FAO: Global Food Prices Increase For Third Consecutive Month

Monday, May 16th, 2016 | 763 Views

According to the Food and Agricultural Organisation (FAO), global prices of key staple food commodities rose in April, making it the third consecutive monthly increase after four years of decline.

In the FAO Food Price Index, the index averaged 151.8 points in April – a 0.7 percent increase from March.

A report from FAO revealed that “the gradual increase is far from even across the board as April’s increase was driven by palm oil prices and, in a minor key, cereals, while sugar prices tapered down after a strong increase in March.”

The FAO Food Price Index is a trade-weighted index tracking international market prices for five key commodity groups: major cereals, vegetable oils, dairy, meat and sugar. According to the report, the Food Price Index’s decline over the past year “reflects ample food supplies, a slowing global economy and a stronger United States (US) dollar”.

Vegetable oil prices rose 4.1 largely due to a grim 2016 production outlook for palm oil coupled with a growing worldwide demand. Cereal prices also rose by 1.5 percent, due primarily to international maize quotations, which were themselves influenced by a weaker US dollar and spill over from the oilseeds complex.

On the other hand, rice prices declined marginally, while what markets posted limited gains amid expectations of large supplies in the new season for the crop.

Other price indexes include dairy, which dropped 2.2 percent as stocks of butter and cheese in major exporters continue to grow, and meat prices, which rose 0.8 percent thanks to the strengthening of US demand for Australian beef. Sugar prices dropped 1.7 percent in April, after a dramatic 17 percent increase in March.