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Food Prices fare well
11 July 2017
June marked the second consecutive month of the FAO Food Price Index* increasing – driven by higher dairy, cereal and meat quotations.
The Food Price Index averaged 175.2 points in June – up 2.5 points (1.4%) from the previous month, and 11 points (7%) higher than where it was the same time last year.
For the first six months of 2017, the Meat Price Index remained on a gradual upward trajectory. The Index pushed 3.2 points (1.8%) higher than May, to average 175.2 points in June. Bovine and ovine quotations were supported by limited export availability in the Oceania region, combined with strong buyer interest. Furthermore, pig prices were underpinned by solid import demand.
The Dairy Price Index rose to its highest level since 2014 – lifting 15.9 points (8.3%) from May, to average 209 points for the month. The upturn in prices was attributed to reduced supplies of dairy product available to export in all major producing countries.
Deteriorating crop conditions in the US pushed high protein wheat values higher, while strong import demand drove an increase in global rice prices. As a result, the Cereal Price Index hit a one-year high of 154.3 points in June. This was despite record harvests in South America, which continued to pressure maize prices.
In contrast, vegetable oil prices declined due to easing palm and soil oil values, while international sugar prices continued to fall as a result of plentiful supplies.
*The Food and Agriculture Organisation (FAO) Food Price Index is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices, weighted with the average export shares of each of the groups for 2002-2004 (Food and Agriculture Organisation of the United Nations).
