Global Food Prices Drop Amid Robust Supplies

• Global Food Prices Drop Amid Robust Supplies

World food prices slipped last month, with only sugar posting a rise, the Food and Agriculture Organisation (FAO) has said.

FAO’s food price index, which measures monthly changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 165.4 points last month.

The FAO Food Price Index declined 1.4 percent from August and is now 7.4 percent below its level during September 2017.

The FAO Cereal Price Index dropped 2.8 percent, led by maize as expectations of a very large crop in the United States of America pushed export quotations down. International prices of rice and wheat also fell during the month, the latter due primarily to ongoing strong sales and shipments from the Russian Federation.

The FAO Vegetable Oil Price Index posted its eighth consecutive monthly decline, dipping 2.3 percent to a three-year low. Palm oil prices registered the sharpest decline, as large inventories in major exporting countries weighed on price quotations, which are now 25 percent below their level of a year ago.

The FAO Dairy Price Index declined 2.4 percent in September, continuing its downward trend, while the FAO Meat Price Index slipped marginally from its revised value for August.

The FAO Sugar Price Index is 21 percent below its September 2017 level, while it rose 2.6 per cent from August as ongoing harvesting operations in Brazil, the world’s largest producer and exporter, point to drought conditions having had a negative impact on sugarcane yields. Sub-par monsoon rainfall in India and Indonesia also provided upward support to international sugar prices.

FAO expects world cereal utilization to rise to 2 647 million tonnes in the 2018/19 season, up 1.1 percent from the estimated level for the previous year. Global trade in cereals is expected to approach 417 million tonnes, about 1.0 percent less than the record level of the 2017/18 marketing season. International trade volumes of wheat and rice are expected to decline, while those for maize to increase.