THISDAY, Vol. 16, No. 5860, Page 41
Tuesday, May 10, 2011
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BusinessW09lD
F
ood prices have remained virtually steady in April after falling in March following eight months of successive increases. FAG has announced. However. while the FAO Food Price Index averaged 232 points in April. little changed from March. it was still 36 percent above April 2010 and only rwo percent below its peak in February 2011_ A fall in sugar prices and a decline in rice helped stabilize the index . but international prices.of nearly all other food commodities remained finn. ''A sliding dollar and increased oil prices are contributing to high food commodity prices. particularly grains." said David Hallam
Global Food Prices Stabilize By Crusoe Osagie
wilh
agency report
Director of FAO's Trade and Market Division. "With
demand continuing strong, prospects for a rerum to more normal prices hinge largely on how much production will increase in 20 II and how much grain reserves are replenished
in the new season." Wheat and maize prices: There was linle change in the index because although international grain prices increased sharply in April, the rise was more than offset by
...Another View Expresses Differently
W
orld food prices advanced to near recon' highs in April as grair, costs advanced. adding
pressure ~ to inflation that is
accelerating from Beijing to Brasilia, spurring'central banks
to raise interest rates. An index of 55 commodities
rose to 232 points from a revised 231 points in March, the UN's Food and Agriculture Organisation (FAO) said in a repoll on Thursday. The gauge climbed to an all time high of 237.2 points in February before dropping 2.6 percent in March. The cost of living in the US
increased at its fastest pace since December 2009 in the 12 months ended March, the same month in which Chinese consumer prices rose by the most since 2008. The European Central Bank raised interest rates on April 7, joining China, India. Poland and Sweden in a bid to control inflation panly blamed on food
costs.
Grains Council said in a report last month. The FAO's food price index fell for eight consecutive months after reaching its previous peak in June 2008. a situation that probably would not be repeated this year, Concepcion Calpe, an economist at the UN agency, said last month. "Very strOng" demand for food , feed and biofuel might mean prices would climb in coming months, she said. The FAO forecasts that food output will have to climb by 70 percent from 20 \0 to 2050 as tl,e world population swells to 9 billion and rising incomes boost meat and dairy consumption. Producing I kg of pork can take 3 .5kg of feed, according to data from the US Department of Agriculture. About 44 million people had been pushed into poverty since June by the "dangerous levels" of food prices. World Bank president Robert Zoellick said in February.
averaged nearly 348 points, down seven percent from March and 17 percent below its January record . The FAO Dairy Price Index averaged 229 points. down 2.4 percent from March. A good
declines in dairy, sugar, and rice. while oils and meat prices were mostly unchanged. The FAO Cereal. Price Index averaged 265 points, up 5.5 percent from March and 71 percent from April 20 \0 . Maize prices rose II percent and wheat increased four percent in April 20 II as a result of
unfavourable
weather
start of the northern henti-
and
planting delays. But large ' export supplies kept rice prices under downward pressure. The FAO OilslFats Price Index, which had falleo by seven percent in March. was nearly unchanged in April. The FAO Sugar Price Index .
~-' : " F2"'"1Q~4
sphere season has kept prices from rising after seven months of steady growth. The FAO Meat Price Index, although at a record level, remained stable as compared to a revised estimate of 172 points in March.
Cereal Marke!: Latest indications point to a recovery in world cereal pm-
;oj' :Ch. . . . . . . .
duction in 20 II in response to
high prices providing more normal weather conditions prevail. World wheat production is ,expected to increase by 3.5 percent and rice by three percent. But world cereal stocks for the crop seasons ending in 20 II are forecast to decline to their lowest level since 2008, mostly due to depleting coarse grain inventories. Global wheat inventories are forecast (0 decrease too, but the wheat stock-(Q-use ratio will remain relatively comfortable, while rice inventories are even expected to rise.
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. PR .· O S P' E CT
US ·
''Although the early outlook for cereal production in 20 II is good, weather in the coming months will be critical," said FAO grain analyst Abdolreza "Production Abbassian. prospects for 20 10 were extremely favourable at this time last year but unfavourable weather conditions between July and October changed that outlook drastically. "Among all the cereals, maize is the most worrisome /' Abbassian noted. ' This year we would need above-average. if not record, y ields in the United States for the maize si tuation to improve but maize plantings so far have been delayed considerably due to cool and wet conditions on the ground."
