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Global food prices rise again

May 3, 2024 - Alex Jurvillier

The FAO food price index of the World Food Organization rises to 119.1 points in April, approaching the level of last December. After the first increase in seven months last month, this trend continued in April.

Thus, the food price index is 0.3 points higher than in March. Year on year, food prices in April are 9.6 points lower, relatively low compared to 128.7 in April last year. Looking at the underlying factors, we see a rising index for vegetable oils and grains as well as an increase in the meat index. These outweigh the decline in the sugar and dairy index.

With 111.2 points, the grain index rises by 0.3 points compared to March. The index declined for three consecutive months but rebounded slightly in April. FAO mentions stabilizing wheat prices but rising corn export prices due to increasing import demand and reduced production forecasts in Brazil. Barley prices rose while sorghum prices fell.

Vegetable Oil
The index for vegetable oils reached 130.9 points in April. This is a 0.3-point increase from the previous month and 0.9 points higher than in April last year. This places the index at its highest point in thirteen months. Driven by rising sunflower and rapeseed oil prices due to strong global import purchases and concerns about poor weather forecasts for winter rapeseed in parts of Europe. Conversely, palm and soybean oil prices decreased, according to FAO.

FAO's dairy price index decreased by 0.3 points compared to March, reaching 123.7 points. This is significantly lower than the 129.3 points in April last year. Lower prices for skimmed milk powder weigh on the index. This contrasts with rising butter prices. A stronger US dollar led to declining cheese prices, as reported by FAO. Whole milk powder prices moderately recovered despite improved demand and a decrease in seasonal oceanic milk production.

The FAO meat price index stood at 116.3 points in April. This is 1.9 points higher than in March but 0.5 points lower than in April last year. Poultry prices rose due to strong import purchases. Beef prices also increased due to increased import demand, according to FAO. In contrast, pork prices fell due to weaker demand in Western Europe and major importers like China.

The sugar index decreased significantly from 133.4 points in March to 127.5 points in April. Compared to April last year when the index was at 149.4 points, it is 21.9 points lower. The decline is mainly attributed to expectations of an improved global supply, as stated by FAO. India and Thailand are expected to deliver larger harvests than anticipated. Improved weather in Brazil also contributed to a positive sentiment, leading to lower prices. The weaker Brazilian real contributed to the decline, partially offset by rising prices for crude oil and ethanol in Brazil.

Alex Jurvillier

Alex Jurvillier is a market specialist in sugar and cacao at DCA Market Intelligence. He also monitors the milk supply in the most important dairy countries and keeps an eye on developments in food.
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