Global prices for all dairy products dropped for the eight month in a row in August with whole milk powder prices showing the biggest decline, according to a new report from the Food and Agriculture Organisation of the United Nations (FAO).
The FAO’s latest Food Price Index, which is a measure of the monthly change in international prices for a basket of food commodities, fell overall last month.
The drop reflected a decline in the price indices for dairy products, vegetable oils, meat and cereals.
The Food Price Index averaged 121.4 points in August 2023, down 2.6 points (2.1%) from July but the FAO Dairy Price Index was down 4.6 points (4%) from July to 111.3 points.
According to the latest UN report the drop in the price of dairy products was “influenced by abundant supplies especially from Oceania (New Zealand/Australia) amid seasonally rising production, together with a slowdown in the pace of imports by China”.
The report also detailed that “skim milk powder prices fell to their lowest level since mid 2020 due to subdued import demand and the lacklustre market activities associated with the summer holidays in Europe”.
According to the latest FAO index, international butter and cheese prices also dropped.
But so did international meat prices which the FAO with the biggest drop recorded in sheep meat mainly because of a surge in exports from Australia and weaker demand from China.
World poultry meat prices fell in August because of “abundant supplies, especially from Brazil”.
Meanwhile, bovine meat prices fell moderately due to “ample supplies of slaughter ready cattle in several leading producer countries”.
Although the latest FAO Food Price Index mainly shows a decline in the international prices of globally trade food commodities there were some exceptions as both the price of sugar and rice increased.
In relation to sugar the report highlighted that “the increase was mainly triggered by heightened concerns over the impact of the El Niño phenomenon on sugarcane crops, along with below-average rains in August and persistent dry weather conditions in Thailand”.
However, the rise in the FAO All Rice Price Index – by 9.8% from July – to hit a 15-year high reflected trade disruptions in the aftermath of a ban on white rice exports by India, the world’s largest rice exporter.