World wheat, maize, dairy and beef prices all fell in November, influenced by a combination of the Black Sea Grain Initiative and an increase in Australian and Brazilian exports, according to an international food price tracker.
The Food and Agriculture Organisation of the United Nations (FAO), which tracks monthly changes in a basket of commonly purchased commodities, has reported that its food price index is now only 0.3% higher than it was a year ago.
The organisation measured it at an average of 135.7 points, which is “only a fraction lower than in October”.
It stated that the declining international prices of cereals, meat and dairy products offset the increasing quotations for vegetable oils and sugar, meaning that food prices remained steady overall last month.
Decrease in food prices
The FAO Cereal Price Index declined by 1.3% in November, as both wheat and maize prices fell, partially due to the extension of the Black Sea Grain initiative in Ukraine. However, this change was less noticeable in the overall index due to a 2.3% increase in world rice prices.
The price index for dairy also decreased, falling by 1.2% over the month. However, similar to cereals, not every product within this category saw a price reduction.
World quotations for butter, skim milk powders and whole milk powders fell amid lower demand, but cheese prices increased, which can be attributed to less availability in leading producers, the FAO stated.
Finally, the FAO’s Meat Price Index was 0.9% lower in November than in October due to significant shifts in the price of bovine meat.
This price drop is due to “increased export supplies from Australia, added to already high supplies from Brazil, notwithstanding China’s continuing, strong import demand”, according to the FAO.
Increase in food prices
In contrast to the above food groups, the FAO’s Vegetable Oil Price Index and Sugar Price Index both rose by 2.3% and 5.2% respectively.
The FAO outlined that harvest delays in key producing countries coupled with the announcement of a lower sugar export quota by India led to tight, global sugar supplies.
Strong buying during this trend, as well as high ethanol prices in Brazil put pressure on world prices, pushing up the index.