Commodities Buzz: FAO Food Price Index Sees Sustained Drop

10 Oct 2022 , 03:02 PM

The FAO Food Price Index (FFPI) averaged 136.3 points in September 2022, down 1.5 points (1.1 percent) from August, marking the sixth monthly decline in a row. The FFPIs decline in September was driven by a sharp fall in the international prices of vegetable oils and moderate decreases in those of sugar, meat and dairy products, more than offsetting a rebound in the cereal price sub-index. Despite the new decline, the FFPI remained 7.2 points (5.5 percent) above its value in the corresponding month last year. The FAO Cereal Price Index averaged 147.8 points in September, up 2.2 points (1.5 percent) from August and 14.9 points (11.2 percent) above its September 2021 value. In September, international wheat prices rebounded by 2.2 percent, underpinned by heightened uncertainty about the Black Sea Grain Initiatives continuation beyond November and the potential impact on Ukraines exports. Moreover, concerns regarding dry conditions in Argentina and the United States of America, as well as a fast pace of exports from the European Union on top of the bloc’s higher internal demand for wheat amid tighter maize supplies, provided further support to wheat prices. The FAO Vegetable Oil Price Index averaged 152.6 points in September, down 10.8 points (6.6 percent) month-on-month, marking the lowest level since February 2021. The continued drop of the index reflected lower prices across palm, soy, sunflower and rapeseed oils. In September, international palm oil prices declined for the sixth consecutive month, largely driven by lingering heavy inventories that coincided with seasonally rising production in Southeast Asia. In the meantime, world soyoil quotations dropped moderately after a short-lived rebound in August in response to elevated export availabilities in Argentina, owing to sharply higher farmer sales. The FAO Dairy Price Index averaged 142.5 points in September, down 0.8 points (0.6 percent) from August, marking the third consecutive monthly decline, but remained 24.4 points (20.7 percent) above its value a year ago. In September, international prices of all dairy products declined moderately, to a great extent reflecting the impact of the weaker Euro against the United States dollar in world dairy prices (expressed in United States dollars). The FAO Sugar Price Index averaged 109.7 points in September, down 0.8 points (0.7 percent) from August, marking the fifth consecutive monthly decline and reaching its lowest level since July 2021. The September decline was mostly related to the good production prospects in Brazil, the worlds largest sugar exporter, with rains benefiting yields of standing crops and lower ethanol prices prompting a greater use of sugarcane to produce sugar.Powered by Commodity Insights