FAO global food price index slips fifth consecutive month in August

The FAO food price index, which monitors monthly changes in the international prices of a basket of commonly-traded food commodities, declined for the fifth consecutive month in August as prices for most benchmark items dropped, according to the latest report by the Food and Agriculture Organisation of the United Nations (FAO).

Prices of the selected food commodities averaged 138.0 points in August, down 1.9 percent against 140.9 points in July 2022, but stood 7.9 percent or 10.1 points above its value in the corresponding period of 2021.

The FAO cereal price index averaged 145.2 points, down 2.0 points or 1.4 percent from the previous month, a drop the international organisation attributed to a 5.1 percent decline in international wheat prices that reflected improved production prospects in North America and Russia as well as the resumption of exports from the Black Sea ports in Ukraine. Rice prices on average also firmed; quotations for coarse grains increased marginally, by 0.2 percent, underpinned by firmer world maize prices due to hot, dry growing conditions in the European Union.

The FAO vegetable oil price index averaged 163.3 points, down 5.5 points or 3.3 percent from July, reaching a level slightly below that of August 2021. The continuous decline of the index, according to the FAO, was driven by lower world prices of palm, sunflower and rapeseed oils, which more than offset higher soyoil quotations. During the same period, international palm oil prices slipped for the fifth consecutive month, underpinned by rising export availabilities from top producer Indonesia.

On a similar trend, the FAO dairy price index dropped 3.0 points, or 2.0 percent, at an average of 143.5 points, while remaining 23.5 percent above its August 2021 value. The quotation for milk dropped amid expectations of increased supplies from New Zealand, even as production tracks lower in Western Europe and the U.S., the report noted.

The FAO meat price index averaged 122.7 points, down 1.8 points from July, marking the second consecutive monthly decline from an all-time high reached in June 2022. Nevertheless, it remained 9.3 points or 8.2 percent above its corresponding value in the corresponding period of 2021.

International quotations for poultry meat dropped in August amid elevated global export availability, while world bovine meat prices declined on weak domestic demand in some leading exporting countries. On the other hand, pig meat quotations rose over an increase in demand.

The FAO sugar price index averaged 110.4 points, down 2.4 points or 2.1 percent, its fourth consecutive decline and lowest level since July 2021. The FAO said the decline was triggered mainly by high export caps in India and lower ethanol prices in Brazil which raised expectations of higher demand for sugarcane to produce sugar.