World Wheat Prices Fall Following April Surge

The United Nations Food and Agriculture Agency (FAO) said on Friday global wheat export prices had dipped after a surge in April, and were substantially lower than a year ago.

"After a sharp rise in international grain prices in 1995-96, wheat and maize prices have dropped by 30 and 40 per cent respectively from their peak monthly levels a year ago in May 1996," FAO said in its publication, Food Outlook.

The Rome-based agency said wheat export prices had fallen to $162 per tonne towards the end of May from $200 per tonne in April after earlier fears that 1997/8 supply would outweigh demand proved false.

 

Wheat output was forecast at 583 million tonne against 590 million tonne last season, and 547 million in 1995-96, a year when poor harvests

created an extremely tight supply situation, the report said. FAO also said it expected world cereal output in 1997/98 to yield 1,887 million tonne, up slightly from the forecast of 1,880 million tonne made in April's report.

FAO said the figures confirmed global cereal output was above trend for the second year in succession, and would meet consumption requirements in 1997-98.

The agency cautioned that despite optimism in the overall supply situation, food emergencies remained in 29 countries -- in the Great Lakes region of Africa, North Korea and Tajikistan.

FAO has forecast world sugar production for 1996-97 at 122.5 million tonne. This was lower than record levels last season but would allow for a supply surplus over demand and force prices down in the short term, the report said.