FAO Food Price Index fell in April 2014

The FAO Food Price Index averaged 209.3 points in April 2014, down 3.5 points, or 1.6 percent, from March and 7.6 points, or 3.5 percent, below April 2013. Last month’s decline was mostly caused by a sharp drop of dairy prices, although sugar and vegetable oil also fell. By contrast, cereals and meat prices firmed slightly.

The FAO Cereal Price Index averaged 206.9 points in April, up only 1 point (or 0.5 percent) from March but still 24 points (or 10.3 percent) below its value in April 2013. The monthly increase was less pronounced than those registered in February and March, as weather conditions improved in the United States and tensions in Ukraine had little effect on the country’s pace of grain shipments. Rice prices tended to weaken in the various market segments, with the exception of aromatic rice varieties, where they remained stable.

The FAO Vegetable Oil Price Index averaged 199 points in April, down 6 points (or 2.8 percent) from March. The slide in the index is driven by palm oil, whose values dropped following reports of lower than anticipated import demand, most notably from the European Union. Furthermore, Malaysia's exports have been hit by the persistent strength of the country's currency. Soybean oil prices, on the other hand, appreciated slightly as the market responded to the lingering tightness in global soybean supplies.

The FAO Dairy Price Index averaged 251.5 points in April, a sharp fall of 17 points, or 6.9 percent, over March. The market of all dairy products has been affected by reduced purchases by China (the main importer of Whole Milk Powder and second largest importer of Skimmed Milk Powder) and the Russian Federation (the main importer of butter). Additionally, an extended season in New Zealand and a good start to the dairy-year in the northern-hemisphere have meant that supplies for export have increased. Prices of all dairy commodities subsided, but particularly butter and milk powder.

The FAO Meat Price Index averaged 185.8 points in April, 0.8 points, or 0.4 percent, above March. The marginal increase was a result of stronger prices for pigmeat, in part on concerns over the effect of Porcine Epidemic Diarrhea virus on export supplies in the United States. Although little changed, bovine meat prices are close to historic highs, due to dry weather conditions affecting production in Australia and the United States. Prices of poultry and ovine meat were also stable.

The FAO Sugar Price Index averaged 249.9 points in April, down 4.1 points, or 1.6 percent, from March. Prices declined amid reports of large sugar availabilities in the main producing regions, including Thailand, India, and Australia. Generally Dry weather in most producing countries, which should boost the sucrose level, also weighed on prices.