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FAO Food Price Index down marginally in November

December 16th, 2017

» The FAO Food Price Index* (FFPI) averaged 175.8 points in November 2017, down fractionally (0.5 percent) from October but still almost 4 points (2.3 percent) above the corresponding period last year. A sharp rise in sugar and vegetable oil quotations was largely offset by a fall in dairy values while international prices of cereals and meat products remained relatively muted.

» The FAO Cereal Price Index averaged 153.1 points in November, nearly unchanged from October but up almost 12 points (8.3 percent) from November 2016. The Index has remained largely steady since August, generally reflecting an overall balanced supply and demand situation especially with regard to wheat and maize markets. In November, international rice prices rose by 1.1 percent, amid stronger buying interest and currency movements.

» The FAO Vegetable Oil Price Index averaged 172.2 points in November, up 2.1 points (or 1.2 percent) from October and marking a 9-month high. The rise mainly reflects higher quotations for soy, rapeseed and sunflower oils. Soy oil quotations increased, as weather uncertainties continued to affect crops in South America and also because below-average oil content was reported for the United States’ recently harvested crop. International prices of sunflower and rapeseed oils rose, underpinned by, respectively, subdued availabilities and firm demand. Lower palm oil values, mainly following a hike in Indian import duties and higher than anticipated closing stock levels in Malaysia, prevented the index from rising further. Firm mineral oil values also lent support to vegetable oils prices.

» The FAO Dairy Price Index averaged 204.2 points in November, down 10.6 points (4.9 percent) from October, representing the second consecutive month of a sharp decline. However, the index is still 9.6 percent higher than November 2016. International price quotations for butter, cheese and whole milk powder (WMP) all fell, as rising milk output in all the major producing countries contributed to reducing concerns about the availability of supplies. Skim milk powder (SMP) prices slid to a near 18-month low, on continued uncertainty over the intervention stocks held by the European Union.

» The FAO Meat Price Index* averaged 173.2 points in November, almost unchanged from its slightly revised October value. International price quotations for pigmeat weakened for the third consecutive month, on account of slow import demand and large export availabilities. Similarly, ovine meat quotations slid downward, for the second successive month, largely due to continued increase in meat supplies in Oceania. By contrast, bovine meat prices rose for the third month in a row, supported by limited spot supplies from Oceania. Prices in poultry meat markets remained stable.

» The FAO Sugar Price Index averaged 212.7 points in November, up 9.2 points (4.5 percent) from October but still as much as 26 percent below the corresponding month last year. International sugar prices rose in November, mostly supported by a drop in exports from Brazil and concerns over firmer oil prices encouraging greater switch of cane crush to produce ethanol than sugar.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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FAO Food Price Index edges down in October

November 11th, 2017
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» The FAO Food Price Index* (FFPI) averaged 176.4 points in October 2017, down 2.2 points (1.3 percent) from September. Although at this level the FFPI was up 4 points (2.5 percent) from its value in October 2016, it remained 27 percent below its all-time high (in nominal terms) of 240 points registered in February 2011. With the exception of cereals, all the other indices used in the calculation of the FFPI fell in October.

» The FAO Cereal Price Index averaged 152.8 points in October, up a notch from September and 10.5 points (7.4 percent) higher than the same month last year. Among the major cereals, wheat quotations were generally lower, pressured by large exportable supplies from the Back Region and increased competition among exporters. Maize prices increased slightly in the US, although those from South America were weighed down by large supplies. Rice prices strengthened in October, amid seasonally tight Japonica and fragrant supplies, with additional support for Japonica prices stemming from a series of tenders in the Far East.

» The FAO Vegetable Oil Price Index averaged 170 points in October, down 1.8 points (or 1.1 percent) compared to the previous month and close to the level recorded one year ago. The index’ retreat was primarily driven by palm and soy oils. Palm oil values weakened on higher than anticipated inventory levels in Malaysia and the expectation of production gains in Southeast Asia, while soyoil prices eased on good soybean harvest progress in the United States and forecasts of ample global availabilities in 2017/18. Lower sunflower oil quotations, facilitated by large export availabilities in the Black Sea region, also weighed on the index.

