World food prices retreat as cereals fall in October
International food commodity prices eased in October as cheaper cereals, dairy products and meat outweighed increases in sugar and vegetable oils. The FAO index averaged 133.9 points, down 1.2 per cent for the month but still 5.9 per cent higher than a year earlier. Rain disrupted sugarcane harvesting in Brazil, helping push sugar prices up for a fourth month.
Economics & Markets··Evening
Food commodities ease despite higher sugar prices
International food commodity prices declined in October, with the index compiled by the United Nations Food and Agriculture Organization, FAO, averaging 133.9 points. The monthly fall was 1.2 per cent. Lower cereal, dairy and meat quotations outweighed more expensive sugar and a small rise in vegetable oils. The index remained 5.9 per cent above its level a year earlier.[1], [2]
The measure follows international commodity prices through five product groups, weighted by their shares of exports. October’s reading was 16.4 per cent below the historical peak.[1]
Cereals fall as wheat and maize become cheaper
Cereal prices fell 4.5 per cent, taking the group index to 116.8 points. FAO linked cheaper wheat to subdued international demand and an improving harvest outlook, particularly in Argentina. Maize quotations eased under pressure from the US harvest and expectations of plentiful South American supply. Vegetable oils moved in the opposite direction, rising 0.3 per cent to 199.2 points. Higher soybean and sunflower oil prices outweighed a decline in rapeseed oil, while palm oil was broadly stable.[1]
Brazilian rain disrupts the sugar harvest
Sugar climbed 6.6 per cent to 121.3 points, its fourth successive monthly increase. Rain interrupted sugarcane harvesting and crushing in Brazil’s main producing region. Production prospects in India, the European Union and Thailand also contributed to upward price pressure. Dairy prices fell 1.1 per cent to 117.8 points as ample butter and cheese supplies met limited buying interest. Meat prices dropped 1.2 per cent to 125.5 points, with lower pig, sheep and cattle meat quotations and broadly unchanged poultry prices.[1]
