FAO Food Price Index: Dairy Prices Driven by Global Demand for Milk Products
Source: DairyNews.today
The FAO Food Price Index (FFPI) reached 124.4 points in September 2024, climbing 3 percent from August and marking the most significant monthly rise since March 2022. This uptick reflects rising price quotations across all included commodities, with increases ranging from a modest 0.4 percent for meat to a substantial 10.4 percent for sugar. On an annual basis, the FFPI stands 2.1 percent higher than in September 2023, although it remains 22.4 percent below the March 2022 peak of 160.3 points.
Cereal Price Index: Weather Concerns and Regional Supply Variability
The FAO Cereal Price Index rose to 113.5 points in September, up 3.0 percent from August but 10.2 percent below the same period last year. Global wheat prices rebounded after three months of decline, driven by adverse weather conditions impacting key exporters. Excess rainfall in Canada and the European Union delayed harvests and led to reduced output forecasts. However, competitively-priced supplies from the Black Sea region limited further price gains. Additionally, maize prices rose month-on-month, impacted by logistical challenges in Brazil and the United States due to low water levels on major rivers, coupled with strong domestic and export demand in Brazil and Argentina. Among other grains, barley prices firmed, while sorghum prices declined. The FAO All Rice Price Index also eased slightly by 0.7 percent, reflecting subdued trading and reduced Indian basmati prices.
Vegetable Oils Index: Strong Demand Amid Production Concerns
The FAO Vegetable Oil Price Index saw a significant rise to 142.4 points, up 4.6 percent from August and hitting its highest level since early 2023. The upward trend in vegetable oil prices was led by concerns over lower-than-expected palm oil production due to seasonal declines in major Southeast Asian producing regions. Additionally, soyoil prices rebounded on reduced crushing levels in the United States. Sunflower and rapeseed oil prices recovered modestly, supported by tighter supply expectations for the 2024/25 season.
Dairy Prices Driven by Global Demand for Milk Products
The FAO Dairy Price Index rose 3.8 percent to 136.3 points in September, showing a notable 21.7 percent increase year-on-year. This surge was led by a rise in whole milk powder prices, spurred by strong Asian import demand despite seasonally high milk production in Oceania. Skim milk powder prices were buoyed by limited export availabilities and robust domestic purchases in Western Europe. Furthermore, global butter prices continued their eleven-month ascent, driven by tight inventories and solid demand, while cheese prices increased due to limited exportable supplies from Western Europe amid seasonally low milk output.
Meat Prices Stabilize, Driven by Poultry Demand
The FAO Meat Price Index inched up by 0.4 percent to 119.6 points in September, showing a 4.8 percent increase over the past year. Poultry meat prices led the increase, driven by rising demand for Brazilian exports following the easing of trade restrictions linked to the Newcastle disease. Meanwhile, bovine and pig meat prices held steady, with ample global supply meeting demand. In contrast, ovine meat prices dipped due to reduced import demand from China.
Sugar Prices Surge Amid Production Uncertainty
The FAO Sugar Price Index jumped 10.4 percent to 125.7 points in September, largely driven by concerns over the upcoming 2024/25 season’s supply outlook. Prolonged dry weather and fires in Brazil in late August damaged sugarcane fields, while India’s decision to expand sugarcane use for ethanol production raised concerns about export availability. Despite these gains, sugar prices remain significantly lower than their peak a year ago.
The broad-based price increases in September underscore the complex global dynamics at play, from adverse weather conditions to shifting trade policies. As these factors continue to influence supply chains, global commodity markets are likely to see continued volatility in the months ahead.
The FAO Cereal Price Index rose to 113.5 points in September, up 3.0 percent from August but 10.2 percent below the same period last year. Global wheat prices rebounded after three months of decline, driven by adverse weather conditions impacting key exporters. Excess rainfall in Canada and the European Union delayed harvests and led to reduced output forecasts. However, competitively-priced supplies from the Black Sea region limited further price gains. Additionally, maize prices rose month-on-month, impacted by logistical challenges in Brazil and the United States due to low water levels on major rivers, coupled with strong domestic and export demand in Brazil and Argentina. Among other grains, barley prices firmed, while sorghum prices declined. The FAO All Rice Price Index also eased slightly by 0.7 percent, reflecting subdued trading and reduced Indian basmati prices.
Vegetable Oils Index: Strong Demand Amid Production Concerns
The FAO Vegetable Oil Price Index saw a significant rise to 142.4 points, up 4.6 percent from August and hitting its highest level since early 2023. The upward trend in vegetable oil prices was led by concerns over lower-than-expected palm oil production due to seasonal declines in major Southeast Asian producing regions. Additionally, soyoil prices rebounded on reduced crushing levels in the United States. Sunflower and rapeseed oil prices recovered modestly, supported by tighter supply expectations for the 2024/25 season.
Dairy Prices Driven by Global Demand for Milk Products
The FAO Dairy Price Index rose 3.8 percent to 136.3 points in September, showing a notable 21.7 percent increase year-on-year. This surge was led by a rise in whole milk powder prices, spurred by strong Asian import demand despite seasonally high milk production in Oceania. Skim milk powder prices were buoyed by limited export availabilities and robust domestic purchases in Western Europe. Furthermore, global butter prices continued their eleven-month ascent, driven by tight inventories and solid demand, while cheese prices increased due to limited exportable supplies from Western Europe amid seasonally low milk output.
Meat Prices Stabilize, Driven by Poultry Demand
The FAO Meat Price Index inched up by 0.4 percent to 119.6 points in September, showing a 4.8 percent increase over the past year. Poultry meat prices led the increase, driven by rising demand for Brazilian exports following the easing of trade restrictions linked to the Newcastle disease. Meanwhile, bovine and pig meat prices held steady, with ample global supply meeting demand. In contrast, ovine meat prices dipped due to reduced import demand from China.
Sugar Prices Surge Amid Production Uncertainty
The FAO Sugar Price Index jumped 10.4 percent to 125.7 points in September, largely driven by concerns over the upcoming 2024/25 season’s supply outlook. Prolonged dry weather and fires in Brazil in late August damaged sugarcane fields, while India’s decision to expand sugarcane use for ethanol production raised concerns about export availability. Despite these gains, sugar prices remain significantly lower than their peak a year ago.
The broad-based price increases in September underscore the complex global dynamics at play, from adverse weather conditions to shifting trade policies. As these factors continue to influence supply chains, global commodity markets are likely to see continued volatility in the months ahead.