» The FAO Dairy Price Index averaged 214.8 points in October, down 9.4 points (4.2 percent) from September and marking the first drop since May 2017. At that level, the index was 32 points (17.5 percent) above its value in October 2016, but 22 percent below its peak reached in February 2014. International quotations for butter, skim milk powder (SMP) and whole milk powder (WMP) eased in October, while those of cheese remained more stable. Butter and WMP prices fell as importers held back on purchases, awaiting arrival of new supplies from Oceania. Low demand and ample intervention stocks in the EU hastened the decline of SMP prices. A balanced cheese market contributed to more stable cheese quotations.

» The FAO Meat Price Index* averaged 172.7 points in October, down 1.6 points (0.9 percent) from September and continuing a trend of moderate declines that began in July this year. International prices of pig and ovine meat declined in October, while those of bovine meat increased and of poultry were stable. Intense competition among exporters and sluggish import demand have been behind the declines in pigmeat prices observed in recent months. However, bovine meat prices rose for the third consecutive month due to limited spot offers from Oceania. A seasonal increase in ovine meat supplies in Oceania pushed down ovine prices, while poultry meat markets remained well balanced.

» The FAO Sugar Price Index averaged nearly 203 points in October, down 1.4 points (0.7 percent) from September and as much as 112 points, or 36 percent, below the corresponding month last year. Sugar prices fell in October as the potential for higher supplies in 2017/18 was further reinforced with prospects for a larger beet crop in the EU and bigger output in the Russian Federation. Weaker Brazilian Real, increasing the potential for larger export sales from Brazil, also weighed on international prices, especially in view of a significant slowdown in purchases by China because of higher import tariffs.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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FAO Food Price Index mildly up in September

October 7th, 2017
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» The FAO Food Price Index* (FFPI) averaged 178.4 points in September 2017, up 1.4 points (0.8 percent) from August and 7.4 points (4.3 percent) above September 2016. Firmer prices in the vegetable oil and dairy sectors were behind the small month-on-month rise in the value of the FFPI.

» The FAO Cereal Price Index averaged 152.2 points in September, down 1.6 points (1.0 percent) from August. While the Index declined for the second consecutive month, it remained 8 percent above the corresponding month last year. Maize prices fell in September, reacting to ample supplies in South America and harvest pressure in the northern hemisphere. Wheat values were also weaker, with continued upgrading of this year’s harvest in the Russian Federation a major factor. By contrast, seasonally tight availabilities of fragrant rice and firm demand for higher quality Indica supplies kept international rice prices firm over the month.

» The FAO Vegetable Oil Price Index averaged 171.9 points in September, compared to 164.4 in August – rising for the second consecutive month and marking a 7-month high. The gain was primarily driven by palm oil, prices of which strengthened amid lower than anticipated production in Southeast Asia and firm import demand fuelled by low inventory levels in main importing countries. International soy oil prices also rose, mainly reflecting concerns about a slow start in plantings in South America, though the price increases were capped by larger than expected harvest estimates in the United States. Continued firmness in rapeseed and sunflower oil values also contributed to the rise in the index.

» The FAO Dairy Price Index averaged 224.2 points in September, up 4.5 points (2.1 percent) from the previous month. At this level, the index was 27.4 percent higher than the corresponding period last year, but still 18.6 percent below its peak reached in February 2014. The increase in September reflects continued supply constraints in Australia, New Zealand and the European Union, with growth in the United States remaining timid. Butter and cheese remain the dairy products in highest demand, especially in Asia. Meanwhile, international prices of Skimmed Milk Powder (SMP) and Whole Milk Powder (WMP) fell due to limited buying interests.

» The FAO Meat Price Index* averaged 173.2 points in September, unchanged from August but up 9.5 points (5.8 percent) compared to the same period last year. In September, a rise in the international prices of ovine meat countered a decline in pig meat quotations, while those of bovine and poultry meat remained largely unchanged. In the case of ovine meat, prices rose, buoyed by strong import demand, especially from the Middle East and South East Asia, coupled with continued overall supply constraints in Oceania. By contrast, pigmeat prices fell slightly, responding to improved supplies from Brazil. Poultry and bovine meat markets remained well supplied, keeping prices stable.

