The Food and Agriculture Organization’s Food Price Index held steady at 210 points in January after three straight months of decline.
Increases in oil and fats prices offset lower cereals and sugar quotations, while dairy and meat values remained basically unchanged.
The pause in the index’s decline tallies with a significant upward revision in the organization’s latest forecast for 2012 world cereal production. This is now estimated at 2,302 million metric tons — 20 million metric tons up on December 2012’s forecast. The change mostly reflects adjustments to maize production estimates in China, North America and the European CIS countries. But even at the new level, global cereal output would still be 2 percent down on the 2011 record crop.Early prospects for 2013 cereal production point to increased world wheat output. Contributing largely to this prospect is an estimated 4 to 5 percent increase in the area under wheat in the European Union, where weather conditions have also been generally favorable so far. But in the United States, the outlook is not as good. Despite an estimated 1 percent increase in winter wheat plantings and prospects for spring wheat areas to expand, severe drought conditions continue to plague the southern Plains, where the condition of crops is reported to be very poor.The organization’s Meat Price Index averaged 176 in January, down only marginally from December. Quotations of all meat categories were generally stable, although a slight weakening in poultry and pork prices was evident.