Commodities Buzz: FAO Food Price Index Unchanged On Month

2 Dec 2022 , 02:51 PM

The FAO Food Price Index (FFPI) averaged 135.7 points in November 2022, virtually unchanged from October, with month-on-month decreases in the price indices for cereals, dairy and meat, nearly offsetting increases in those of vegetable oils and sugar. At this level, the index stood only marginally above (0.3 percent) its corresponding value in November 2021. The FAO Cereal Price Index averaged 150.4 points in November, down 1.9 points (1.3 percent) from October, but still 9.0 points (6.3 percent) above its value a year ago. World wheat prices registered a 2.8-percent decline during the month of November, mostly driven by the rejoining of the Russian Federation in the Black Sea Grain Initiative and the extension of the agreement, subdued import demand for supplies from the United States of America due to uncompetitive prices, and greater competition in global markets with increased shipments from the Russian Federation. The FAO Vegetable Oil Price Index averaged 154.7 points in November, up 3.4 points (2.3 percent) after declining for seven consecutive months. The increase was driven by higher international palm and soy oil prices, more than offsetting lower rapeseed and sunflower oil quotations. International palm oil prices rebounded in November, supported by renewed global import demand owing to competitive prices relative to those of other edible oils, as well as concerns over lower production potentials due to excessive rainfall in parts of major growing regions in Southeast Asia. The FAO Dairy Price Index averaged 137.5 points in November, down 1.7 points (1.2 percent) from October, marking the fifth consecutive monthly decline, but remained 11.6 points (9.2 percent) above its value a year ago. In November, international price quotations for skim milk powders fell the most, reflecting lower import demand, as buyers were well covered for their near-term needs coupled with increased export availabilities in Europe. Whole milk powder prices dropped substantially, principally due to lower buying interest from China, only partially compensated by higher purchases by Southeast Asian countries. The FAO Sugar Price Index averaged 114.3 points in November, up 5.7 points (5.2 percent) from October, marking the first increase after six consecutive monthly declines. The November rebound was mostly related to strong buying amid prevailing tight global sugar supplies due to harvest delays in key producing countries and the announcement by India of a lower sugar export quota. Higher ethanol prices in Brazil, raising concerns over a greater use of sugarcane to produce ethanol, exerted further upward pressure on world sugar prices.Powered by Commodity Insights