» The FAO Sugar Price Index averaged 204.2 points in September, nearly unchanged from August but as much as 101 points (33 percent) below the same period last year.  The rapid decline in sugar quotations since the beginning of this year reflects a continuing oversupply situation prevailing in world markets, in parallel with the slow-down in demand.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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FAO Food Price Index up for the third month in a row

August 26th, 2017
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» The FAO Food Price Index* (FFPI) averaged 179.1 points in July 2017, up 3.9 points (2.3 percent) from June and the third successive month of increases. This latest rise put the Index nearly 16.6 points (10.2 percent) above last year’s level and at its highest since January 2015. A combination of supply constraints and currency movements provided support to prices of most cereals, sugar and dairy. Instead, meat values remained steady month-on-month, whereas the Vegetable Oil Index edged down.

» The FAO Cereal Price Index averaged 162.2 points in July, up almost 8 points (5.1 percent) from June and 14.1 points (9.5 percent) from July 2016. Cereal prices have risen consistently over the past three months, driven by stronger wheat prices and, to a lesser extent, also firmer rice quotations. Wheat values rose the most in July, as continued hot and dry weather deteriorated spring wheat conditions further in North America, fuelling quality concerns, particularly for higher protein wheat. Seasonal tightness also provided some support to rice quotations, although gains were capped by a slowdown in demand. Instead, maize values remained largely steady, as support provided by a more rapid pace of foreign purchases by China was outweighed by improved weather conditions in the United States.

» The FAO Vegetable Oil Price Index averaged 160.4 points in July, down 1.8 points (or 1.1 percent) from June and marking the lowest level since August 2016. The slide was driven by palm oil, the key commodity in the Index. International palm oil quotations continued to ease on good production prospects in Southeast Asia and weak global import demand, notwithstanding low inventory levels. On the other hand, world soy oil prices firmed, fuelled by concerns regarding soybean growing conditions in the United States, as unusually dry weather was reported from several producing regions. Rapeseed and sunflower oil values also strengthened, preventing the Index from falling more markedly.

» The FAO Dairy Price Index averaged 216.6 points in July, up 7.6 points (3.6 percent) from June and 74.3 points (52.2 percent) above its value in July 2016. Despite this latest increase, the Index is still 21 percent below its peak reached in February 2014. International prices of butter, cheese and Whole Milk Powder (WMP) increased, but those of Skimmed Milk Powder (SMP) declined.  Tighter export availabilities pushed butter prices to a new high in July, widening the spread between butter quotations and other dairy products further. While strong buying activity from Asian importers also underpinned cheese and WMP quotations, SMP prices were weighed down by slack demand and prospects of larger releases from the intervention stocks in the EU.

» The FAO Meat Price Index* averaged 175.1 points in July, virtually unchanged from June. At this level, the Index is 8.2 percent above July 2016 and 17.4 percent below its peak reached in August 2014. An increase in international prices for ovine meat in July was offset by downward price movements in bovine, pig and poultry sectors. In the case of bovine meat, prices fell due to weaker import demand in the United States because of increased domestic supplies. While global markets for pig and poultry meat remained well supplied, international prices could have declined further if not for strong consumer demand. Ovine meat prices rose for the fourth consecutive month, reflecting reduced export supplies from Oceania.

» The FAO Sugar Price Index averaged 207.5 points in July, up 10.2 points (5.2 percent) from June, but still 26 percent below its value a year earlier. July marked the first monthly increase in sugar prices since the beginning of the year. A strong appreciation of the Brazilian real was the main catalyst for July’s rebound in sugar quotations, although generally favourable weather aided the harvest in Brazil, the world’s largest supplier, as well as crop development in Thailand and India.

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FAO Food Price Index rebounds in May

June 17th, 2017
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» The FAO Food Price Index* (FFPI) averaged 172.6 points in May 2017, up 3.7 points (2.2 percent) from April and nearly 16 points (10 percent) higher than its May 2016 level.  The rebound in the value of the Index followed three months of consecutive declines. With the exception of sugar, all other commodity indices used in the calculation of the FFPI increased in May.

» The FAO Cereal Price Index averaged 148.1 points in May, up 2 points (1.4 percent) from April, but still 4.4 points (2.9 percent) below its value of May 2016. Weather developments and stronger trade activity underpinned wheat export prices, while strong demand for higher quality Indica rice drove up international rice prices for the sixth-successive month.  Large global availabilities prevented strong gains in maize export prices.

