Sugar, cereal quotes drive global food prices down in August

The FAO Food Price Index averaged 169.8 points in August 2019, down 1.1% from July but still up 1.1% from August 2018.

The Cereal Price Index averaged 157.6 points in August, down 6.4% from July and 6.6% from its level in the corresponding month last year. The decline was driven by sharp drops in the prices of wheat and major coarse grains, particularly maize. Wheat prices remained under downward pressure, influenced by large export availabilities and increased competition among the major exporters. Maize values also turned sharply lower in August, primarily because of expectation of a much larger-than-earlier anticipated harvest in the United States.

The Vegetable Oil Price Index averaged 133.9 points in August, up 5.9% from July and marking an 11-month high, but still 11% below July 2018. The increase reflects firmer values for palm and several other oils. International palm oil price quotations surged, underpinned by a rebound in global import demand and lower than expected inventory levels in Malaysia.

The Dairy Price Index averaged 194.5 points in August, up 0.5% from July, indicating a reversal of sharp falls registered in June and July. Price quotations for cheese, Skim Milk Powder (SMP) and Whole Milk Powder (WMP) all rose, reflecting higher import demand for near-term deliveries, as market activities began normalizing with the end of the summer recess in the northern hemisphere. Price quotations for butter fell for the third consecutive month due to weaker demand.

The Sugar Price Index averaged 174.8 points in August, down 4% from July 2019, mainly on expectations for larger sugar shipments from Mexico and India.

The Meat Price Index averaged 179.8 points in August, up 0.5% from July, continuing the trend of moderate month-on-month price increases shown since February. The index is 12.3% percent above its level in January 2019 and 7.8% above August 2018. The increase reflected higher international price quotations for pig meat, underpinned by strong import demand from China, where the African Swine Fewer has curtailed domestic production.