For the first time in five months, global food prices have risen. According to the Food and Agriculture Organisation of the United Nations’ (FAO) latest Food Price Index.
International quotations for sugar and key cereals increased significantly, with October gaining an average 172.7 points, some 1.7% higher than the previous month and 6.0% higher than during October 2018.
The cereal price rose by 4.2% during the month, as wheat and maize export prices moved up sharply on the back of reduced crop prospects in several major producing countries and robust trade activity. By contrast, rice prices slipped, driven by subdued demand and prospects of an abundant basmati harvest.
The sugar price increased by 5.8% in October amid expectations of much tighter supplies in the year ahead, due mainly to anticipated large reductions in sugar output in India and Thailand.
The vegetable oil price also rose, increasing 0.5% to reach its highest level in more than a year. Palm oil quotations nudged up by new biodiesel mandates in Indonesia as well as firm import demand and expected a slowdown in output growth, while those for sunflower oil fell in the wake of bumper harvests in the Black Sea region.
The meat price rose 0.9%, driven by higher import demand for bovine and ovine meats, especially from China. Pig meat prices rose moderately, while those of poultry meat declined due to increased export availabilities.
The dairy price declined by 0.7% in October, as notably lower price quotations for cheese more than offset increases in those for skim and whole milk powders.
Lower cereal output forecast
FAO also lowered its forecast for global cereal production this year, linked to reduced prospects for coarse grains and wheat. Still, year-on-year, world cereal output is set to grow by 1.8% from 2018, according to the Cereal Supply and Demand Brief.