Prices of Cereals, Meat Dipped Global Food Prices by 1.0% in January

Gilbert Ekugbe

The Food and Agriculture Organisation’s (FAO) Food Price Index (FPI) has revealed that the decrease in prices of cereals and meat was responsible for the slight reduction of global food prices by 1.0 per cent in January 2024.

In a statement obtained from FAO’s website, its FPI, which tracks monthly changes in the international prices of a set of globally-traded food commodities, averaged 118 points in January, down by 1.0 per cent from December and 10.4 per cent from its corresponding value a year ago. 

FAO said that the benchmark for world food commodity prices fell further in January, albeit slightly, due to decreases in the prices of cereals and meat, which more than offset an increase in sugar prices.

The statement also said that the FAO’s Cereal Price Index declined by 2.2 per cent from the previous month while global wheat export prices declined in January driven by strong competition among exporters and the arrival of recently harvested supplies in the southern hemisphere countries.

It added that the prices of maize fell sharply, reflecting improved crop conditions and the start of the harvest in Argentina and larger supplies in the United States of America. “By contrast, price quotations for rice rose 1.2 per cent in January, reflecting a strong export demand for Thai and Pakistani higher quality Indica rice and additional purchases by Indonesia,” FAO said.

FAO’s Vegetable Oil Price Index rose marginally by 0.1 per cent from December, but however, was still 12.8 per cent lower than a year earlier – reflecting moderate increases in international palm and sunflower seed oil prices offsetting declines in the prices of soy and rapeseed oils.

The FAO pointed out that world palm oil prices were driven by seasonally lower production in major producing countries and concerns over unfavourable weather conditions in Malaysia.

Meanwhile, increased import demand slightly pushed up sunflower seed oil prices. By contrast, international soy and rapeseed oil prices declined on account of prospects for large supplies from South America and lingering ample availability in Europe, respectively.

While the FAO’s Dairy Price Index remained virtually unchanged from its revised December value, standing 17.8 per cent below its value a year ago, in January, international price quotations for butter and whole milk powder increased largely due to higher demand from Asian buyers, nearly offsetting declines in those for skim milk powder and cheese.

The FAO’s Meat Price Index declined for the seventh consecutive month by 1.4 per cent from December, as abundant supplies from leading exporting countries drove down international prices of poultry, bovine and pig meats.

“By contrast, international ovine meat prices increased on high global import demand and lower supplies of animals for slaughter in Oceania,” the UN food body noted.