Nestlé: raw material prices will stabilise

Nestle doesn t expect raw material prices to rise further this year, despite a recent FAO report that forecasts an increase of over 2% in the world food import bill in 2006. Nestle chief executive Peter Brabeck told investors that his company would be sticking to its previous forecast of an average oil price of around $65 a barrel to $70/bbl for this year, according to a report from Marketwatch.


The increase is expected to be strongest for cereals and sugar and smallest for meat. According to FAO report, a 10 m tonnes decrease in world wheat production is forecast this year, with a strong demand outlook set to drive up world trade in 2006/07 to 110 m tonnes. The world balance sheet for 2006/07 is expected to show a sharp drop in ending stocks as well as a decline in the stocks-to-use ratio to 25%, the lowest in over three decades.