Commodity markets are on the way to less volatility, according to the Food and Agriculture Organization's biannual Food Outlook Report, released Thursday.
A global look at food production and commodities, the report indicated that more export availabilities and higher stocks, driven by production increases, will result in lower prices and, down the road, less volatility.
The sharp increase in 2013 cereal production – expected to be about 8% overall – has grown from estimates made in just the last month. The report says higher volumes mostly reflect a recovery of maize crops in the United States and record wheat harvests in CIS countries. World rice production in 2013, on the other hand, is expected to grow only modestly.
Cereal utilization is expected to grow, too, with 2013-14 estimates at 2,418 million tonnes, 3.5% higher than in 2012-13. Wheat utilization comes in at 696.1 million tonnes, 1.4% higher than in 2012-13.
Global stocks are also anticipated to increase by 13% to 564 million tonnes, with coarse grains alone up by 30%, mostly in the United States. Wheat and rice stocks are also projected to rise, by 7% and 3% respectively.
Globally, an expansion in world cereal stocks could result in a stocks-to-use ratio reaching 23%, well above the historical low of 18.4% in 2007-08, the report says.
Report forecasts situation for other commodities
Sugar: World sugar production is forecast to increase only slightly in 2013-14, the report says. The rise is likely to be limited in Brazil, where unfavorable weather conditions have hampered harvesting operations. World sugar consumption is set to grow by about 2% in 2013-14.
Oilseeds: World oilcrop production could climb to an all-time high in 2013-14, supported by record soybean crops in South America. Global output of oilseed products should match world utilization for the second consecutive year, although a sizeable surplus is possible in the case of meals/cakes.
Meat: World meat production is anticipated to grow by 1.4% in 2013. Prices have remained at historically high levels since the beginning of 2011. There is no sign of overall price decreases, despite reduced feed costs.
Dairy: World milk production in 2013 is forecast to grow by 1.9%. Asia and Latin America and the Caribbean are expected to account for most of the increase, with only limited growth elsewhere. International dairy products prices have declined from their April peak, but still remain at historically high levels.
Fisheries: Aquaculture continues to boost overall fish supply, pushing quotations down from earlier levels. Fish consumption per capita keeps growing, with aquaculture in the process of overtaking capture fisheries as the main source of supply for direct human consumption.
Read the report here.