Food Price Index rallies in June – FAO
14 July 2016
The Food and Agriculture Organisation of the United Nations (FAO) Food Price Index* averaged 163.4 points in June 2016 – up 6.6 points, or 4.2%, on the previous month, and down 1% on the same time last year. In fact, the rise in June was the fifth consecutive monthly increase for the Index, and it was the largest monthly increase in the last four years.
All commodity sub-indices, except for vegetable oils, recorded an increase in value in June – largely led by a surge in sugar prices, while cereal, dairy and meat prices increased more moderately.
The FAO Meat Price Index averaged 158.3 points in June, up 3.8 points (2.4%) from the revised May value. June marked the third month in a row where average quotations for all categories of meat increased – particularly pigmeat and ovine meat, while bovine and poultry meat values strengthened to a lesser extent. In the EU, lower availability of pigs for slaughter and lighter carcase weights limited supplies, which saw export quotations lift considerably. Similarly, in the Oceania region, lower sheepmeat and beef export availability pushed prices higher. Poultry meat quotations have been gradually increasing since the start of the year, with sales in Brazil recording strong growth, particularly to Japan and Saudi Arabia.
The Sugar Price Index jumped 14.8% from May, largely due to heavy rains in Brazil – the world’s largest sugar producer and exporter – which impacted harvesting and reduced yields.
The Cereal Price Index lifted 2.9% on the previous month, attributed mainly to higher maize prices due to lower export supplies in Brazil. The Dairy Price Index in June rose 7.8% from May, with the uncertain outlook for the 2016-17 season in the Oceania region and the reduction in milk production in the EU in April causing quotations to increase. Compared to the same time last year, however, the Index was 14% lower.
The Vegetable Oil Price Index eased slightly (0.8%) in June, compared to the previous month, primarily attributed to lower palm oil quotations on the back of subdued global import demand.
*The 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).
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