FAO Reports New Drop in Food Prices

On Friday, a report from the Food and Agriculture Organization of the United Nations (FAO) said that the benchmark index for world food commodity prices declined in February of this year.

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A report released Friday by the agency's press office indicates that this downward trend has been maintained for the seventh consecutive month, due, among other causes, to the fact that lower prices of all major cereals more than offset the increase in sugar and meat prices.

This FAO food price index, which tracks monthly changes in the international prices of a set of globally traded food commodities, averaged 117.3 percentage points in February, down 0.7 percent from January 2024 and 10.5 points lower than in that month of the previous year.

In the case of FAO grains, that indicator declined by 5.0 percent to a level 22.4 percent lower than in February 2023, the analysis notes.

On the other hand, maize export prices showed the sharpest drop, due to expectations of large harvests in South America and low quotations offered by Ukraine.

International wheat prices decreased mainly due to Russia's strong export pace, while rice prices also fell during February by 1.6 percent.

The vegetable oil price index declined 1.3 percent from January, and was 11.0 percentage points below its February 2023 value.

As for soybean oil, international prices also fell sharply, due to prospects of abundant production in South America and ample exportable availabilities of sunflower and rapeseed oils in the world.

However, world palm oil prices rose marginally in February due to seasonally lower production.

Analysis of the sugar price index shows a 3.2 percent increase in February, which reflected lingering concerns about Brazil's upcoming production following a prolonged period of below-average rainfall, as well as expected production declines in Thailand and India.

The meat price index also increased 1.8 percent over January, with poultry prices rising the most, followed by cattle, while pork prices also increased slightly due to higher demand from China and supply shortages in Western Europe.

Finally, FAO's dairy price index rose 1.1 percent, as a result of higher demand for butter imports from Asian buyers, while prices of milk powder and cheese also rose slightly, the source added.