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Informist, Friday, Mar. 7, 2025

MUMBAI – The UN Food and Agriculture Organization's Food Price Index rose 1.6% on month to 127.1 points in February due to a jump in prices of sugar, dairy, and vegetable oils, the organisation said in a report. The index in February was 8.2% higher than a year ago, but 20.7% below its peak of 160.2 points touched in March 2022, as per the report.

The Sugar Price Index averaged 118.5 points in February, up 6.6% on month but 15.8% lower on year. Global sugar prices rose driven by concerns over tighter global supplies in the 2024-25 season. Declining production prospects in India and concerns over the impact of recent dry weather on the upcoming crop in Brazil, which exacerbated the seasonal effect, underpinned the increase in prices. Additionally, the strengthening of the Brazilian currency real against the dollar, which tends to affect exports from Brazil, further contributed to the overall increase in global sugar prices, according to the report.

The Vegetable Oil Price Index rose 2.0% on month to 156.0 points in February and 29.1% higher on year. The increase in the index was driven by higher quotations across palm, rapeseed, soy and sunflower oils. After a brief decline in January, international palm oil prices rebounded moderately and maintained their premiums over competing oils.

The increase was largely underpinned by seasonally lower outputs in southeast Asian producing countries and expectations of increased demand from the biodiesel industry in Indonesia. Meanwhile, global soyoil prices increased on firm global demand, particularly from the food sector. In the case of sunflower and rapeseed oils, prices were mainly supported by concerns over likely tightening supplies in the coming months, the organisation said.

The Meat Price Index was at 118.0 points in February, down 0.1% on month, driven by lower global ovine, porcine, and poultry meat prices, which outweighed increases in prices of bovine meat. On a yearly basis, the index was 4.8% higher. International poultry meat prices declined, driven by abundant global supplies primarily due to high export availabilities from Brazil, despite continuing avian influenza outbreaks in other major producing countries. Similarly, pig meat prices softened, pressured by lower quotations in the European Union, according to the report.

While prices showed signs of stabilisation, they remained below early January levels before the outbreak of foot and mouth disease due to a surplus caused by trade restrictions on German pig meat, it said. By contrast, ovine meat prices rose, underpinned by strong global demand. New Zealand's export volumes declined due to lower production, but higher slaughter rates in Australia raised supply, limiting the price increases. Meanwhile, bovine meat quotations strengthened, driven by rising Australian prices amid robust global demand, particularly from the US. However, the increase was partially offset by lower Brazilian bovine meat prices due to ample cattle supplies, the organisation said.

The Cereal Price Index averaged 112.6 points in February, up 0.7% on month but down 1.1% on year. Wheat export prices increased month-on-month, driven by tighter domestic supplies in the Russian Federation, which constrained export volumes and shifted demand to other suppliers, adding upward pressure on global prices, according to the report. Additional support to the price increases came from concerns over unfavourable crop conditions in parts of Europe, the Russian Federation, and the US.

World maize prices continued their upward trend in February, primarily due to tightening seasonal supplies in Brazil, worsening crop conditions in Argentina, and strong export demand for US maize. Among other coarse grains, world prices of barley and sorghum also increased. By contrast, the FAO all rice price index declined by 6.8% in February, as ample exportable supplies and weak import demand exerted downward pressure on prices.

The Dairy Price Index rose 4% on month and 23.2% on year to 148.7 points in February, the organisation said in its monthly report. The increase was driven by higher prices across all major dairy products. International cheese prices increased for the third consecutive month, rising by 4.7% from January. The rise was fueled by strong import demand, as recovering production in Europe was offset by seasonal output declines in Oceania.  End

Reported by Taniva Singha Roy

Edited by Ashish Shirke

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