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International food commodity prices shot up 4.2 per cent in June, the highest monthly increase in the last four years
The FAO Food Price Index averaged 163.4 points in June and is now one per cent below the level reached a year earlier. The June rise, which affected all commodity categories except vegetable oils, was the fifth consecutive monthly increase.
The FAO Cereal Price Index rose 2.9 per cent in the month and is now 3.9 per cent below its level of June 2015. Maize prices were mostly responsible, due to tightening spot export supplies from Brazil. Wheat values rose during the first half of the month, before reversing course subsequently on reports of record yields in the United States and better than expected harvests in the Black Sea region. The FAO Dairy Price Index rose 7.8 per cent from May, spurred by an uncertain outlook in Oceania and slower production growth in the European Union. Nonetheless, the index remained 14 per cent below its level from a year ago.
The FAO Meat Price Index rose 2.4 per cent from its revised May value, as average quotations for pork, beef and poultry all rose for the third consecutive month.
FAO's Cereal Supply and Demand Brief, also released this week, pointed to improve production prospects primarily for wheat. Global wheat production is now pegged at 732mn tonnes, more than one per cent higher than anticipated in June, mainly due to improved prospects in the EU, the Russian Federation and the US, as a result of better weather conditions.
The forecast for world maize production in 2016 was, however, cut down as prospects for the second crop in Brazil have dimmed and as reduced government support in China led to lower planting. Overall coarse grain production for this year is now expected to be around 0.6 per cent lower than last month's forecast.