Global Food Price Index unchanged during February 2016

The FAO Food Price Index (FFPI) averaged 150.2 points in February 2016, nearly unchanged from January, but 25.6 points (14.5 percent) below February 2015.

The most outstanding development last month was a surge in vegetable oil quotations, which, along with a small recovery in meat prices, more than offset declining cereal, sugar and dairy prices.

The FAO Cereal Price Index averaged 148.3 points in February, marginally down from January and 13.7 percent less than one year ago. Among the major cereals, wheat prices fell most, subsiding 1.5 percent, influenced by slow trade activity and expectations of continued large export supplies for the remainder of the marketing season. Maize quotations were only marginally lower, sustained by large purchases by a number of countries. On the other hand, rice prices firmed slightly compared to last month, underpinned by stronger Japonica rice quotations.

The FAO Vegetable Oil Price Index averaged 150.3 points in February, up as much as 11.2 points (or 8 percent) from January and the highest value since June 2015. The upswing was led by palm oil, which appreciated by 13 percent on reports of falling inventories in Southeast Asia, combined with poor prospects for production in the coming months. Soy oil prices also firmed, on the expectation that poor supplies of palm and other vegetable oils would boost global demand for soy oil.

The FAO Dairy Price Index averaged 142 points in February, down 3.1 points (2.1 percent) from January. Lacklustre import demand, especially by China, and ample availability of supplies for export resulted in milk product prices falling across the board. Additionally, some importers limited purchases for stocks replenishment, as the market was perceived as being well-supplied for immediate and short-term needs. This sentiment was re-enforced by a rise in sales of SMP to intervention stocks in the EU.

The FAO Meat Price Index averaged 148.2 points in February, up marginally from its January revised value. For the different categories of meat, prices for bovine meat and pigmeat rose, whereas those of poultry and ovine meat fell. Bovine meat quotations moved higher, on the basis of constricted supplies in both Australia and the United States, while EU pigmeat prices continued to be underpinned by the opening of aid to private storage. Sheepmeat prices dipped for the fourth consecutive month, a reflection of seasonally peaking supplies from Oceania. Finally, the poultry industry continued to benefit from lower feed prices, a factor that has contributed to quotations falling each month since June last year.

The FAO Sugar Price Index averaged 187.1 points in February, down 12.3 points (6.2 percent) from January, marking the second consecutive monthly decline after four months of steady rises. The decrease mainly mirrored better than expected crop conditions in Brazil, the world´s leading sugar producer and exporter. Prospects for a larger world sugar production decline than earlier anticipated did not reverse the price fall, amid comfortable global sugar inventories.