"Food Outlook" report: "basic balance" will be maintained in the coming year

The latest Food Outlook report released by the United Nations Food and Agriculture Organization on October 6 pointed out that in view of the relatively low and stable prices of agricultural products with the largest international trading volume, the global food market will maintain a "basic balance" in the coming year.

According to the report, global grain production will increase by 25.69 trillion tons in 2016, an increase of 1.5 percent over the same period last year, enough to further increase existing stocks. At the same time, the total value of food imports in dollar terms is expected to fall 11% this year to US $1.168 trillion, and the decline in the cost of livestock products and cereals more than offset the increase in the cost of fish, fruits and vegetables, oil and sugar.

The report raised its forecast for global wheat production to 7.424 trillion tons, with the biggest increases in India, the United States and Russia, which are expected to overtake the European Union as the largest food exporter. At the same time, global rice production is expected to grow for the first time in three years, an increase of 1.3 per cent to an all-time high of 4.978 trillion tons, mainly due to abundant monsoon rains in Asia and larger production growth in Africa. Grain prices fell in anticipation of ample supply. CBOT wheat and corn futures have both fallen more than 16 per cent since the start of the year, while rice prices have fallen to their lowest level since early 2008.

The report also pointed out that due to record production in the United States, the output of oil crops such as soybeans is expected to hit a record high this year. As far as the livestock sector is concerned, overall supply and demand will also return to balance in 2016 after a long period of oversupply in the dairy market, but tight milk supply in the EU has triggered the biggest monthly increase in dairy prices in years. In addition, world meat production has stagnated this year, and international demand for pork and poultry, especially in East Asian markets, has continued to support prices. At the same time, global fishery production is expected to grow by 1.8 per cent to 1.74 trillion tons this year, and aquaculture production is expected to increase by 5 per cent, but wild fish catches will decrease by 0.9 per cent due to the impact of El Ni ñ o on Pacific sardines, anchovies and squid.

The United Nations Food and Agriculture Organization also released its Global Food Price Index, which said it averaged 170.9 points in September, up 2.9 per cent from August and 10 per cent from the same period last year. The rise was mainly due to a monthly increase of 13.8 per cent in the FAO dairy price index, partly due to a sharp rise in the price of butter, which has benefited EU exporters, whose dairy production is declining. The FAO Food Price Index, a trade-weighted index of the prices of the top five food commodities on the international market, is currently at its highest level since March 2015.