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Global food commodity prices rose in August for the third consecutive month, owing to stiffer demands for commodities and a weaker United States Dollar (USD).
The Food and Agriculture Organisation of the United Nations (FAO) revealed this in its monthly Food Price Index released on Thursday.
The FAO Food Price Index (FFPI) measures, monitors, and tracks monthly changes in the international prices of commonly traded food commodities.
According to the release, the FFPI averaged 96.1 points in August, increasing by 2 percent from July.
This marks the third consecutive month-on-month increase in the value of the FFPI, with the index reaching its highest tally since February this year.
Due to increasing demands in African markets, international rice prices rose globally. This was also influenced by its tight seasonal availabilities.
The FAO said that Cereal Price Index rose by 1.9 percent from July, averaging 7.0 percent above its value in August 2019, with coarse grains leading the rise.
Maize prices, the report disclosed, also rose by 2.2 percent amid concerns that recent crop damages in the US would impact supply.
Although world cereal utilization for 2020/21 increased by 2 percent from last year, the global cereal stocks are projected to rise by 1.7 percent by the close of the 2021 seasons.
The FAO further explained that it lowered its forecast for world cereal production in 2020 by 25 million tonnes from a July projection, due to expectations of a lower maize output in the US.
It said, “However, despite this reduction, such an outcome would still represent an all-time high, amounting to 58 million tonnes above the 2019 output.
“Record maize harvests are forecast for Argentina and Brazil, while global sorghum production is expected to grow by 6 percent from the previous year.
“Worldwide rice production in 2020 is also expected to reach a new record of 509 million tonnes.”
The FAO also stated that Sugar Price Index rose by 6.7 percent from the previous month, reflecting reduced production prospects due to unfavorable weather in Europe and Thailand.
Vegetable Oil Price Index increased by 5.9 percent, led by firmer values for palm oil especially, but also soy, sunflower and rapeseed oils.
This, the FAO said, reflects prospective production slowdowns in leading palm oil-producing countries amid firm global import demand.
For dairy products, the FAO Dairy Price Index was unchanged from July, with cheese and whole milk powder quotations declining amid expectations of ample seasonal export availabilities in Oceania.
Butter prices rose due to tightening export availabilities in Europe, in the wake of the August heatwave reducing milk output.