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The latest FAO Food Price Index, released on Friday, signalled the sharpest monthly surge in food commodity prices globally in the last 18 months, with the prices for all the covered commodity groups rising, with sugar leading the way.
In September, the FAO Food Price Index, a barometer of the international prices of a basket of globally-traded food commodities, averaged 124.4 points, registering an increase of 3.0 percent from the previous month and surpassing the corresponding value of a year ago by 2.1 percent.
The steepest price surge was recorded in the FAO Sugar Price Index, which jumped by 10.4 percent in September. This increase was attributed to adverse weather conditions that impacted sugarcane crops in Brazil, as well as concerns about the potential impact of India’s decision to lift restrictions on the use of sugarcane for ethanol production on the country’s sugar export availability.
The FAO Cereal Price Index rose by 3.0 percent in September, largely driven by higher wheat and maize export prices. International wheat prices saw an uptick due to concerns over excessively wet weather conditions in major producing regions, including Canada and the European Union, although this was somewhat mitigated by the presence of competitively priced wheat supplies from the Black Sea region.
Amidst a generally rising trend in the FAO Food Price Index, the maize component also saw an increase, largely affected by lower water levels on key transportation routes, including Brazil’s Madeira River and the United States’ Mississippi River, which hampered the efficient transportation of maize supplies.
In contrast, the FAO All Rice Price Index registered a decline of 0.7 percent, largely reflecting subdued trade activity, as well as expectations of increased export availabilities in the coming months.
The FAO Vegetable Oil Price Index registered an increase of 4.6 percent from August, with all covered oils, including palm, soy, sunflower, and rapeseed, witnessing higher quotations.
The uptick in international palm oil prices was driven by reduced output in the major producing countries in Southeast Asia, while the recovery in soyoil prices was largely attributable to lower-than-anticipated crushings in the United States.
The wider vegetable oil market also continued to experience tight global supplies and increasing demand, further contributing to the upward price pressure on these key commodities.
In September, the FAO Dairy Price Index saw a 3.8 percent increase, with whole milk powder, skim milk powder, butter, and cheese all recording higher quotations.
The FAO Meat Price Index, meanwhile, experienced a modest rise of 0.4 percent, primarily driven by higher poultry meat prices as a result of strong international import demand for Brazil’s product.
World bovine and pig meat prices remained stable during the month, while ovine meat prices declined slightly from their August levels.
