World food price crisis: 6% increase in July

According to FAO, global food prices have bounced back by 6% in July after several months of decline. This increase is mainly due to soaring prices for cereals and sugar: over 17% for cereals and 12% for sugar. The FAO food price index has rebounded significantly in July to 213 points vs. 201 in June.

The Rome-based institution said in a statement that the increase was mainly due to a jump in prices for cereals and sugar, and more moderate increases of oils and fats. International prices of meat and dairy products remained more or less unchanged. If this trend continues, the February 2011 peak of 238 points that started in July 2010 could be rapidly reached. It could be similar since in both cases, soaring grain prices were the original trigger.

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Russia wants to limit soybeans exports

The Russian government has decided to increase customs duties on soybeans, APK Inform reported. Currently set at 5%, with a minimum of 8.5 euros per tonne, they are raised from August 23rd to 20% with a minimum of 35 euros per tonne.

These tariffs apply to all countries except members of the Custom Union, Kazakhstan and Belarus.

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Candy-to-Fuel Demand Cuts Oil Inventory to Lowest Since 1975: Commodities

Stockpiles of the cooking oils used to make everything from candy bars to biofuels are declining to the lowest in two generations as farmers fail to keep up with demand expanding at five times the pace of the world population.

Inventories of soybean, rapeseed, sunflower and six other oils will drop to less than 29 days of consumption this year, the fewest since 1975, U.S. Department of Agriculture data show. Palm, the most-consumed oil, will rise 7 percent to 3,475 ringgit $1,103 a metric ton in Malaysian trading by the end of the first quarter, the highest since March, based on the median estimate of 12 analysts and traders surveyed by Bloomberg.

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Europe Grains Wilt as England Has Hottest April in 352 Years

Dry weather in France and Germany and England’s hottest April in at least 352 years is threatening crops across the European Union, producer of a fifth of the world’s wheat.

About 20 percent of average rain fell in the U.K. in April after a dry March, further reducing soil moisture, the Home-Grown Cereals Authority, an industry group, said in an e-mailed report. European wheat and rapeseed crops are “in jeopardy” after an “incredibly dry” April, according to agricultural weather forecaster Martell Crop Projections.

Dry, warm weather in Europe may reduce global wheat stockpiles already expected to fall 7.6 percent in the year that ends on May 31, the biggest decline since 2007. Food prices reached a record in February, driving 44 million people into poverty, and wheat consumption may rise to an all-time high this year. The world “cannot afford” for Europe’s crop to be diminished, Abdolreza Abbassian, a senior economist at the United Nations’ Food and Agriculture Organization, said last month.

via Europe Grains Wilt as England Has Hottest April in 352 Years (2) – Bloomberg.com.