Food market in Japan. World food prices continue to decline Economic development
The global food price index fell in January. The figure has been falling for five months in a row. This is evidenced by data published on Friday by the UN Food and Agriculture Organization (FAO). The decline was mainly due to a decrease in prices for dairy products, sugar and meat.
The average value is 0.4 percent lower than the December level and 0.6 percent lower than the year-ago level. At the same time, the dynamics for individual categories turned out to be multidirectional.
Cereal prices
The FAO grain index rose 0.2 percent, despite a slight decline in world prices for wheat and corn. Large wheat reserves offset weather risks for winter crops in Russia and the United States, while corn offset the impact of unfavorable weather in Argentina and Brazil and increased demand for ethanol in the United States. The rice price index increased by 1.8 percent.
Vegetable oil quotes
The price index for vegetable oils increased by 2.1 percent. Global palm oil prices rose due to seasonal declines in production in Southeast Asia and strong import demand, while soybean oil rose in price due to reduced export supplies from South America and expectations of high demand for biofuels in the United States.
Sunflower oil has also become more expensive due to limited supply in the Black Sea region. At the same time, rapeseed oil prices have fallen due to significant imports into the European Union.
Cost of meat
The meat price index decreased by 0.4 percent. The decline was driven by low pork prices due to ample global supply and weak demand. Poultry prices, on the contrary, have increased, mainly due to higher prices for products in Brazil, where export demand remains high.
Beef and lamb prices remained stable: an increase in supplies from Brazil to China compensated for the rapid filling of the duty-free quota by the United States.
Prices for dairy products
The price index for dairy products decreased by five percent. Cheese and butter fell in price the most, thanks to sufficient supply volumes. At the same time, prices for skim milk powder increased amid renewed demand from the Middle East, North Africa and certain regions of Asia.
The cost of sugar
Sugar prices fell by one percent. FAO attributes this to expectations for global supply growth this season, driven by a recovery in production in India, a favorable outlook for Thailand and positive developments in Brazil.
Cereal production forecast
In parallel, FAO published an updated forecast of world cereal production. The total volume is expected to reach 3.023 billion tons, a record high.
The upward revision of the forecast is due to higher-than-expected wheat harvests in Argentina, Canada and the EU, as well as expansion of corn plantings and higher yields in China and the United States. Rice production will also increase, primarily in India, Bangladesh, Brazil, China and Indonesia.