FAO Warns of Volatile Food Prices Despite Wheat and Corn Surplus

MUMBAI, June 17 (Commoditiescontrol):The Food and Agriculture Organisation (FAO) of the United Nations has issued its bi-annual food outlook report on Friday, cautioning that robust wheat reserves and an all-time high corn production will not shield prices from the volatile effects of weather, geopolitics, and government policies. The report underscored that a projected dip in wheat production from record highs last year would likely be counterbalanced by persisting heavy stocks. Simultaneously, an escalation in corn production spurred by a substantial Brazilian yield would merge with static demand levels. Yet, the FAO pointed out that food price inflation remains a substantial concern as "global food production systems remain vulnerable to shocks stemming from extreme weather events, geopolitical tensions, policy changes, and developments in other markets." Collectively, even with the supplementary supply, these factors might upset the "delicate demand-supply balances," impacting prices and potentially threatening food security. The FAO predicts a minor decline in global wheat production as major producers such as Russia and Australia reduce output after last year's record-breaking yields. The total wheat production estimate for 2023 is 777 million metric tons (mt), a year-on-year decrease of 3%. Utilization is projected to stay consistent at 780 million mt, while overall stocks are likely to drop by a mere 0.7% from initial record levels, concluding at 308 million mt. Furthermore, the total coarse grain production—primarily composed of corn is expected to increase by 3% to 1.5 billion mt, with contributions from the US, Brazil, and the European Union. The US and Brazil are forecasted to experience a surge in corn demand, a trend likely to be echoed by China. Although a 3% production increase is anticipated, overall stocks are projected to swell by nearly 4% to 366.2 million mt as the international trade outlook experiences less remarkable growth. The FAO predicts a 1.4% increase in coarse grain trade, reaching 221.4 million mt. In conclusion, oilseeds are also set to see a boost in output and use, likely reducing stock levels. The FAO anticipates a 2.7% surge in production to 253.4 million mt, while utilization should rise by 3% to 252.4 million mt. These predictions are based on "expectations of rising food consumption, mainly in Asia, and higher uptakes from the biodiesel industry.
(By Commoditiescontrol Bureau; +91-9820130172)