» The FAO Vegetable Oil Price Index averaged 168.7 points in May, posting a month-on-month increase of 7.6 points (or 4.7 percent) – after three months of consecutive declines. The May reversal in trend mainly reflects rising palm and soy oil prices. While palm oil quotations firmed on rising global import demand, which kept world inventories low, soy oil prices rose on expectations of continued robust consumption, in particular in the United States. In both markets, unusually strong demand outweighed the price-depressing effect of anticipated improvements in global supplies.

» The FAO Dairy Price Index averaged 193 points in May, up 9.5 points (5.1 percent) from April and as much as 51 percent from May 2016. In spite of the latest increase, the index is still 30 percent below its peak reached in February 2014. Quotations of all the dairy products that compose the index rose in May. In the case of butter, firm domestic demand in Europe and North America provided support to prices, while ample intervention stocks in the EU limited the increase in skim milk powder prices.

» The FAO Meat Price Index* averaged 171.7 points in May, up 2.5 points (1.5 percent) from April, continuing the trend of modest price increases observed since the beginning of the year. Quotations for pig, bovine and ovine meat all rose, while those for poultry meat were stable. Pig meat prices increased on firm demand, while bovine meat prices gained ground amid limited export availabilities from Oceania. Meanwhile, ovine meat prices rose for the third consecutive month, bolstered by constrained export supply.

» The FAO Sugar Price Index averaged 227.9 points in May, down 5.4 points (2.3 percent) from April and marking a 13-month low. Sugar prices were heavily affected by higher-than-expected sugar output in Brazil’s centre-south region, combined with the sudden slide in the Brazilian Real, which discouraged crush for ethanol in the domestic market in favour of relatively more lucrative sugar exports. Expectations of larger exports from Pakistan and China’s decision to impose high duties on imports beyond its WTO tariff-rate quota (TRQ) commitment exerted additional downward pressure on international sugar prices.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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The FAO Food Price at near two-year high in January

February 4th, 2017
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» The FAO Food Price Index* (FFPI) averaged 173.8 points in January 2017, up 3.7 points (2.1 percent) from the revised December value. At this level, the FFPI is at its highest value since February 2015 and as much as 24.5 points (16.4 percent) above its level in the corresponding period last year. The strong rebound in the January value of the FFPI was driven by a surge in international sugar quotations and sharp increases in export prices of cereals as well as vegetable oils. Meat and dairy markets remained more stable.

» The FAO Cereal Price Index averaged 147 points in January, 4.8 points (3.4 percent) above December and representing a six-month high. International prices of all major cereals strengthened in January. Wheat values rose mostly on concerns over unfavourable weather hampering 2017 crops and the reported reduction in winter wheat area in the United States. The firming of maize values largely reflected strong demand and uncertain crop prospects in South America. International rice prices also increased, amid expectations of a return of important buyers to the market, coupled with lower export availabilities in India as a result of ongoing state procurement.

» The FAO Vegetable Oil Price Index averaged 186.3 points in January, up 3.3 points (1.8 percent) from December and marking the third consecutive monthly increase. The rise continued to be driven by palm oil, the prices of which climbed to a 30-month high on persistent concerns over slow production recovery in Southeast Asia and low global inventory levels, amid strong import demand. While rapeseed oil prices also increased further, fuelled by a tight supply outlook for 2016/17, soy oil prices eased on expectations of ample global availabilities, notwithstanding recent downward revisions for soy crops in the US and Argentina.

» The FAO Dairy Price Index averaged 193 points in January, unchanged from December.  Prices were little changed across the board, a marked departure from the trend recorded in the second half of 2016, when the Index jumped by 50 percent (May-December).  With peak seasonal production moving from the southern to the northern hemisphere and many major buyers having secured adequate supplies in earlier months, trade remained subdued.

