FAO Announces Decrease In Global Food Prices For August

FAO Announces Decrease In Global Food Prices For August

The Food and Agriculture Organization (FAO) reported on Friday that global food commodity prices saw a slight decline in August. This decrease was mainly driven by lower prices for sugar, meat, and cereals, which offset increases in vegetable oils and dairy products…….CONTINUE READING

The FAO Food Price Index, which monitors monthly changes in international prices for a basket of widely traded food commodities, averaged 120.7 points in August. This reflects a minor decrease from the revised July figure and is 1.1 percent below the index’s value in August 2023.

According to the FAO, the Cereal Price Index fell by 0.5 percent from July, influenced by lower global wheat export prices due to competitive Black Sea supplies and higher-than-expected production in Argentina and the United States. Conversely, maize prices rose slightly due to heatwaves affecting yields in Europe and North America. The FAO All-Rice Price Index increased by 0.6 percent, driven by higher prices for non-Indica varieties due to seasonal tightness and currency fluctuations.

The FAO Vegetable Oil Price Index rose by 0.8 percent from July, reaching a 20-month high. This increase was led by rising international palm oil prices, despite lower quotations for soy, sunflower, and rapeseed oils. The Dairy Price Index also saw a rise of 2.2 percent in August, with whole milk powder prices increasing due to higher import demand and global cheese prices climbing as a result of stronger import demand. Butter prices hit an all-time high due to concerns about milk supply adequacy in Western Europe.

In contrast, the FAO Meat Price Index dropped by 0.7 percent from July, with lower prices for poultry, pig, and ovine meats driven by weak import demand, while world bovine meat prices saw a slight increase. The FAO Sugar Price Index decreased by 4.7 percent in August, reaching its lowest level since October 2022. This drop was supported by a better production outlook for sugarcane in India and Thailand and lower international crude oil prices, though concerns over fires in Brazil’s sugarcane fields caused a late August price spike.

The FAO also revised its global cereal production forecast for 2024 to 2,851 million tonnes, nearly matching 2023 levels. The updated Cereal Supply and Demand Brief highlights reduced harvest expectations for coarse grains like maize due to adverse weather conditions in key regions. However, forecasts for global wheat and rice production have been raised, with rice expected to reach an all-time high of 537 million tonnes. Global cereal utilization for 2024/25 is projected to rise to 2,852 million tonnes, a 0.2 percent increase from 2023/24.

World cereal stocks are expected to grow by 1.2 percent by the end of the 2025 seasons, with a global cereal stocks-to-use ratio of 30.7 percent. International trade in total cereals is projected at 485.6 million tonnes, marking a 3.3 percent decline from 2023/24, largely due to reduced volumes in coarse grains.