The FAO Food Price Index fell in October

The FAO Food Price Index averaged 213 points in October 2012, down 2 points (1 percent) from September. The decline is largely due to reduced international prices of cereals and oils/fats which more than offset increases in sugar and dairy prices while meat values remained unchanged. Food prices averaged 8 percent lower during the first ten months of this year compared to the same period last year.

The FAO Cereal Price Index averaged 259 points in October, down 3 points (1.2 percent) from September mostly because of slightly lower wheat and maize prices. The small decline in wheat prices reflects reduced trade activity, while maize values were down mostly due to slowing demand from the livestock and industrial sectors. Rice quotations were mostly stable. Compared to October 2011, the FAO Cereal Price Index is 12 percent higher, mostly on a 16 percent increase in wheat and coarse grains, while rice quotations were down by almost 4 percent. The cereal price index is still 15 points (5.4 percent) below its peak of 274 points registered in April 2008.

The FAO Oils/Fats Price Index averaged 206 points in October, dropping 18 points (8 percent) from September, and reaching its lowest level in two years. The slide in prices mainly reflects continued abundance in palm oil output in Southeast Asia, combined with weak world import demand. Higher than expected export availabilities of soy, rape and sunflower seed oil, and a general slowdown in global consumption growth also contributed to cooling the market.

The FAO Meat Price Index averaged 174 points in October, unchanged from September. International prices of pigmeat have stabilized, as strong gains in Europe and Brazil compensated falling US quotations. Prices in the other meat markets also remain close to their September levels, as pressure from rising feed costs is being countered by sluggish import demand. Overall, meat prices between January and October were unchanged from the same period last year, although they retreated somewhat in the case of ovine and poultry meat.

The FAO Dairy Price Index averaged 194 points in October, up 6 points (3 percent) from September. Increases were recorded in all of the five dairy product groups, varying from 2.3 percent for skim milk powder and casein to 3.3 percent for whole milk powder and 4 percent for cheese. A seasonal tightening of supplies and low stocks, along with a firm world demand, are behind the stronger dairy quotations. However, prices for the ten first months of 2012 were sharply down compared to the very high levels witnessed in the same period in 2011.

The FAO Sugar Price Index averaged 288 points in October, up 4.5 points (1.6 percent) from September, and down 73 points (20.2 percent) from October last year. The recent increase in sugar quotations reflects short-term export tightness in Brazil, the world’s largest sugar exporter, but prospects of large overall availabilities in the current 2012/13 marketing season limited the gain.

All changes referred to in this text, in absolute or percentage terms, are calculated based on unrounded figures.

Source: FAO