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Rising Food Prices Hitting Nigerians Hard amid FAO’s Latest  Food Price Index

Photo Credit: Food-Agriculture-Organization

With unabating security challenges in Nigeria, skyrocketing food prices is combining to put many homes across the country at risk.

Prices of essential food items are getting out of the reach of most Nigerians, and the government does not seem to have any immediate solution.

The way things are, ravaging hunger is likely to compound the security situation in Nigeria under President Muhammadu Buhari’s watch.

Nigeria is however, not alone in the zooming food prices. International food commodity prices rose for the 11th consecutive month in April, with sugar leading the increase and cereals resuming their upward trend, the Food and Agriculture Organisation (FAO) reported on Thursday.

The FAO Food Price Index averaged 120.9 points in April, 1.7 percent higher than March and 30.8 percent higher than its level in the same month last year.

The index, which tracks monthly changes in the international prices of commonly-traded food commodities, reached its highest level since May 2014, and in nominal terms is 12 percent below its all-time peak in February 2011.

The FAO Sugar Price Index increased 3.9 percent during the month to reach levels nearly 60 percent higher than in April 2020, with concerns over slow harvest progress in Brazil and frost damage in France heightening concerns over tighter global supplies.

The FAO Vegetable Oil Price Index rose 1.8 percent in April as international palm oil quotations rose on concerns that production growth in major exporting countries would be slower than expected. Soy and rapeseed oil values also climbed further, while sunflower oil prices contracted moderately.

The FAO Meat Price Index rose 1.7 percent from its March value, with bovine, ovine and pig meat quotations underpinned by solid demand from East Asia. Poultry meat prices remained steady, reflecting generally balanced global markets.

The FAO Cereal Price index rose 1.2 percent in April, reversing a short-lived drop in March to stand 26 percent above its April 2020 level. Maize prices rose 5.7 percent –  to reach a level 66.7 percent higher than a year earlier – driven by smaller-than-anticipated planting intentions in the United States of America as well as concerns about crop conditions in Argentina, Brazil and the US.

International wheat prices were generally steady, while quotations for rice, barley and sorghum softened.

The FAO Dairy Price Index increased 1.2 percent from March, with quotations for butter, cheese and skim milk powder rising due to solid import demand from Asia.

FAO also published a set of updated forecasts in the new Cereals Supply and Demand Brief.

Global cereal production in 2020 is forecast at 2 767 million tonnes, a 2.1 percent increase from the previous year.

World cereal utilization for 2020/21 is pegged at 2 783 million tonnes, an increase of 2.7 percent, led by coarse grains, with the growth mostly reflecting greater-than-earlier-anticipated feed uses in China and the US.

FAO revised down its forecast for world cereal stocks by the close of the 2021 seasons to 805 million tonnes on likely drawdowns of maize inventories in China and the US, representing a 2.3 percent decline from their opening levels. The global cereals stock-to-use ratio is expected to stand at 28.3 percent, a seven-year low.

World trade in cereals in 2020/21 is forecast to reach 467 million tonnes, a year-on-year expansion of 5.9 percent, with growth foreseen as fastest for coarse grains, then rice and lastly wheat.

FAO also offered its first supply and demand outlook for wheat in the season ahead, 2021/22, forecasting production at 778.8 million tonnes, or 0.5 percent more than the 2020 estimate, buoyed by an anticipated 6 percent yearly increase in the European Union’s output.

Wheat utilization is predicted to increase by 0.9 percent to 770 million tonnes in the new season while the preliminary forecast foresees world wheat stocks growing 3.0 percent to reach a record level of 293 million tonnes by the close of seasons in 2022, led by inventory expansion in China even as stocks in the rest of Asia and Africa could reach their lowest levels since 2012/13.

Global wheat trade in 2020/21 (July/June) is forecast to contract by 1.8 percent year-on-year to 185 million tonnes, with expectations of reduced shipments from Australia, Canada, the Russian Federation and the U.S more than offsetting expanded exports from Argentina and the EU.

Early prospects for global coarse grains production in 2021 indicate a likely third consecutive year of growth, led by increased planted areas anticipated in Brazil, China, Ukraine and the US as well as recovering yields in the EU.

Sizeable production increases are also forecast in South Africa and neighboring countries.

 

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