MARKET DEVELOPMENT
Global Food Price Hike Will Not Impact Nigeria Negatively, Says FG
Global Food Price Hike Will Not Impact Nigeria Negatively, Says FG
11/03/2014 (THISDAY Live) - The federal government weekend stated that there was no cause for panic over the recent significant rise in the price of food globally.
Weather-related events and increased demand came into play as the Food and Agriculture Organisation (FAO) Food Price Index registered its sharpest increase since mid-2012, averaging 208.1 points in February 2014. The new level is 5.2 points or 2.6 percent above a slightly revised index for January, but is still 2.1 percent lower than last year's corresponding figure.
The figures were released amid news reports of spikes in wheat and corn prices in response to recent developments in Ukraine, though the February increase in the Index may not be entirely attributed to those events.
Special Adviser to the Minister of Agriculture and Rural Development, Dr. Olukayode Oyeleye, said the improved performance of Nigeria's local agricultural production has helped to keep the country insulated against the price spikes now being seen around the world.
Oyeleye also noted that the country manages a very robust strategic food reserve, which serves as a buffer and helps to mitigate the impact of severe food shortage.
According to him, "we do not see this spike in the global market affecting our local food prices negatively because apart from rice, most of the other food stuff consumed in large quantities in the country are produced locally, and even imported rice is now being seriously displaced in the market by locally produced rice. So, we are not troubled by the food price hike, rather it portends some good for our local farmers, because it makes their agricultural produce more competitive in the global market."
The Index, based on the prices of a basket of internationally-traded food commodities, saw price upticks in all commodity groups, with the exception of meat, which fell marginally. The strongest increases since January have been seen in sugar (+6.2 percent) and oils (+4.9 percent), followed by cereals (+3.6 percent) and dairy (+2.9 percent).
"This month's increase follows a long period of declining food prices in general. But it's too early to say if this is a true reversal of the trend," said FAO Senior Economist, Concepción Calpe.
"The weather is probably a major force driving up prices for certain commodities like sugar or wheat, but brisk demand is also an important factor underpinning maize, dairy and oil prices" Calpe added.
The FAO Cereal Price Index averaged 195.8 points in February, up 6.8 points, or 3.6 percent, from the previous month. The price bounce reflected mainly concerns over wheat crops in the United States, a strong demand for coarse grains for both feed and biofuel and high Japonica rice prices. Still, cereal prices remain, overall, 18.8 percent below their levels in February last year.
Vegetable oils averaged 197.8 points in February, up 9.2 points (or 4.9 percent) from January, amid concerns over unfavourable weather in Southeast Asia and South America, and buoyant demand worldwide, including demand for palm oil from biodiesel producers.Dairy averaged 275.4 points in February, a rise of 7.7 points, or 2.9 percent, over January and meat averaged 182.6 points in February, only 0.5 points below the revised January level.
Following a three-month decline, sugar prices recovered in late February, prompted by concerns of crop damage from dry weather in Brazil and recent forecasts pointing to a potential drop of output in India. The FAO Sugar Price Index averaged 235.4 points in February, up 13.7 points, or 6.2 percent, from January.
FAO also released its Cereal Supply and Demand Brief, noting a favourable early outlook for wheat production in 2014. With some winter wheat crops already developing, FAO's first forecast for world wheat production in 2014 stands at 704 million tonnes. This would represent a drop of 1.7 percent from the 2013 record harvest, but it would still be the second largest crop ever.
With the bulk of the coarse grains and paddy crops yet to be planted, it was still too early for a preliminary forecast of global cereal output in 2014.
Preliminary prospects for cereal production in Low-Income Food-Deficit Countries are looking generally favourable for 2014, according to a new report, released by FAO's Global Information and Early Warning System (GIEWS).
Favourable 2014 crop prospects were expected to bring some improvement in a number of countries in Southern Africa, following previous low harvests. Tighter maize supplies and high food prices have been affecting access to food there, mostly among vulnerable population groups.
However, several countries continue to grapple with food insecurity under emergency conditions. They include the Syrian Arab Republic, with an estimated 6.3 million people facing severe food insecurity; Yemen, where 45 percent of the population is estimated to be food insecure; South Sudan, where 3.7 million people are estimated to be in need of emergency assistance; and, the Central African Republic, where crop production in 2013 declined sharply due to civil insecurity and nearly one-third of the rural population was estimated to be in need of food assistance.
