The food price index of the Food and Agriculture Organisation of the United Nations (FAO) has fallen for the sixth consecutive month, with vegetable oil quotations far offsetting higher cereal prices.
A sharp 6.6% drop in the vegetable oil price index, which reached its lowest level since February last year, saw lower prices for palm, soy, sunflower and rapeseed oils last month.
The cereal price index rose by 1.5% as international wheat prices rebounded by 2.2%, linked to high EU exports amid stark internal demand and uncertainty about the continuation of the Black Sea Grain Initiative.
While the food price index, which tracks monthly changes in international food commodity prices, has fallen by 1.1% to 136.3 points within one month, the index in September remains 5.5% higher than in 2021.
Dairy and meat price index
The FAO dairy price index fell by 0.6% in September, which to a great extent reflected the impact of the weaker euro versus the US dollar, along with market uncertainties and bleak global economic growth prospects, the FAO said.
Within one month, the meat price index dropped by 0.5%, due to lower world bovine meat prices and elevated cattle liquidation in some producing countries, while poultry meat prices declined due to lower import demand.
Global pigmeat prices, however rose due to a supply shortfall of ready-to-slaughter animals in the EU, according to the FAO Food Price Index for September 2022.
The latest index also shows that maize prices were mostly stable, and the indices for rice and sugar recorded a 2.2% rise and 0.7% drop respectively.
Cereal production forecast
The latest Cereal Supply and Demand Brief by the FAO, which further lowered the global cereal production forecast for 2022, now pegged at 2.77 billion tonnes – 1.7% below the 2021 outturn.
The FAO’s global wheat production forecast was also raised to 787 million tonnes, which is on track to mark a record high due to better-than-expected yields in the EU and Russia.
World cereal utilisation over the 2022/2023 period is now forecast to decline by 0.5% from the previous season to 2.78 billion tonnes, with the reduction mostly reflecting reduced feed use.
World cereal stocks at the close of the 2023 seasons are forecast to contract by 1.6% below their opening levels, down to 848 million tonnes, while the world cereals stocks-to-use ratio is expected to drop to 29.7% in 2022/2023, the FAO said.