Cereal Prices Dip in Global Market, But Vegetable Oil and Sugar Prices UP

The benchmark for world food commodity prices was broadly unchanged in July for the second month in a row, as increases in international quotations of vegetable oils. meat  products and sugar offset an ongoing decrease in those for cereals, the Food and Agriculture Organization of the United Nations reported Friday.

The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, averaged 120.8 points in July, marginally below its revised 121.0 figure for June. The index is now 3.1 percent lower than its corresponding value one year earlier.

The FAO Cereal Price Index declined by 3.8 percent from June as the global export prices of all major cereals decreased for the second consecutive month. Wheat quotations dipped on increasing seasonal availability from ongoing winter harvests in the northern hemisphere and generally favorable conditions in Canada and the United State of America supporting expectations for large spring wheat harvests later in the year. 

Maize export prices also declined as harvests in Argentina and Brazil progressed ahead of last year’s pace and crop conditions in the United States remained robust. The FAO All-Rice Price Index declined by 2.4 percent from June amid generally quiet trading activities for both Indica and Japonica varieties.

The FAO Vegetable Oil Price Index, by contrast, rose 2.4 percent from June to reach a one-and-a-half-year high. Global quotations for palm, soy, sunflower and rapeseed oils all rose, lifted by robust demand for soy oil from the biofuel sector and deteriorating crop prospects for sunflower and rapeseed oils in several major producing countries.

The FAO Meat Price Index increased by 1.2 percent in July amid robust import demand for ovine, bovine and poultry meat.

The FAO Sugar Price Index increased by 0.7 percent from June as lower-than-expected production in Brazil outweighed the impact of improved monsoon rainfall in India and conductive weather conditions in Thailand.

The FAO Dairy Price Index was unchanged in July, as decreases in the quotations for milk powders offset increases in those for butter and cheese.