The global Food Price Index witnessed a marginal fall as it dipped by 0.2% to 192.3 overall – with increasing prices for sugar and palm oil compensating for a drop in dairy and meat prices. The small drop in index score means that the food price index has fallen for five consecutive months, and is now at the lowest it has been since August 2010.
According to FAO senior economist Concepción Calpe such on-going decline in the index is "very good for food importing countries.”
The FAO's Food Price Index is a trade-weighted index that consists of the average of five commodity group price indices - cereals, meat, dairy products, vegetable oils, and sugar.
Balancing act
According to data, published by the UN Food and Agriculture Organisation (FAO), dairy prices fell by 1.9% in the past month, as butter and milk powder prices dipped due to increased output in Europe, where many producers are grappling with Russia's ban on cheese imports. Dairy products are now 26.6% cheaper than they were one year ago, said the FAO.
After several months of rising prices, October also saw meat prices dip in price. The FAO suggested that pig production has now recovered in several countries that were previously hit by endemic porcine diarrhoea, while growing cattle herds in Australia pushed down beef prices. While meat Price Index fell by 1.1% from the previous mont, it is still more than 10% above its level a year ago.
Sugar prices rose by 4.2% in the past month largely due to drought in parts of Brazil, leading to reports that the sugarcane crop will be smaller than expected. Despite the rise in price this month, international sugar prices remain more than 10% below their October 2013 level.
Meanwhile, the cost vegetable oils rose for the first time since March, with prices growing by 1% in the past month. A slowdown in the production of palm oil in Indonesia and Malaysia, combined with a revival in global import demand, sustained the increase, said the FAO.