» The FAO Meat Price Index* averaged 156.7 points in January, almost unchanged from its revised value for December.  A rise in quotations for bovine meat was counterbalanced by a fall for those of ovine meat and a small decrease for poultry and pig meat.  In Australia, herd rebuilding constrained supplies of bovine meat for export and caused prices to climb. In the case of ovine meat, Oceania export prices dropped for the third month in a row, reflecting the seasonal slaughter peak and an associated boost in supply. Pig and poultry meat quotations also recorded their third month of decline, with a market characterized by generally abundant world supplies and stable demand.

» The FAO Sugar Price Index averaged 288.5 points in January, up 26 points (9.9 percent) from December 2016. The sharp increase in international sugar prices in January was mainly underpinned by firmer expectations of a global sugar production shortfall in 2016/17. Less buoyant growth prospects for sugar output are mainly attributed to protracted supply tightness in some of the key sugar producing regions, specifically in Brazil, the world’s largest sugar producer and exporter, as well as in India, the world’s second largest producer, and Thailand.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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The FAO Food Price Index hits a 15-month high in August

September 24th, 2016
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fao_index_price_08092016_1» The FAO Food Price Index* (FFPI) averaged 165.6 points in August 2016, up 3 points (1.9 percent) from July and almost 7 percent above the corresponding period last year. The August value of the Index is the highest since May 2015. Except for cereals, prices of all other commodities used in the calculation of the FFPI rose in August, led by dairy, oils and sugar.

» The FAO Cereal Price Index averaged 143.6 points in August, down 4.5 points (3.0 percent) from July and 7.4 percent below its year-earlier level. Seasonal harvest pressure, associated with the completion of wheat harvests in the northern hemisphere, kept wheat quotations under some downward pressure. Maize values also receded on exceptional crop prospects in the United States and ample supplies of low quality wheat, which could compete with maize for use as animal feed. Meanwhile, a combination of thin buying interest and prospects of larger availabilities from imminent crop harvests weighed on international rice prices.

» The FAO Vegetable Oil Price Index averaged 169.1 points in August, up 11.7 points (7.4 percent) from July, reversing the easing of prices observed in the preceding three months. The rebound was mainly driven by strengthening palm oil quotations due to lower than anticipated output in Malaysia and continued tightness in global inventories, which coincided with rising import demand in some key importing countries, notably China, India and the EU. International prices of rapeseed oil also firmed, reflecting lower crop prospects in the EU.

» The FAO Dairy Price Index averaged 154.6 points in August, up 12.3 points (8.6 percent) from July and around 14 percent from last year.  Prices rose for all the dairy commodities that compose the Index, in particular for cheese, whole milk powder and butter.  The latest  increase confirmed a notable change in market sentiment, as falling milk production in the EU, coupled with an unexceptional opening to the dairy year in Oceania, pointed to tighter export supply prospects than had been earlier anticipated.  Skimmed milk powder quotations were muted, supported by large EU intervention stocks, which were seen as a potential future source of supply.

» The FAO Meat Price Index* averaged 162.2 points in August, 0.5 points (0.3 percent) higher than its revised July value but down 5 percent from August fao_index_price_08092016_22015. International prices for ovine meat, pigmeat and poultry meat strengthened somewhat, while quotations for bovine meat declined.  Limited supplies of pigmeat in the EU and sheep meat from Oceania lent some support to prices for these products, while firm international demand, in particular from Asia, underpinned poultry meat prices.  Meanwhile, recovery in bovine meat production in the United States reduced the need for external supplies and contributed to international prices falling back somewhat.

» The FAO sugar price index averaged 285.6 points in August, up 6.9 points (2.5 percent) from July, reaching its highest level since October 2012 and as much as 75 percent above the corresponding period last year. The latest surge in sugar prices was largely on account of a continuous strengthening of the Brazilian currency (Real), which appreciated by another 2 percent against the US dollar in August. Expectations of a significant deficit in global markets in 2016/17 and prospects of reduced inventories in Asia also underpinned international sugar quotations.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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The FAO Food Price Index rises in June for the fifth consecutive month

July 16th, 2016
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indice_precios_fao_en_07072016_1» The FAO Food Price Index* (FFPI) averaged 163.4 points in June 2016, 6.6 points (4.2 percent) higher than in May and one percent below the corresponding month last year. Not only did the June increase mark the fifth consecutive monthly rise in the value of the FFPI, but it also represented the largest monthly increase witnessed over the past four years. Except for vegetable oils, the values of all the commodity sub-indices moved up in June, led by a surge in the price of sugar and more moderate increases for cereals, dairy and meat.

