The global benchmark for food prices was down by 0.5% in October when compared to the previous month due to lower quotations for rice, wheat, palm oil and pig meat.
The Food and Agriculture Organization of the United Nations (FAO) Food Price Index averaged 120.6 points in October, down almost 11% from its corresponding value a year earlier.
The index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, shows that dairy products rebounded last month.
Food Price Index
The FAO Cereal Price Index averaged 125 points in October, down 1% from September and by nearly 18% from its value a year ago.
International wheat prices fell by 1.9% in October, reflecting generally higher-than-earlier-anticipated supplies in the US and strong competition among exporters.
However, the FAO noted that international prices of coarse grains firmed marginally, increasing by 0.6% month-on-month.
Lower maize supplies in Argentina put upward pressure on prices, but this was offset by higher supplies in the US and Brazil. The FAO said that international rice prices were up 2%.
The FAO Vegetable Oil Price Index decreased by 0.7 % when compared to September.
The marginal fall in the price index chiefly reflected lower world palm oil prices, more than offsetting higher prices of soy, sunflower and rapeseed oils.
Soy oil prices rose owing to a robust demand from the biodiesel sector, particularly in the US.
There was a month-on-month drop of 2.2% in the FAO Sugar Price Index, but it still remained 46.6% above October 2022.
“The October decline was mainly driven by a strong pace of production in Brazil, although concerns over a tighter global supply outlook in the year ahead capped the drop,” FAO said.
The FAO Meat Price Index dropped by 0.6% in October, marking the fourth consecutive monthly decline. The index is also down by 3.4% on October 2022.
Pig meat prices fell for the third consecutive month, driven by the “persistently sluggish import demand”, especially from some Asian countries, and high supply.
There were marginal increases in the prices of poultry, beef and sheep meat driven by robust demand from exporters and consumers.
The FAO Dairy Price Index increased by 2.2% in October, ending a nine-month decline. However, this index is still 20% lower than it value a year ago.
The most significant price increase was in milk powder, driven by import demand, as well as uncertainty over the impact of the El Nino weather conditions on milk production in Oceania and tight milk supplies in Western Europe.
Butter prices also rose due to increased retail sales ahead of the winter holidays in Europe and higher import demand from northeast Asia.
Cheese prices dipped slightly due to increased supplies in Oceania and the weakening of the Euro against the US dollar.
FAO cereal outlook
Meanwhile, FAO today (Friday, November 3) maintained its forecast for world cereal production in 2023 at 2,819 million tonnes, a record high.
Some changes were made to country level figures, including higher coarse grain production in China and west Africa and lower forecasts for the US and EU.
Wheat output forecasts were raised for Iraq and the US and revised downward for the European Union and Kazakhstan. World rice production in 2023/24 is forecast to increase marginally year on year.
World cereal utilisation in 2023/24 is forecast to reach 2,810 million tonnes, with the total utilisation of both wheat and coarse grains set to surpass the 2022/23 levels while that of rice expected to stagnate at the previous season’s level.
The world cereals stocks-to-use ratio for 2023/24 is forecast to stand at 30.7%, which the FAO said is “a comfortable supply situation from a historical perspective”.
Global trade in cereals in 2023/24 is forecast at 469 million tonnes, a 1.6% contraction from the preceding year.
Food security
The FAO also noted that conflicts and weak currencies are impacting food security and prices in vulnerable countries.
The FAO’s Global Information and Early Warning System (GIEWS) notes that 46 countries, including 33 in Africa, are assessed to need external assistance for food.
“More than half the residents of the Gaza Strip were estimated to be in acute food insecurity already in 2022, and escalation of the conflict there will increase humanitarian and emergency assistance needs even as access to the affected areas remains an alarming concern,” FAO said.