The gauge for world food commodity prices declined for the sixth month in a row last month, with sharp drops in the quotations for vegetable oils more than offsetting higher cereal prices, according to a new report by the Food and Agriculture Organisation (FAO) of the United Nations.
The FAO Food Price Index averaged 136.3 points in September, down 1.1 per cent from August while remaining 5.5 per cent higher than its value a year earlier. The Index tracks monthly changes in the international prices of a basket of commonly traded food commodities.
The FAO Vegetable Oil Price Index drove the decline, decreasing by 6.6 per cent over the month to reach its lowest level since February, last year. International quotations for palm, soy, sunflower and rapeseed oils were all lower. Lingering heavy inventories of palm oil, coinciding with seasonally rising production in Southeast Asia, pushed palm oil prices down. Higher soy oil export availabilities in Argentina, increased sunflower oil supplies from the Black Sea region and lower crude oil prices also contributed to the drop in this sub-index.
The FAO Cereal Price Index, by contrast, rose 1.5 percent from August. International wheat prices rebounded by 2.2 per cent, linked to concerns on the dry crop conditions in Argentina and the United States, a fast pace of exports from the European Union (EU) amid high internal demand and heightened uncertainty about the Black Sea Grain Initiative’s continuation beyond November. World maize prices were mostly stable, as a strong United States dollar countered pressure from a tighter supply outlook linked to downgraded production prospects in the U.S. and the European Union (EU).
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The FAO All-Rice Price Index rose by 2.2 per cent, largely in response to export policy changes in India and concerns about the impact of the severe flooding in Pakistan.
The FAO Dairy Price Index dropped by 0.6 percent in the month, to a great extent reflecting the impact of the weaker euro versus the United States dollar, along with market uncertainties and bleak global economic growth prospects.
The FAO Meat Price Index declined by 0.5 percent. World bovine meat prices fell on high export availabilities from Brazil and elevated cattle-liquidation in some producing countries, while poultry meat prices inched down due to subdued import demand. By contrast, world pig meat prices rose due to a supply shortfall of ready-to-slaughter animals in the European Union.
The FAO Sugar Price Index was down 0.7 percent during the month of September, mostly related to good production prospects in Brazil along with lower ethanol prices and currency movement effects.
World cereal utilization over 2022/23 is now forecast to decline by 0.5 percent from the previous season to 2 784 million tonnes, with the reduction mostly reflecting reduced feed use.