» The FAO Cereal Price Index averaged 156.9 points in June, up 4.4 points (2.9 percent) from May, but still 3.9 percent below the June 2015 level. Nearly all of last month’s increase was caused by a strengthening of maize prices; primarily because of tightening spot export supplies in Brazil. Wheat values rose during the first half of the month, before reversing course subsequently on reports of record yields in the United States and better than expected harvests in the Black Sea region.  International rice prices varied little from May levels, as upward pressure exerted by generally tight export availabilities was countered by subdued buying interest.

» The FAO Vegetable Oil Price Index averaged 162.1 points in June, down 1.3 points (0.8 percent) from May, primarily reflecting lower quotations of palm oil, due to subdued global import demand and a seasonal recovery in production in Indonesia and Malaysia. Prospects of ample sunflower and rapeseed oil supplies also weighed on the index. By contrast, soy oil prices increased, underpinned by reduced export availabilities in South America and less favourable than initially anticipated  production prospects for 2016/17.

» The FAO Dairy Price Index averaged 137.9 points in June, up 9.9 points (7.8 percent) from May.  Average monthly prices for all the dairy commodities that compose the Index rose. An uncertain outlook for the 2016/17 milk year in Oceania and a slowdown of monthly milk production growth in the EU in April caused quotations to strengthen.  Despite the magnitude of the increase, the June rise only represented a recovery from the low prices prevailing in the preceding three months. Compared to June last year, the Dairy Price Index was down 23 points, or 14 percent.

» The FAO Meat Price Index* averaged 158.3 points in June, 3.8 points (2.4 percent) higher than its revised May value. indice_precios_fao_en_07072016_2For the third consecutive month, average quotations strengthened for all categories of meat, particularly those of pigmeat and ovine meat, while smaller increases were registered for bovine and poultry meat.  In the EU, a shortage of pigs for slaughter and lighter slaughter weights constrained supply and caused export quotations to move up strongly. Similarly, reduced export supplies boosted quotations of sheep meat and bovine meat in Oceania.  Poultry meat prices have exhibited a moderate but steady increase for the year so far, rising by 10 percent since January: Brazil in particular has experienced strong growth in sales, especially to Japan and Saudi Arabia.

» The FAO Sugar Price Index averaged 276.0 points in June, up as much as 35.6 points (14.8 percent) from May. The surge mostly mirrored less positive production prospects in Brazil, the world’s largest sugar producer and exporter, following heavy rains which hampered harvesting operations and affected sugar yields. In addition, as wet weather tends to reduce the amount of recoverable sugar per tonne of cane, larger volumes of sugarcane output were reportedly diverted from sugar to ethanol production, lending further support to prices.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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The FAO Food Price Index up a notch as sliding dairy prices nearly offset sharp rises in sugar and palm oil prices

April 16th, 2016
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fao_index_price_07042016_1» The FAO Food Price Index* (FFPI) averaged 151.0 points in March 2016, up 1.0 percent from February, but almost 21 points (12.0 percent) below its March 2015 level. The main feature last month was the strong rebound in sugar prices, which, combined with a further increase in vegetable oil quotations, more than offset a plunge in dairy values. International prices of the other commodities used in the calculation of the FFPI changed little.

» The FAO Cereal Price Index averaged 147.6 points in March, down marginally from February, but 13.1 percent less than in March 2015. Wheat prices averaged slightly lower, as a result of strong competition and a generally favourable supply outlook in the new season. Maize quotations remained under downward pressure, largely influenced by favourable production prospects in South America, weak import demand and larger than anticipated outlook for plantings in the United States. Rice prices were stable.

» The FAO Vegetable Oil Price Index rose to 159.8 in March, up 6.3 percent (9.5 points) from February, hitting a 15-month high. The upturn was driven by palm oil, the component of the index with the highest weight. International palm oil prices surged for the second consecutive month on concerns about stagnating global production in 2016, following prolonged dry weather in Malaysia and Indonesia. By contrast, the average March prices of other oils remained either unchanged (soy oil) or fell (sunflower and rapeseed oil).

