November 9, 2015


Surge in dairy prices pushes world food prices up in October


Dairy and cereal price increases, among others, drove the FAO Food Price Index in October to go up to an average of nearly 162 points, or 3.9% more than in September. It was the sharpest increase since July 2012.


The highest price surge in three years, according to the Food and Agriculture Organisation, was mainly driven by a rise in dairy price quotations, along with those of sugar and vegetable.


Cereal prices increased modestly while those of meat remained stable. Still, food on international markets in October was 16% cheaper than a year ago.


The FAO dairy price index averaged 155.6 points in October, up 13.4 points, or 9.4%, from September as  concerns that milk output in New Zealand would fall during the current June-May dairy year caused Oceania prices to rise in September and October. Export prices from the EU followed suit although remaining below quotations in Oceania. Prices of whole milk powder surged by almost 21% over the month, with all the other dairy products also registering marked increases.


The FAO cereal price index averaged 157.4 points in October, up 2.6 points, or 1.7%, from September, largely led by an upturn in wheat and corn prices. Wheat quotations were higher, mostly on concerns about dryness affecting winter wheat in some countries and deteriorating production prospects in Australia. Corn prices strengthened, largely reflecting a slowdown in farmers' sales in the US, the world's largest corn producer and exporter.


The FAO meat price index averaged 168.8 points in October, essentially unchanged from September. Meat prices have been stable since March.  Of the meats covered, only ovine meat registered a substantial change, rising by 8% due to constrained export availability in Oceania.-Rick Alberto

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