Brighton Gumbo, Business Reporter
GLOBAL food prices increased by average four percent in the month of October 2015 compared to September with sugar, vegetable oils and dairy products leading the ladder, according to the Food and Agriculture Organisation (FAO).
“The FAO food price index averaged nearly 162 points in October 2015, as much as six points (3.9 percent) more than in September, the sharpest increase since July 2012,” said FAO.
The global food organisation said its price index reflected that the vegetable oil price averaged 142.6 points in October recording an 8.4 points rise (6.2 percent) compared to September.
“The increase, which follows three months of decline, was primarily driven by higher palm oil prices, as concerns intensified about El Niño compromising next year’s production in Southeast Asia, Indonesia in particular,” said FAO.
“In addition, international soy oil prices strengthened, mainly reflecting slow progress in soybean plantings in parts of Brazil due to unfavourable weather conditions. Limited global availabilities of rape and sunflower seed also lent support to the index.”
The dairy price index rose 9,4 percent to average 155.6 points in October compared to September.
“Concerns that milk output in New Zealand would fall during the current June/May dairy year caused Oceania prices to rise in both September and October, with export prices from the EU following suit, although remaining below quotations in Oceania,” it said.
“Prices of whole milk powder surged by almost 21 percent over the month with all the other dairy products also incurring marked increases.”
The global sugar price index averaged 197.4 points in October, up 29.0 points (17.2 percent) from September – the highest level since February 2015.
“The sharp month-on-month increase was largely weather-driven. In Brazil, the world’s leading sugar producer, delays caused by excessive precipitation in the South-Central producing regions, adversely affected sugarcane harvesting,” said FAO.
“Reports of crop damages caused by excessive dryness in India, Thailand, the Philippines, South Africa and Vietnam provided further support to international sugar prices.”
While cereal prices were subject to a more modest increase, meat prices remained stable.
According to FAO, the meat price index averaged 168.8 points in October, essentially the same level as in September, prolonging an extended period of overall stability that has been evident since March 2015.
“Of the meats covered, only ovine meat registered a substantial change, rising by eight percent due to constrained export availability in Oceania. Prices of the other categories of meat were little changed,” said FAO.
“Cereal price index averaged 157.4 points in October, up 2.6 points (1.7 percent) from September, largely led by an upturn in wheat and maize prices. Wheat quotations were higher, mostly on concerns about dryness affecting winter wheat in some countries and deteriorating production prospects in Australia.
“Maize prices strengthened, reflecting a slowdown in farmers’ sales in the United States, the world’s biggest producer and exporter of maize. By contrast, rice prices fell, as a result of marked declines in the fragrant and Japonica rice segments.”
The global food price index is a measure of the monthly change in international prices of a basket of food commodities.
It consists of the average of five commodity group price indices, weighted with the average export shares of each of the groups.