Higher international quotations for vegetable oils, dairy products and meat have more than offset lower quotations for cereals and sugar last month.
This is according to the latest Food Price Index by the Food and Agriculture Organisation of the United Nations (FAO), which tracks changes in world food commodity prices.
The index rose by 1.1% last month to an average of 118.3 points. While this is the first increase in seven months, the index remains 7.7% below its corresponding value in 2023.
Dairy and meat
The index for world dairy prices increased for the sixth consecutive month by 2.9% in March led by rising cheese and butter prices. However, the index remains 8.2% below its 2023 value.
World cheese prices rose the most reflecting the steady import demand from Asia, higher internal sales in western Europe, and seasonally falling production in Oceania.
Despite softer Asian demand, international butter prices increased further last month mainly due to solid seasonal demand and somewhat tighter European stocks.
After five months of consecutive increases, international whole milk powder prices dropped. Skim milk powder prices also fell as markets remained quiet with lower spot demand.
Higher international quotations for meat were reflected by a 1.7% increase in the meat price index on February, with rises in the prices for poultry, pig and bovine meats.
The meat price index recorded the second consecutive monthly increase and now stands 1.5% below its corresponding value for March 2023, according to the FAO.
Steady import demand saw poultry prices rise despite ample supplies mostly sustained by reduced avian influenza (bird flu) outbreaks in major producing countries.
Pigmeat prices also increased mainly reflecting higher internal demand ahead of the Easter holidays despite increased supplies, especially in western Europe.
Increased purchases by leading importing countries led to a rise in bovine meat prices. Ovine meat prices fell due to a surge in supplies exceeding seasonal levels, especially from Australia.
FAO Food Price Index
International quotations for vegetable oils led the overall increase with the sub-index up by 8.0% from the previous month. Prices for palm, soy, sunflower and rapeseed oils all rose.
World palm oil prices increased due to seasonally lower outputs in leading producing countries and firm domestic demand in Southeast Asia, the food price index shows.
International quotations for soyoil recovered from multi-year lows last month, which was boosted by robust demand from the biofuel sector, particularly in Brazil and the US.
By contrast, the cereal price index declined by 2.6% and now stands 20% below its March 2023 value, which was led by a decline in global wheat export prices, the FAO said.
Export prices fell due to ongoing strong export competition – underscored by cancelled purchases by China – among the EU, Russia and the US, according to the FAO.
Maize export prices edged upwards last month, which was partly due to logistical difficulties in Ukraine. The rice Index fell by 1.7% amid subdued global import demand.
The index for sugar prices was down by 5.4% mainly due to an upward revision to the 2023/2024 production forecast in India, and the improved pace of the harvest in Thailand.