The FAO (Food and Agriculture Organisation of the United Nations) Food Price Index averaged 216 points in September 2012, up 3 points (1.4%) from August. Following two months of stability, the Index rose slightly, mostly on strengthening dairy and meat prices and more contained increases for cereals. Prices of sugar and oils fell.
The FAO Cereal Price Index averaged 263 points in September, up 3 points (1.0%) from August, as gains in wheat and rice offset a decline in maize. At this level, the FAO Cereal Price Index is 7% higher than in the corresponding period last year but still 4% below the peak of 274 points registered in April 2008. While shrinking maize export availabilities and high maize prices have been leading cereal markets in recent months, tightening wheat supplies have also become a concern. Nonetheless, international wheat prices fell towards the second half of the month, following the announcement by the Russian Federation that it would not impose restrictions on exports.
The FAO Oils/Fats Price Index averaged 225 points in September, down 1 point (or 0.4%) from August. While prices for soy, rapeseed and sunflower oil remained firm during most of September, palm oil quotations dropped for the second consecutive month reflecting seasonally high production, which, combined with weak demand, has led to a marked rise in stocks.
The FAO Meat Price Index averaged 175 points in September, up 4 points (2.1%) from August. The grain-intensive pig and poultry sectors recorded particularly strong gains, increasing by 6% and 2% respectively. Bovine prices made little headway while sheep meat values were stable.
The FAO Dairy Price Index averaged 188 points in September, up 12 points (7%) from August, representing the sharpest monthly increase since January 2011. All the five dairy products monitored saw prices rise, in particular skim milk powder and casein, which both surged by 12%. World demand for milk products remains firm which, combined with increasing feed costs, is underpinning world quotations.
The FAO Sugar Price Index averaged 284 points in September, down 13 points (4.2%) from August, and 95 points (25%) from September last year. The decline in sugar quotations reflects improved sugarcane harvest in Brazil, the world’s largest sugar exporter, and improved crop prospects in some key producing regions including India, China, and Thailand.