FAO food price index decreased by 0.5% in October
In October, the average value of the FAO Food Price Index decreased compared to September by 0.7 p or 0.5% to 120.6 p, which is 10.9% or 14.8 p lower than in October 2022. Decrease in sugar prices , grain, vegetable oils and meat was partially offset by higher prices for dairy products.
The average value of the FAO Cereal Price Index decreased by 1.3 p or 1% from September to 125 p, which is 17.9% or 27.3 p lower than in October 2023. World wheat prices fell by 1.9 % due to higher-than-expected US supply and increased competition among exporters. World feed prices rose by 0.6% on the background of reduced corn supply in Argentina. Sorghum prices rose, and barley prices fell. World rice prices fell by 2% amid weak import demand.
The average value of the FAO Vegetable Oil Price Index decreased by 0.9 p or 0.7% to 120 p, which is 31.3 p or 20.7% lower than in October 2023. The increase in prices for soybean, sunflower and rapeseed oil did not offset the fall in palm oil prices under the pressure of a seasonal increase in production and reduced import demand. Soybean oil rose in price against the background of increased demand from biodiesel producers, rapeseed oil - against the background of deteriorating conditions in Canada, and sunflower oil - against the background of increased purchases by importers.
The average value of the FAO Dairy Price Index rose by 2.4p or 2.2% to 111.3p after a 9-month decline, which is still 28p or 20.1% lower than in October 2023. Prices rose the most for milk powder against the background of increased demand from the countries of North-East Asia. Prices were also supported by a shortage of milk supplies in Europe and the uncertain impact of the El Niño phenomenon on production in Oceania. Butter prices rose ahead of the winter holidays in Western Europe and amid increased import demand from Northeast Asia. At the same time, cheese prices fell against the background of a decrease in the exchange rate of the euro against the dollar and an increase in exports by the countries of Oceania.
The average value of the FAO Meat Price Index decreased (for the fourth month in a row) by 0.7 p or 0.6% to 112.9 p, which is 3.9 p or 3.4% lower than in October 2023. Prices pork is under pressure from low demand in East Asian countries and significant volumes of offers from some exporters. Poultry prices rose amid bird flu outbreaks and high demand, while beef and lamb prices rose amid rising import demand.
The average value of the FAO Sugar Price Index, after a 2-month rise, fell by 3.5p or 2.2% to 159.2p (which is 50.6p or 46.6% higher than in October 2022) against the background of increased production and the fall in the real exchange rate and ethanol prices in Brazil. However, prices were supported by forecasts of sugar shortages in FY 2023/24 and logistical problems with supplies from Brazil.
