Abdul Aziz and his Companions Foundation for the Gifted and Creativity (Mawhiba) throughout the Kingdom on Su...
BURAIDAH: The security patrolling team in Qassim detained a woman for driving a car on the streets of Buraidah.Her case was referred to the higher-ups for necessary action.According to Maj. Badar Al-Sahibani, spokesman Qassim police, the woman is ide...
RIYADH: Recent statistics announced by the Saudi Commission for Health Specialties, which coincided with consensus surveys in the Kingdom for the year 2014, revealed that there is only one doctor for each 800 people, and one nurse for every 285 peopl...
Indian expats have paid glowing tributes to one of its most beloved presidents and iconic leaders on Tuesday, as condolences poured in from various parts of the Kingdom for A.P.J. Abdul Kalam following his sudden death on Monday.Hemant Kotalwar, char...
RIYADH: The National Center for Assessment in Higher Education (Qiyas) has announced the dates of tests for male and female students for the new academic year.Ibrahim Rasheed, director for public relations and communications, said the center has com...
RIYADH: The Ministries of Health and Education in cooperation with the Kingdom’s universities launched a program dubbed, “Education and Work,” in Riyadh on Tuesday to help Saudi youth find employment in the public and private sectors. A memorandum of...
JEDDAH: A senior Health Ministry official said butchers and cooks are more likely to be infected with the coronavirus because they handle and process camel meat.Dr. Abdul Aziz bin Saeed, undersecretary at the Ministry of Health for Public Health, sai...

Stay Connected

Facebook