World Food Commodity Prices Dipped by 0.5% in October

Gilbert Ekugbe

The latest United Nations Food and Agriculture Organisation’s (FAO’s) food price index has revealed that world food commodity prices declined moderately in October, down by 0.5 percent from September with the index for dairy products the only one to rise.

The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, added that food price averaged 120.6 points in October, down 10.9 percent from its corresponding value a year earlier.

In a statement obtained from its website, the FAO Cereal Price Index declined by 1.0 per cent from the previous month as international rice prices dropped by 2.0 percent amid generally passive global import demand while the index of wheat dropped by 1.9 percent, weighed on by strong supplies from the United States of America and strong competition among exporters.

The FAO Vegetable Oil Price Index decreased by 0.7 percent from September, as lower world palm oil prices, due to seasonally higher outputs and subdued global import demand, more than offset higher prices for soy, sunflower and rapeseed oils while soy oil prices rose owing to a robust demand from the biodiesel sector.

The FAO Sugar Price Index declined by 2.2 percent but remained 46.6 percent above its year-earlier level.

In a contrasting trend, the FAO Dairy Price Index rose by 2.2 percent in October, ending a nine-month decline. World milk powder prices increased the most on the back of surging import demand for both near and longer-term supplies as well as some uncertainty over the impact of the El Niño weather conditions on the upcoming milk production in Oceania.

In a new cereal supply and demand brief, FAO maintained its forecast for world cereal production in 2023 at 2 819 million tonnes, a record high.

Some adjustments were made to country-level figures, notably higher coarse grain production in China and most of West Africa and lower forecasts for the United States of America and the European Union.

Wheat output forecasts were raised for Iraq and the United States of America and revised downward for the European Union and Kazakhstan. World rice production in 2023/24 is forecast to increase marginally year on year.

The new revisions include an upgrade to India’s production, more than offsetting various other revisions, particularly a further downgrade of Indonesian production prospects.