Data from the Food and Agriculture Organization of the UN (FAO) shows that the benchmark for world food commodity prices declined marginally in August, as decreases in quotations for sugar, meat and cereals outweighed increases in those for vegetable oils and dairy products.
The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally traded food commodities, averaged 120.7 points in August, slightly down from its revised July figure and 1.1% below its corresponding value in August 2023.
The FAO Cereal Price Index dropped by 0.5% from July, driven by lower global wheat export prices amid competitively priced Black Sea supplies and higher-than-expected production in Argentina and the US. Meantime, world maize prices firmed slightly, reflecting the impact of heatwaves on yields in parts of Europe and North America, while the FAO All-Rice Price Index increased by 0.6%, as quotations for non-Indica varieties increased under the influence of seasonal tightness and currency appreciations of some exporting countries against the US dollar.
The FAO Vegetable Oil Price Index rose by 0.8% from July to reach a 20-month high, as increases in international palm oil prices more than offset declining quotations for soy, sunflower and rapeseed oils.
The FAO Dairy Price Index also rose, increasing 2.2% in August. Whole milk powder increased, driven by a surge in import demand for spot supplies. International cheese prices also climbed due to higher global import demand, while international butter quotations reached an all-time high fueled by increased uncertainty over the adequacy of milk supplies in Western Europe.
The FAO Meat Price Index declined by 0.7% from July, with poultry, pig, and ovine meat prices all down amid lacklustre import demand, even as world bovine meat prices increased slightly.
The FAO Sugar Price Index declined by 4.7% in August to reach its lowest level since October 2022. The drop was underpinned by an improved production outlook for the upcoming sugarcane harvests in India and Thailand, as well as lower international crude oil prices. However, concerns about the impact of fires on sugarcane fields in key growing areas of Brazil led to sharp sugar price increases in late August.