In West Africa, the overall food security situation has remained stable following an above average 2013 cereal harvest, but over 20 million people are estimated to be in need of food assistance due to insecurity and reduced crops in parts of the Sahel.
Weather-related events and increased demand came into play as the Food and Agriculture Organisation (FAO) Food Price Index registered its sharpest increase since mid-2012, averaging 208.1 points in February 2014. The new level is 5.2 points or 2.6 percent above a slightly revised index for January, but is still 2.1 percent lower than last year's corresponding figure.
The figures were released amid news reports of spikes in wheat and corn prices in response to recent developments in Ukraine, though the February increase in the Index may not be entirely attributed to those events.
Special Adviser to the Minister of Agriculture and Rural Development, Dr. Olukayode Oyeleye, said the improved performance of Nigeria's local agricultural production has helped to keep the country insulated against the price spikes now being seen around the world.
Oyeleye also noted that the country manages a very robust strategic food reserve, which serves as a buffer and helps to mitigate the impact of severe food shortage.
According to him, "we do not see this spike in the global market affecting our local food prices negatively because apart from rice, most of the other food stuff consumed in large quantities in the country are produced locally, and even imported rice is now being seriously displaced in the market by locally produced rice. So, we are not troubled by the food price hike, rather it portends some good for our local farmers, because it makes their agricultural produce more competitive in the global market."
The Index, based on the prices of a basket of internationally-traded food commodities, saw price upticks in all commodity groups, with the exception of meat, which fell marginally. The strongest increases since January have been seen in sugar (+6.2 percent) and oils (+4.9 percent), followed by cereals (+3.6 percent) and dairy (+2.9 percent).
"This month's increase follows a long period of declining food prices in general. But it's too early to say if this is a true reversal of the trend," said FAO Senior Economist, Concepción Calpe.
"The weather is probably a major force driving up prices for certain commodities like sugar or wheat, but brisk demand is also an important factor underpinning maize, dairy and oil prices" Calpe added.
The FAO Cereal Price Index averaged 195.8 points in February, up 6.8 points, or 3.6 percent, from the previous month. The price bounce reflected mainly concerns over wheat crops in the United States, a strong demand for coarse grains for both feed and biofuel and high Japonica rice prices. Still, cereal prices remain, overall, 18.8 percent below their levels in February last year.
Vegetable oils averaged 197.8 points in February, up 9.2 points (or 4.9 percent) from January, amid concerns over unfavourable weather in Southeast Asia and South America, and buoyant demand worldwide, including demand for palm oil from biodiesel producers.Dairy averaged 275.4 points in February, a rise of 7.7 points, or 2.9 percent, over January and meat averaged 182.6 points in February, only 0.5 points below the revised January level.
Following a three-month decline, sugar prices recovered in late February, prompted by concerns of crop damage from dry weather in Brazil and recent forecasts pointing to a potential drop of output in India. The FAO Sugar Price Index averaged 235.4 points in February, up 13.7 points, or 6.2 percent, from January.
FAO also released its Cereal Supply and Demand Brief, noting a favourable early outlook for wheat production in 2014. With some winter wheat crops already developing, FAO's first forecast for world wheat production in 2014 stands at 704 million tonnes. This would represent a drop of 1.7 percent from the 2013 record harvest, but it would still be the second largest crop ever.
With the bulk of the coarse grains and paddy crops yet to be planted, it was still too early for a preliminary forecast of global cereal output in 2014.
Preliminary prospects for cereal production in Low-Income Food-Deficit Countries are looking generally favourable for 2014, according to a new report, released by FAO's Global Information and Early Warning System (GIEWS).
Favourable 2014 crop prospects were expected to bring some improvement in a number of countries in Southern Africa, following previous low harvests. Tighter maize supplies and high food prices have been affecting access to food there, mostly among vulnerable population groups.
However, several countries continue to grapple with food insecurity under emergency conditions. They include the Syrian Arab Republic, with an estimated 6.3 million people facing severe food insecurity; Yemen, where 45 percent of the population is estimated to be food insecure; South Sudan, where 3.7 million people are estimated to be in need of emergency assistance; and, the Central African Republic, where crop production in 2013 declined sharply due to civil insecurity and nearly one-third of the rural population was estimated to be in need of food assistance.
In West Africa, the overall food security situation has remained stable following an above average 2013 cereal harvest, but over 20 million people are estimated to be in need of food assistance due to insecurity and reduced crops in parts of the Sahel.