The FAO Food Price Index rose in April 2019

The FAO Food Price Index (FFPI) rose in April 2019 to around 170 points, 1.5 percent (2.5 points) higher than in March and marking its highest value since June 2018. At this level, the FFPI would still remain 2.3 percent below its level in the corresponding month last year.

Except for the sub-index for cereals, all the other sub-indices firmed in April, led by dairy and meat, and to a lesser extent vegetable oils and sugar.

The FAO Cereal Price Index averaged 160 points in April, down 2.8 percent (4.7 points) from March and 5 percent below its April 2018 value. The sub-index fell for the fourth consecutive month, pressured by large export availabilities and slowing trade.

Among the cereals, wheat prices fell the most in April, influenced by prospects for a strong rebound in the 2019 production, amid large exportable supplies. Maize prices were also lower, mostly because of expectations of larger South American crops. By contrast, FAO's rice price index was generally stable in April, amid diverging trends across the various market segments and origins.

The FAO Vegetable Oil Price Index averaged 128.7 points in April, up 1.1 points (or 0.9 percent) from the previous month. The rise mainly reflects slight increases in palm and soybean oil values. International palm oil price quotations rebounded somewhat on rising global import demand, combined with inventory drawdowns in major exporting countries.

Soyoil prices, on the other hand, notched up, underpinned primarily by robust domestic demand in the United States stemming from both the biodiesel and food sectors. Firming crude oil values also lent support to international vegetable oil prices.

The FAO Dairy Price Index averaged 215 points in April, up 10.7 points (5.2 percent) from March, representing the fourth consecutive month of increase. In April, international price quotations for butter, Whole Milk Powder (WMP) and cheese rose, as global import demand continued to be robust in anticipation of a further tightening in export availabilities from Oceania with dry weather conditions reinforcing the seasonal milk production drop.

By contrast, Skim Milk Powder (SMP) prices slipped for a second consecutive month from the February high, underpinned by continued slowdown in demand.

The FAO Meat Price Index averaged just over 169 points in April, up 4.9 points (3.0 percent) from March, with month-on-month price quotation increases registered for pig and bovine meats and, more moderately, for poultry and ovine meats.

International price quotations of pig meat rose sharply due to a surge in import demand in Asia, primarily in China, caused by a sharp fall in the country’s pig meat production associated with the rapid spread of the African Swine Fever. Bovine, poultry and ovine meat prices all firmed reflecting an overall tightening of global meat markets.

The FAO Sugar Price Index averaged 181.7 points in April 2019, up almost 1.4 points (0.8 percent) from March and now 3.2 percent above its April 2018 value. The latest rise in international sugar prices was largely driven by firmer crude oil prices.

Stronger energy prices lend support to international sugar prices by affecting Brazilian sugar exports to the world market, as higher energy prices encourage producers to process sugarcane into ethanol for local sale. On the other hand, the continued weakness of the Brazilian Real against the United States dollar capped the extent of the increase in international sugar price quotations.