Global food prices showed a slight decrease in November as production forecasts for corn and rice show that the staple grains were on course for record volumes.
The Food and Agriculture Organization, in the latest update of its Food Price Index, said November prices “marked a mild departure from a steady rise over the course of 2016.”
FAO’s index is trade-weighted and tracks international market prices for cereals, vegetable oils, dairy, meat and sugar.
The index recorded a steady rise in the first half of 2016, dipping slightly in July. From then, the index again ran a series of increase from August to October.
In November, the index averaged 171.3 points, down 0.4 percent or 1.3 points from the 172.6 points in October.
“The month-to-month small decline marked a departure from an almost uninterrupted rising trend in the index since the start of the year,” the FAO said.
“November’s easing was driven by a sharp dip in sugar prices, which more than offset a strong rebound in the prices of vegetable oils,” the UN agency added.
However, the November figure was still 10.4 percent or 7.3 points above the 164 points recorded in the same month of 2015.
The Cereal Price Index —which covers grains including rice—averaged 141.4 points in November, decreasing by 0.6 percent from October and 7.9 percent below the previous year’s level.
“The strengthening US dollar and ample supplies contributed to the generally weak tone lingering in cereal markets,” the FAO said.
“International rice prices remained close to multi-year lows reached in October, amid relentless pressure applied by new-crop arrivals and sluggish demand,” it said.
The FAO said the projection for world cereal production in 2016 was raised to 2.6 billion tons, an increase of 1.7 percent above the 2015 output mainly on account of forecast record output levels for rice and corn.
For rice alone, the FAO is expecting 498.5 million tons of milled grains produced in 2016.