FAO warns of food market volatility for production shortfall

FAO warns of food market volatility for production shortfall

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Weather conditions in various countries and political tensions in the Black Sea region have made food markets more volatile, FAO reports in the new Food Outlook. In its first major forecast for 2014, FAO puts cereal production at 2 458 million tonnes (including milled rice), down some 2.4 percent from the 2013 record, though global output is still expected to be the second largest ever. The decline is likely to be more pronounced for coarse grains. Still, inventory levels remain fairly good. Analysts say there is no cause for concern at this early stage before the main 2014/2015 seasons get underway, according to a FAO press release. Overall, world cereal stocks are expected to remain at relatively comfortable levels, according to the report, a biannual publication which provides information on the short-term market situation and outlook for major food stuffs. Lower pricing and El Niño weather conditions may keep world rice production lower in 2014, especially in Asia. In Thailand, a softening of producer prices could be the main factor leading to a contraction in rice planting and production. While production may be lower, international trade could expand to record levels in 2014, sustained by ample supplies in exporting countries and increased purchases by traditional importers like Bangladesh, Indonesia and the Philippines. The 2014 global food import bill could stabilize at US$ 1.29 trillion but animal product bills are set to increase, sustained by rising trade volumes and prices, the report says. – UNB

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