The November FAO Food Price Index nearly unchanged from October

The FAO Food Price Index (FFPI) averaged 215 points in November 2011, marginally (1 point) down  from October and 10 percent (23 points) below its February 2011 peak. Among the various commodities, a recovery of oils quotations compensated for a decline in sugar, while prices of the other commodity groups were little changed.  At its current value, the FFPI is only 1 percent (2 points) above its level in November 2010.

  The FAO Cereal Price Index averaged 228 points in November,  down 1 percent (3 points) from October. The small decline was mainly on account of wheat, which lost 3 percent (6 points) following a marked upgrade of world supplies, mostly driven by larger output and stocks in the Russian Federation. Rice export prices were down slightly too but coarse grain prices were almost unchanged in November after sliding for two months. 

The FAO Oils/Fats Price Index increased to 235 points in November, up 5 percent (11 point) from October, reversing  the downward trend that had persisted since March. Markets responded to a prospective tightening of global supply and demand for vegetable oils. In particular, the recent rise in prices reflects concerns about the anticipated slowdown in palm oil and soyoil output, increased absorption of vegetable oils by the biodiesel industry and rising import demand by China and other players.  

The FAO Meat Price Index averaged 177 points in November, virtually unchanged from October.  Pig meat prices were the only ones recording an increase of significance, in the order of 2 percent (3 points), while poultry, bovine and sheep meat prices were little changed. Nonetheless, meat prices this year continue to be well above the levels seen in 2010, averaging 17 percent higher from January to November compared with the same period in 2010, with particular strength characterizing the bovine and sheep meat markets.

The FAO Dairy Price Index averaged 201 points in November, down 1 percent ( 3 points) from October. The decline reflects a weakening of butter and cheese prices, which lost  6 percent and 2 percent respectively, while skim milk powder, whole milk powder and casein prices registered gains in the order of 2-3 percent. From January to October, dairy prices have consistently exceeded their corresponding monthly levels in 2010. However, in November, prices were about 3 percent lower than a year ago, amid a recovery of supplies in Oceania and South America.

The FAO Sugar Price Index averaged 340 points in November, down 6 percent (21 points) from October and 15 percent  (60 points) from its July 2011 peak. The decline largely reflects expectations of a large global production surplus over the next twelve months, on the back of good harvests in India, the EU, Thailand and the Russian Federation.