“The past month was characterised by unseasonal weather in some major growing areas and by geopolitical tensions in the Black Sea region,” the Agricultural Market Information System (AIMS) said in its Market Monitor report.
“While these developments had little impact on supply and demand in the current season [from 2013 to 2014], they may affect crops to be harvested in the coming months, heightening the uncertainty surrounding markets in 2014 to 2015.”
AIMS’s findings were also included in the Food and Agriculture Organisation (FAO) March report.
According to FAO, unfavourable weather conditions particularly in Brazil and America had been primary influencers in the upshot of the index.
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The FAO Food Price Index measures the monthly change in international prices of a basket of food commodities. The index averaged 212.8 points in March this year, up 2.3 percent from February, and the highest level since May 2013.
The FAO Cereal Price Index was up by as much as 5.2 per cent to 205.8 points from February. Last month’s increased was spurred on from a surge in wheat and maize prices amid concerns of the continues dryness in the south-central United States on winter wheat crops, as well as bad weather conditions in certain parts of Brazil.
The FAO Vegetable Oil Price Index was up another 7 points from February to 204.8 points, now at the highest level in 18 months, and was spurred by the unfavourable conditions in Southeast Asia.
The FAO Dairy Price Index fell 6.9 points in March to 268.5 points due to a decline in purchases in China as well as uncertainty of the current trade climate in Russia.
The FAO Meat Price Index was up 2.7 points to 185 points as higher beef prices were associated with dry weather conditions affecting production in both Australia and the United States.
AIMS added that wheat production in particular is expected to decline this year but world supplies will continue to remain abundant.
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“Availabilities in 2014 are also anticipated to be ample in the rice and maize markets, sustained by higher production and large stocks,” said AIMS.
“As for soybeans, production prospects in Brazil have been scaled down following unfavourable weather, but global supplies still appear sufficient to meet the anticipated demand.”