The FAO has her a prognostic revised upwards for wheat production. The World Food Organization points to favorable weather conditions in the northern hemisphere. However, a large increase in production is not expected due to the high costs.
In December, wheat production for 2021/22& was expected to reach 769,6 million tons. It is now estimated at 775,6 million tons. This is mainly due to better than expected yields in Argentina, Australia, Russia and Ukraine. Wheat production in 2020/21 was 776,1 million tons.
The wheat consumption forecast for 2021/22 has been revised downwards from 777 million tons to 775,8 million tons. In the US, wheat is used less as feed due to its high price. Adjusted wheat consumption is still 1,9% higher than in 2020/21. The closing stock of wheat is now estimated at 287,5 million tons, close to 2020/21 (287,9 million tons). Only the ratio is now lower: 36,6% of consumption, against 37,1% in 2020/21.
Food prices are rising worldwide
Food prices rose worldwide in January, according to the FAO Food Price Index. It averaged 135,7 points in January; 1,1% higher than in December. Quotations for all oils rose in January, partly due to price increases for crude oil. The price of beef has also risen to record highs.
The FAO Sugar Price Index was the only sub-index to fall by 3,1% in January. This was due to the favorable production outlook in India and Thailand and lower ethanol prices in Brazil. The FAO Cereal Price Index rose slightly in January, by 0,1%, compared to December. World wheat prices fell by 3,1% as a result of large harvests in Australia and Argentina. Lower harvests and steady purchases by Asian buyers led to a monthly increase in international rice prices of 3,1%.
Tight dairy market
The FAO Dairy Price Index rose by 2,4%. The fastest increases were recorded for skimmed milk powder and butter. Reduced export availability from Western Europe and low expectations for milk production in Oceania contributed to a tight global dairy market. The dairy sector is also struggling with logistics delays and labor shortages due to the corona pandemic. The FAO meat price index also rose slightly in January. World beef prices hit a new peak as global import demand outweighed export stocks. Pork quotes rose slightly, partly due to rising input costs dampening global supply.
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