• . . . - . . . ... ~_,u.J.-
FA I R
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-L-R: President, Lagos Chamber a/Commerce and Industry, Otllnba Femi Deru}i'onner Minister 0/ Industry, Chref AIrs Nike Aknnde, Vice Presidellt,Lagos CIUJmber oJCornmerce and Industry, Mr, Goodie Ibm" al the Public PreselJlalioll oj the 2011 Lagos IlItenUJIional.Tade Fair Prospectus, held at Commerce House, in Lagos.. .reeell/ly PHaro: Sunday Adigun
Costlier food contributed to riOLS
across northern Africa and
the Middle East that toppled leaders in Egypt and Tunisia tlus year_ "There seems to be some easing for a lot of commodities, but whether this is demand rationing. we have to wait and
see:' said FAO sernar economist Abdolreza Abbassian. "If the weather is good, if plantings expand, I think we could see some relief in food prices." Sugar prices slumped 18 percent in New York last month, while milk futures fell 1.8 percent in Chicago. US wholesale beef prices dropped 3 .4 percent and pork declined 2.2 percent. Wheat prices rose 5 percent in Chicago after falling the pre-
vious two months, while maize jumped 9.1 percent. Maize has almost doubled in the past year on speculation that more planting in the US would nol be sufficient to rebuild global stocks. Wheat surged 57 percent over the same period and soybeans gained 39 percent as flooding ruined crops in Canada and Australia and drought reduced harvests in Russia and Europe. World grain stocks will probably slide for a second year . in the 12 months to June 2012 as maize consumption outpaces production and dry weather huns wheat prospects in the US and the EU. the International
African Leaders Commit to Agric Research ixteen African Ministers of Agriculture, Science and Technology have unanimously agreed to commit 10.000 US dollars into research annually to boost agriculture on the continent. The decision was taken at the end of their rwo-day annual dialogue held in Accra on Friday. It was organised by Forum for Agricultural Research in Africa (FARA), under the theme "Catalyzing Resources for African Agriculture." A communique issued at the end of their first dialogue and read by its chairman, Dr. Tiemoko Yo from Cote d'Ivoire, stated that member countries that were Wlder the European Union would allocate 10 per cent of their budgets towards sustaining agriculntral productivity in Africa. He said that the persistent high level of food insecurity and poverty in Africa despite the abundant nantral resources to support agriculture was a source of wony to the governments. According to Dr. llemoko Yo, if African governments fully supported FARA, the organisation would not only play the central role as a continental voice for agricultural
S
research and development, but also as a platform for nerworking to enhance Africa's capacity for agriculntral innovations. IIAgriculture is business rather than a way of life and sustaini ng increases in investments, requires value for money, transparency and accountability," he said. The ministers were from Ghana, Togo, Burkina Faso, La Cote d'Ivoire, Sierra Leone, Lesotho, Central African Republic (CAR), Guinea, Cameroon, Congo DR. Egypt, Rwanda and the Seycbelles. (Reuters) - Companies created jobs at the fastest pace in five years in April, pointing to underlying strength in the economy even as the jobless rate rose to 9.0 percent. Private sector hiring, including a big jump at retailers , boosted overall nonfarm payrolls by 244.000, the largest increase in 11 months. the Labor Depanment said on Friday. Economists had expected a gain of only 186,000. The private sector created 268.000 jobs, the most since February 2006, while government payrolls shrank. The data backed views the economic recovery would regain speed this quaner after stumbling in the first three
months of the year. Earlier thi s week, other reports pointed to a slowing in the labor market. "What we're seeing is a sustained pick-up in hiring and it suggests that businesses have gained enough confidence to look past short-term fluctuations in demand ," said Aaron Smith , a senior economist at Moody's Analytics in West Chester, Pennsylvania. Investors on Wall Street cheered the report, which showed job gains across tlle board, with the exception of govemment. U.s. stocks rose for the first time this week, while prices for longer-<lated govemment debt fell. The dollar rose broadly and some of the gains were driven by a German news report,later denied, suggesting Greece had raised the possibility of leaving the eure wne. While the economy has created jobs for seven straight months. gains remain too meager to make much of a dent in the pool of 13 .7 million Americans who are out of work. A recent spike in first-time applications for state unemployment benefits caused some economists to wony that job growth could slow in May and June. Initial claims vaulted to
an eight-month high last week. Still, the pace of job growth averaged 233.000 over the past three months, an acceleration from 104.000 in the prior three months that suggests the recovery is growing firmer. Nigel Gault, chief U .S. economist at IHS Global Insight in Lexington, Massachusetts , said the rise "shows good momentum that should allow the economy to absorb the rwin shocks from _the Middle East and Japan without too much damage.' The unemployment rate in April backed away from a rwoyear low of 8 .8 percent to rise for the first time in five months. It is derived from a separate survey of households. which showed a sharp decline in employment and a modest rise in the size of tlJe labor force . Economists, however, place more weight on the larger, lessvolatile survey of employers, which found 46.000 more jobs than previously thought were created in the prior rwo months. TIle report capped a good week for President Barack Oboma. whose approval ratings received a lift from the killing of Osarna bin Laden. A healthier jobs market could prove key to his hopes to win reelection in 2012.
The White House can also take relief from a big drop in oil prices on Thursday that should soon drag gasoline costs lower. Brent crude futures fe ll for a fifth straight day on Friday. "We've added over the last 14 months more than two million jobs in the private sector. This is the best month of private sector job growth in five years. So I don't think that's nibbling, that's clearly a move in the right direction ," White House economic adviser Austan Goolsbee told Reuters Insider. The relatively vigorous expansion in payrolls in April , if sustained, could encourage some members of the Federal Reserve to begin pushing for interest rates hikes. New York Federal Reserve Bank President William Dudley minimized any move soon toward tightening saying the economy has a "considerable way to go to meet the Fed's dual mandate of full employment and price stability. Most economists agree. noting that there is still a huge amount of slack in the labor market and wage growth remains tepid. Average hourly earnings rose a mere 3 cenlS in April and are up a modest 1.9 percent from a year ago. A ReUlers survey of economists at top financial institutions showed many expected the U.S. central bank to raise .1
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