The most recent report from the United Nations Food and Agriculture Organization (FAO) reveals that global food commodity prices experienced a modest decline in October, decreasing by 0.5 percent compared to September.
Notably, the only exception to this decline was the dairy products category.
The FAO Food Price Index, which monitors monthly fluctuations in the international prices of key globally-traded food commodities, reported an average index of 120.6 points for October. This represents a 10.9 percent decrease from the same period in the previous year.
According to a statement on the FAO’s website, the FAO Cereal Price Index saw a 1.0 percent drop from the previous month, mainly driven by a 2.0 percent reduction in international rice prices due to limited global import demand. The wheat index also fell by 1.9 percent, influenced by abundant supplies from the United States and heightened competition among wheat exporters.
The FAO Vegetable Oil Price Index decreased by 0.7 percent in October, primarily because of lower palm oil prices worldwide, attributed to increased seasonal output and subdued global import demand. However, prices for soy, sunflower, and rapeseed oils rose, particularly driven by strong demand in the biodiesel sector.
In contrast, the FAO Sugar Price Index experienced a 2.2 percent decline but still remained significantly higher, at 46.6 percent, when compared to the previous year.
Breaking the overall trend, the FAO Dairy Price Index rose by 2.2 percent in October, putting an end to nine consecutive months of decline. The increase was led by a significant surge in world milk powder prices, driven by rising import demand for both short-term and long-term supplies. Some uncertainty regarding the impact of El Niño weather conditions on upcoming milk production in Oceania also contributed to this increase.
In a separate report on cereal supply and demand, the FAO maintained its forecast for world cereal production in 2023 at a record high of 2,819 million tonnes. Adjustments were made to country-level figures, with notable increases in coarse grain production in China and most of West Africa, and reductions in forecasts for the United States and the European Union.
Wheat output predictions were raised for Iraq and the United States, but lowered for the European Union and Kazakhstan. World rice production for 2023/24 is expected to see a marginal increase compared to the previous year, with revisions including an increase in India’s production that offsets various other revisions, including a further reduction in Indonesian production prospects.
