(By Balaseshan) The United Nations' Food and Agriculture Organization (FAO) said the global food prices dropped sharply in May, the lowest level since September 2011, but it expects world cereal supplies to be abundant in 2012/13.
The favourable supplies, growing global economic uncertainties and a strengthening of the US dollar has impacted the global food prices, FAO cited.
The FAO Food Price Index, measuring the monthly change in international prices of a basket of food commodities, fell by 4% in May. It averaged 204 points and was 9 points down from April.
On the other hand, FAO increased its world cereal production forecast by 48.5 million tonnes since May, mainly on the expectation of a bumper maize crop in the United States. FAO's latest forecast for world cereal production in 2012 stands at a record level of 2.419 billion tonnes, up 3.2% from the 2011 record.
Amid an early start of the planting season and prevailing favourable growing conditions, the bulk of production increase is anticipated to originate mainly from maize in the United States.
As a result, the global coarse grain production is forecast at 1.248 billion tonnes, up 85 million tonnes from the previous year. However, with planting still to be completed and much of the crop at very early stages of development, the final outcome will depend greatly on weather conditions in the coming months.
The forecast of global rice production in 2012 is firmer with the main northern hemisphere rice crops now in the ground in several countries, and points to a 2.2% increase from 2011, to some 490 million tonnes, mostly reflecting larger plantings in Asia.
For wheat, latest indications point to a contraction of about 3% in production in 2012, to 680 million tonnes, still well above the average of the past five years.
The global cereal utilization is forecast to expand by at least 2% in 2012/13, to 2.376 billion tonnes, with feed utilization growing by 3.8%, while food consumption is expected to increase by just over 1%, largely keeping pace with world population growth.