According to the Food and Agriculture Organisation (FAO) of the United Nations, global food prices seem to have stabilised at a relatively high level.
Although the outlook for the second half of the year and into the next indicate generally improved supplies, demand remains strong and the global food import Bill in 2012 is expected to fall only slightly from the 2011record.
In its latest Food Outlook, containing global market analysis, the FAO has said that international prices of dairy products are declining in the face of rising supplies.
At the same time import demand remains strong, keeping price well above recent historical averages.
Prices of dairy products began to decline in mid-2011 as supplies to the international market improved, the FAO pointed out adding that in April, after a favourable outcome of the milk producing season in the southern Hemisphere and a equally positive opening of the season in the northern Hemisphere, prices registered a further fall.
The price slide reflected a rise in export availability but also a fall in the value of the euro against the US dollar. Yet, in spite of the recent drop, international prices for dairy products remain well above historical averages.
With publicly financed inventories at minimal levels in the EU and the US, the market is particularly sensitive to sudden changes in milk production and availability of milk products.
Nonetheless, the positive supply outlook for the rest of 2012 is likely to translate into further downward pressure on prices, the report argued.
World milk production in 2012 is forecast to grow by 2.7 per cent to 750 million tonnes.
Asia is expected to account for most of the increase; but higher output is anticipated in most regions. World trade in dairy products is foreseen to continue expanding in 2012.
Demand remains firm with import anticipated to reach 52.7 million tonnes of milk equivalent.
Asia will continue to be the main market followed by North Africa, the West Asia and Latin America and the Caribbean.
Growing world import demand is expected to be met mainly through pasture-based milk supplies from Oceania and South America, the report pointed out.
On meat, the Food Outlook said the global markets in 2012 are expected to see a recovery of supplies in traditionally importing countries and strong competition for markets. Near-record prices are constraining consumption growth.
Global meat output in 2012 is set to expand by nearly two per cent to 302 million tonnes, driven exclusively by gains in poultry and pig-meat production.
Most of the sector growth is likely to originate in the developing countries as developed countries may witness a second year of slipping output as profitability stumbles in the face of high input costs, stagnating domestic meat consumption and severe competition from developing countries, the report argued.
As increased production in key importing countries slows down global meat trade expansion, an intensified struggle to expand the market in 2012 may be expected.
Combined with limited supplies in developed-exporting countries, this is seen shifting international market shares towards developing countries, in particular Brazil and India.
Drought in the US, the major meat exporter and limited animal numbers in other exporting countries have kept international meat prices at near-record levels in the first quarter of 2012, the report pointed adding slowing global demand and two years of stagnating consumption in developed countries may imply less price pressure in 2012.
However, meat production this year will hinge critically on feed prices and the animal disease situation. On fish, FAO's Food Outlook said sustained demand for fish and fishery products is boosting aquaculture production worldwide and pushing prices higher.
Overall production is expected to grow by at least two per cent in 2012, supported by a strong increase in aquaculture output.
Trade is expected to remain brisk with 2012 export volumes rising again.