World Food Price Index Remains Stable in November

World Food Price Index Remains Stable in November
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World Food Price Index Remains Stable in November

World Food Price Index Remains Stable in November

The United Nations food agency's global price index remained stable in November amid decline in international prices of cereals, meat and dairy products driven by the agreement to prolong a UN-backed grain export channel from Ukraine.

The Food and Agriculture Organization (FAO) price index, which tracks the most globally traded food commodities, averaged 135.7 points in November, down from 135.9 for October, the agency said on Friday.

It pointed out that the figures published mark an eighth straight monthly fall since a record high in March after Russia’s invasion of Ukraine.

Lower readings for cereals, meat and dairy products in November offset higher prices for vegetable oils and sugar, the FAO said.

The slight decrease in November meant that the FAO food index is now only 0.3% above its level a year earlier, the agency added.

Last month's agreement to prolong a UN-backed grain export channel from Ukraine for another 120 days has tempered worries about war disruption to massive Black Sea trade.

The FAO Cereal Price Index declined by 1.3% from the previous month, but it was still up 6.3% from its value a year ago.

World wheat and maize prices declined in November by 2.8% and 1.7%, respectively, partly influenced by the extension of the Black Sea Grain Initiative.

The FAO Vegetable Oil Price Index increased by 2.3% in November, ending seven consecutive months of decline. International palm and soy oil prices rose, while those of rapeseed and sunflower oils dropped.

The FAO Sugar Price Index rose 5.2% in November, influenced by strong buying trend amid tight global sugar supplies due to harvest delays in key producing countries and the announcement by India of a lower sugar export quota.

In separate cereal supply and demand estimates, the FAO lowered its forecast for global cereal production in 2022 to 2.756 billion tons from 2.764 billion estimated last month.

The forecast was 2% below the estimated output for 2021 and would mark a three-year low, the agency noted.

The agency further stated on Friday that 45 countries around the world, including 33 in Africa, nine in Asia, two in Latin America and the Caribbean and one in Europe, are assessed to be in need of external assistance for food due to conflicts, extreme weather events and soaring inflation rates.

Separately, the UN Office for the Coordination of Humanitarian Affairs (UNOCHA) launched on Thursday the Global Humanitarian Appeal for 2023 with a record $51.5 billion required to reach 230 million people in crisis.

As part of the appeal, the FAO said that it would need $1.9 billion to reach 48 million who rely on agriculture and subsistence farming, with lifesaving and livelihood assistance in 2023.



Oil Extends Climb on Supply Fears, Trade War Concerns Cap Gains

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
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Oil Extends Climb on Supply Fears, Trade War Concerns Cap Gains

FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)
FILE - Pump jacks extract oil from beneath the ground in North Dakota, May 19, 2021. (AP Photo/Matthew Brown, File)

Oil prices inched higher on Tuesday after threats by US President Donald Trump to impose secondary tariffs on Russian crude and attack Iran, though worries about the impact of a trade war on global growth capped gains.

Brent futures rose 21 cents, or 0.3%, to $74.98 a barrel at 0645 GMT, while US West Texas Intermediate crude futures climbed 22 cents, or 0.3%, to $71.70.

The contracts settled at five-week highs a day earlier.

"Near-term risks are skewed to the upside, with US threats of secondary tariffs on Russian and Iranian oil leading market participants to price for the risks of tighter oil supplies," said Yeap Jun Rong, market strategist at IG, Reuters reported.

However, broader themes still revolve around concerns of upcoming tariffs weighing on global demand, along with prospects of increased supply from OPEC+ and the US, said Yeap.

A Reuters poll of 49 economists and analysts in March projected that oil prices would remain under pressure this year from US tariffs and economic slowdowns in India and China, while OPEC+ increases supply.

Slower global growth would dent fuel demand, which might offset any reduction in supply due to Trump's threats.

After news of Trump's threats initially boosted prices on Monday, traders told Reuters they viewed the president's warnings to Russia, at least, as a bluff.

Trump, on Sunday, told NBC News that he was very angry with Russian President Vladimir Putin and would impose secondary tariffs of 25% to 50% on Russian oil buyers if Moscow tries to block efforts to end the war in Ukraine.

Tariffs on buyers of oil from Russia, the world's second largest oil exporter, would disrupt global supply and hurt Moscow's biggest customers, China and India.

Trump also threatened Iran with similar tariffs and bombings if Tehran did not reach an agreement with the White House over its nuclear program.

"For now, it appears to be just a threat to Russia and Iran. However, if it becomes a reality, it creates plenty of upside risk to the market given the significant oil export volumes from both countries," said ING commodities strategists on Tuesday.

The market will be watching for weekly inventory data from US industry group the American Petroleum Institute later on Tuesday, ahead of official statistics from the Energy Information Administration on Wednesday.

Five analysts surveyed by Reuters estimated on average that US crude inventories fell by about 2.1 million barrels in the week to March 28.