The Food and Agriculture Organization (FAO) reported on Friday that global food commodity prices saw a slight decline in August.
The FAO Food Price Index averaged 120.7 points, marking a minor drop from July and a 1.1% decrease compared to August 2023.
This decline was mainly due to lower prices for sugar, meat, and cereals, which outweighed the increases in vegetable oils and dairy products. The FAO noted a 4.7% drop in the Sugar Price Index, driven by improved production forecasts in India and Thailand, and lower international crude oil prices, although late-August fires in Brazil did cause a temporary price spike. The Meat Price Index fell by 0.7% due to weaker import demand, despite a slight rise in bovine meat prices.
Conversely, the FAO Vegetable Oil Price Index rose by 0.8% to a 20-month high, largely due to increased palm oil prices. The Dairy Price Index also increased by 2.2%, reflecting higher global demand for milk powder and cheese, with butter prices reaching an all-time high due to concerns over milk supply in Western Europe.
The FAO also revised its forecasts for global cereal production and utilization in 2024. The forecast for cereal production is set at 2,851 million tonnes, nearly matching 2023 levels, with increased projections for wheat and rice. Rice production is expected to hit a record 537 million tonnes.
Despite an anticipated rise in world cereal stocks and utilization, international trade in cereals is expected to decline by 3.3% from 2023/24, primarily due to reduced volumes of coarse grains.
