Global Food Prices Fall for 10 Consecutive Months... Dairy Products and Sugar Prices Decline

[Asia Economy Sejong=Reporter Kim Hyewon] Global food prices have continued to decline for the 10th consecutive month.

According to the Ministry of Agriculture, Food and Rural Affairs on the 4th, the Food Price Index released last month by the United Nations Food and Agriculture Organization (FAO) stood at 131.2, down 0.8% from the previous month (132.2).

The Food Price Index has been on a downward trend for 10 months since peaking at 159.7 in March last year. The FAO surveys international price trends for 24 items and compiles and announces monthly food price indices by five commodity groups: cereals, oils, meat, dairy products, and sugar. The index is expressed by comparing prices to the average price from 2014 to 2016, set at 100.

Among the five commodity groups, prices of oils, meat, dairy products, and sugar fell. The oils price index dropped 2.9% from the previous month (144.6) to 140.4. Palm oil prices fell as major importers secured large inventories, weakening demand. Canola oil and sunflower oil prices also declined due to sufficient supply.

The meat price index decreased 0.1% from the previous month (113.7) to 113.6. Beef prices fell due to increased supply from Australia and New Zealand, and pork prices declined as supply was ample and China’s import demand was weaker than expected. Poultry prices dropped despite the spread of avian influenza, as exportable volumes increased.

The dairy price index fell 1.4% from the previous month (138.2) to 136.2. Butter prices declined due to increased supply from Australia and New Zealand. Whole milk powder and skimmed milk powder prices also dropped due to weakened demand. However, cheese prices rose as demand for dining out and retail recovered in Western Europe during the New Year holidays.

The sugar price index decreased 1.1% from the previous month (117.2) to 115.8. This was mainly due to smooth harvesting in Thailand and improved production conditions in Brazil. On the other hand, the cereals price index rose 0.1% from the previous month (147.3) to 147.4. Corn and rice prices increased due to rising demand, while wheat prices fell as production exceeded expectations in Australia and Russia.