» The FAO Dairy Price Index averaged 130.3 points in March, down 11.7 points (8.2 percent) from fao_index_price_07042016_2February – plummeting to a level last seen in June 2009.  While prices for all dairy commodities fell, butter and cheese were the most affected, reflecting a build-up of stocks in the major exporting countries.   In the case of milk powders, the declines have been contained by continued sales of SMP to intervention stocks in the EU, so providing an indicative base price for international transactions.

» The FAO Meat Price Index* averaged 146.4 points in March, practically identical to its February  revised value.  Prices were stable across the board.  The removal of excess supplies through the aid to private storage scheme at the beginning of the year has helped to keep pigmeat export prices steady in the EU and, by extension, in the international market overall.  Sheepmeat prices also stabilized, reflecting the end of the seasonal peak in supplies from Oceania.  Poultry and bovine meat prices remained essentially unaltered compared to the previous month, as international supply and demand remained well-balanced.

» The FAO Sugar Price Index averaged nearly 219 points in March, up 32 points (17.1 percent) from February and reaching its highest level since November 2014. Last month’s sharp increase mainly reflects the expectation of an even larger production deficit during the current crop year than earlier anticipated, following the recent heavy rainfall in Brazil, the world’s largest sugar producer. Reports of higher use of raw sugar for the production of ethanol in Brazil also boosted prices.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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The FAO Food Price Index steady in February, but 14.5 percent weaker than a year ago

March 5th, 2016
Comments Off on The FAO Food Price Index steady in February, but 14.5 percent weaker than a year ago

» The FAO Food Price Index* (FFPI) averaged 150.2 points in February 2016, nearly unchanged from January, but 25.6 points (14.5 percent) below February fao_index_price_04032016_12015. The most outstanding development last month was a surge in vegetable oil quotations, which, along with a small recovery in meat prices, more than offset declining cereal, sugar and dairy prices.

» The FAO Cereal Price Index averaged 148.3 points in February, marginally down from January and 13.7 percent less than one year ago. Among the major cereals, wheat prices fell most, subsiding 1.5 percent, influenced by slow trade activity and expectations of continued large export supplies for the remainder of the marketing season. Maize quotations were only marginally lower, sustained by large purchases by a number of countries. On the other hand, rice prices firmed slightly compared to last month, underpinned by stronger Japonica rice quotations.

» The FAO Vegetable Oil Price Index averaged 150.3 points in February, up as much as 11.2 points (or 8 percent) from January and the highest value since June 2015. The upswing was led by palm oil, which appreciated by 13 percent on reports of falling inventories in Southeast Asia, combined with poor prospects for production in the coming months. Soy oil prices also firmed, on the expectation that poor supplies of palm and other vegetable oils would boost global demand for soy oil.

» The FAO Dairy Price Index averaged 142 points in February, down 3.1 points (2.1 percent) from January.  Lacklustre import demand, especially by China, and ample availability of supplies for export resulted in milk product prices falling across the board.  Additionally, some importers limited purchases for stocks replenishment, as the market was perceived as being well-supplied for immediate and short-term needs.  This sentiment was re-enforced by a rise in sales of SMP to intervention stocks in the EU.

» The FAO Meat Price Index* averaged 148.2 points in February, up marginally from its January revised value.  For the different categories of meat, prices forfao_index_price_04032016_2 bovine meat and pigmeat rose, whereas those of poultry and ovine meat fell.  Bovine meat quotations moved higher, on the basis of constricted supplies in both Australia and the United States, while EU pigmeat prices continued to be underpinned by the opening of aid to private storage. Sheepmeat prices dipped for the fourth consecutive month, a reflection of seasonally peaking supplies from Oceania.  Finally, the poultry industry continued to benefit from lower feed prices, a factor that has contributed to quotations falling each month since June last year.

» The FAO Sugar Price Index averaged 187.1 points in February, down 12.3 points (6.2 percent) from January, marking the second consecutive monthly decline after four months of steady rises. The decrease mainly mirrored better than expected crop conditions in Brazil, the world´s leading sugar producer and exporter. Prospects for a larger world sugar production decline than earlier anticipated did not reverse the price fall, amid comfortable global sugar inventories.

* Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

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Source: FAO

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