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Informist, Friday, Aug 2, 2024

MUMBAI – The UN Food and Agriculture Organization's food price index moderated to 120.8 points in July from 121.0 a month ago as a decrease in the price index for cereals outweighed increases in the price indices for vegetable oil, meat products, and sugar. The dairy price index was almost unchanged in July.

The food price index in July was 3.1% lower than a year ago and 24.7% below its peak of 160.3 points touched in March 2022, FAO said in a report. 

The cereal price index averaged 110.8 points in July, down 3.8% from a month ago and 12.0% from a year ago, as the global export prices of all major cereals decreased for the second consecutive month. Increasing seasonal availability of wheat in the Northern Hemisphere and generally favourable conditions in Canada and the US increased expectations for large spring wheat harvests. Anticipation of an increase in wheat production weighed on global wheat prices, it said. 

Moreover, weak global demand amid an increase in availability and strong export competition also weighed on prices, the report said. Harvesting in Argentina and Brazil progressed ahead of last year’s pace, while crop condition ratings in the US remained above last year and average levels. Amongst other coarse grains, global prices of barley and sorghum also fell in July. The FAO Rice Price Index declined by 2.4% in July, as poor demand kept Indica and Japonica prices lower, the report said. 

The vegetable oil price index rose 2.4% on month to a one-and-a-half-year high of 135.0 points in July. Higher global quotations for palm, soy, sunflower and rapeseed oils kept the index high. Global palm oil prices rose slightly due to firm import demand amid output concerns from the world’s leading palm oil producer, Indonesia. 

Global soy oil prices appreciated for the third consecutive month in July, mainly due to robust demand from the biofuel sector in the Americas. The increase in international prices of sunflower and rapeseed oils was mainly aided by deteriorating crop prospects in several major producing countries for the 2024-25 season.

The dairy price index was largely steady from a month ago at 127.7 points in July, but was up 7.2% from a year ago, the agency said. A decrease in the index for milk powder nearly offset increases in those of butter and cheese. Global milk powder prices fell in July due to poor import demand, even after having tight inventories and lower milk production in Oceania.

On the other hand, global butter prices increased moderately for the tenth consecutive month, reflecting constrained exportable availability on solid internal sales, tight inventories and seasonally falling milk production. Meanwhile, world cheese prices increased slightly, primarily due to high internal sales in Western Europe, the report said.

The meat price index was at 119.5 points in July, up 1.2% from a month ago and 0.8% a year ago. In July, international ovine and bovine meat prices increased, principally underpinned by robust import demand and seasonally falling supplies of animals for slaughter in Oceania, the organisation said. Meanwhile, international poultry meat prices increased due to strong import demand, especially from the Near East and North Africa, amidst challenges to production stemming from animal diseases, especially avian influenza outbreaks in several major producing regions. 

The sugar price index rose 0.7% on month to 120.2 points in July, marking a second consecutive monthly increase driven by lower-than-expected sugar production in Brazil in the first half of the month, which offset the hopes of increased availability from improved monsoon rainfall in India and conducive weather conditions in Thailand. The sugar price index, however, was down 17.9% a year ago, the report said.

Lingering concerns over the impact of prolonged dry weather conditions on crop yields in Brazil in the coming months and recent increases in ethanol prices also supported global sugar prices, it said.  End

Reported by Taniva Singha Roy

Edited by Saji George Titus

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