Food Outlook BIANNUAL REPORT on GLOBAL FOOD MARKETS
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Food Outlook BIANNUAL REPORT ON GLOBAL FOOD MARKETS November 2018 ACKNOWLEDGEMENTS The Food Outlook report is a product of the FAO Trade and Markets Division. This report is prepared under the overall guidance of Boubaker Ben-Belhassen, Director, and Abdolreza Abbassian, Senior Economist. The report benefited from research support by many staff, namely, David Bedford, Julie Claro, Erica Doro, Lavinia Lucarelli, Emanuele Marocco, Marco Milo, Shirley Mustafa, Di Yang and the fisheries statistical team. Special thanks go to David Bedford and Lavinia Lucarelli for preparing the charts and statistical tables and to Valentina Banti for her administrative support. Additionally, the team is grateful to Ettore Vecchione for the desktop publishing and to Claire Pedrick for her valuable editorial assistance. Required citation: FAO. 2018 Food Outlook - Biannual Report on Global Food Markets – November 2018. Rome. 104 pp. Licence: CC BY-NC-SA 3.0 IGO. 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FAO information products are available on the FAO website (www.fao.org/publications) and can be purchased through [email protected]. Requests for commercial use should be submitted via: www.fao.org/contact-us/ licence-request. Queries regarding rights and licensing should be submitted to: [email protected]. Photo credits: ©FAO/Pius Ekpei ©Depositphotos.com ©Pxhere.com Contents MARKETS AT A GLANCE 1-10 In this report Wheat ...............................................................................3 The outlook for global supplies of agricultural Coarse grains ....................................................................4 commodities in the 2018/19 marketing season Rice ....................................................................................5 remains broadly in line with earlier expectations. Oilcrops, oils and meals ...................................................6 While the weather had some impact on crop Sugar .................................................................................7 prospects, the overall production at global level Meat and meat products .................................................8 did not change significantly from the forecasts Milk and milk products ....................................................9 published in the July issue of Food Outlook. Fish and fishery products ...............................................10 Beyond weather-induced revisions, the latest FAO revisions take into consideration the mounting uncertainties regarding trade policies, as well as COMMODITY FOCUS 12-23 the changes in exchange rates and rising energy Cassava market developments and outlook .................13 prices. Since June 2018, the FAO Food Price Index has remained on a declining trend. This FEATURE ARTICLES 24-31 weakness in part reflects the escalation of Depressed international coffee prices: insights trade disputes, which particularly dampened into the nature of the price decline ............................. 25 US soybean prices. In addition, wide-ranging Developments in bananas and major tropical decelerations in demand growth, coupled fruits ............................................................................... 29 with generally adequate, if not abundant, supply levels, resulted in a much softer tone in international price quotations of most food MAJOR POLICY DEVELOPMENTS 32-49 commodities. As a consequence, FAO’s latest Grains ............................................................................. 33 forecast of the world food import bill for 2018 Rice ................................................................................. 38 has been revised down by USD 5 billion since Oilcrops .......................................................................... 42 July. Nevertheless, it would still represent a 3 Meat ............................................................................... 46 percent increase from 2017. Dairy ............................................................................... 48 This edition of Food Outlook includes less detailed market assessments of the commodities regularly covered by the report, but it provides STATISTICAL TABLES 50-87 a more in-depth analysis of developments in cassava markets. Furthermore, the report includes short articles on recent trends in the MARKET INDICATORS 88-100 markets of coffee and tropical fruits. The section Futures markets ............................................................. 89 on Market Indicators continues to provide the Ocean freight rates ....................................................... 93 latest assessments on futures markets, freight Food import bills ........................................................... 96 rates, food import bills, exchange rates and food The FAO price indices .................................................... 98 prices. Markets at a glance MARKETS AT A GLANCE 2 FOOD OUTLOOK NOVEMBER 2018 WHEAT Markets at a glance The global wheat supply and demand balance is forecast to tighten in 2018/19, as evidenced by firmer international WHEAT PRODUCTION, UTILIZATION AND prices compared to the previous season. The forecast STOCKS for global wheat production in 2018 has been revised downwards in recent months, and is now pegged at 727.9 million tonnes, 4.3 percent decline from the 2017 record million tonnes million tonnes level. The EU, the Russian Federation, China and Australia 840 280 account for much of the year-on-year contraction. They are also behind the recent lowering in the global production 730 235 outlook, while prospects improved in North and South America. Total wheat utilization is expected to increase only 620 190 marginally in 2018/19, with the global growth in wheat feed use affected by lower intakes in the Russian Federation and Ukraine, mostly due to reduced domestic supplies 510 145 and less attractive prices. However, global wheat use for food consumption is seen increasing by 1.0 percent, which 400 100 08/09 10/11 12/13 14/15 16/17 18/19 should result in a relatively stable average per caput level. f’cast With world production forecast to fall below Production (left axis) Utilization (left axis) overall utilization, global wheat inventories in 2019 are Stocks (right axis) anticipated to register a 4.5 percent decline from their record high opening level. The drawdown is expected to be concentrated among the major exporters, in particular WORLD WHEAT MARKET AT A GLANCE the Russian Federation, the EU and the US, more than offsetting significant buildups expected in China and, to a lesser extent, in India. Consequently, the ratio of major 2016/17 2017/18 2018/19 Change: estim. f’cast 2018/19 wheat exporters’ closing stocks to their total disappearance over (defined as domestic utilization plus exports) – a measure of July Nov 2017/18 global market availabilities – is set to fall to a five-year