The Cereal Price Index averaged 252 points in March, down 2.6 percent from February, but still 60 percent higher than in March 2010. March was extremely volatile for grains, with international quotations first plunging sharply, driven largely by outside market developments such as the increased economic uncertainties accompanying the turmoil in North Africa and parts of the Near East as well as the Japanese earthquake and tsunami, before regaining most of their losses. Rice prices also fell as a result of abundant supply in exporting countries and sluggish import demand.
The FAO Meat Price Index averaged 169 points in March, little changed from February.
A positive outlook but food stocks diminish
World production of cereals fell in 2010, resulting in falling stocks, while total cereal utilization is expected to reach a record level in 2010/11.
While most indications point to increased cereal production in 2011, the projected growth may not be sufficient to replenish inventories, in which case prices could remain firm throughout 2011/12 as well.