The FAO Food Price Index (FFPI) averaged 173 points in June 2019, down marginally (0.3 percent) from May and very close to its level in June 2018. Lower prices of dairy products and vegetable oils more than offset increases in the prices of cereals, sugar and meat; ending almost five months of uninterrupted rise in the overall value of the FFPI.
The FAO Cereal Price Index averaged 173.2 points in June, up 6.7 percent (almost 11 points) from May and 3.8 percent higher than in June 2018. The latest increase in the value of the Index was driven by a sharp rise in maize export price quotations, for the third consecutive month, mainly due to expectations of much tighter export supplies in the United States – the world’s largest producer and exporter of maize. International wheat prices rebounded following two consecutive months of declines, partly due to production uncertainties while spillovers from higher maize values also contributed to the increase. By contrast, international rice prices extended their stable streak into June, as weak buying interest for Indica and Japonica rice offset the support provided by a further appreciation of the Thai Baht and the strong demand for Basmati rice.
The FAO Vegetable Oil Price Index averaged 125.5 points in June, down 2.0 points (or 1.6 percent) month-on-month and reaching the lowest level since December 2018. The latest drop mostly reflects weakening palm oil and soy oil prices, whereas sunflower and rapeseed oil values increased marginally. International palm oil quotations continued to fall, underpinned by both sluggish global import demand and the prospects of seasonally rising output in key exporting countries. Soy oil prices dropped modestly on subdued export prospects, amid expectations of ample global supplies. By contrast, price quotations of sunflower and rapeseed oils edged up on, respectively, protracted robust import demand and renewed concerns over unfavourable crop conditions in major producing countries.
The FAO Dairy Price Index averaged 199.2 points in June, down 26.9 points (11.9 percent) from May, marking the first monthly decline in five months, but still 9.4 percent higher than its level at the start of the year. In June, price quotations across all four categories of milk products that constitute the Index dropped, with sharper falls registered for cheese and butter prices. June’s price weakness was precipitated by increased export availabilities and frail import demand.
The FAO Meat Price Index* averaged 176.0 points in June, up 2.6 points (1.5 percent) from its revised value for May, further continuing the moderate month-on-month price increases registered over the last five months. In June, price quotations for ovine, pig and poultry meats all rose on strong import demand, especially from East Asia, as the spread of the African Swine Fever continued to limit domestic production. While global import demand for bovine meat too was robust, price quotations remained stable due to increased export availabilities from Oceania.
The FAO sugar price index averaged 183.3 points in June, up 7.4 points (4.2 percent) from May. International sugar prices were largely influenced by movements in the Brazilian currency (Real), which gained strength against the United States dollar. A stronger Real supports sugar prices by affecting the supply of Brazilian sugar to the world market, as producers prefer to process sugarcane into ethanol for local sale rather than exporting sugar and receiving a lower price. Reports of a decline in exports from the EU also provided support to world sugar prices.