Food Price Index remains on upward trajectory – FAO

The Food and Agriculture Organisation of the United Nations (FAO) Food Price Index* averaged 155.8 points in May – 3.2 points (2.1%) higher than April, but still 7% lower than May last year. This was the fourth consecutive month of the Food Price Index increasing – with all sub-indices, except for vegetable oils, rising during the month.

The FAO Meat Price Index moved 3 points (2%) higher than the previous month, to average 151.8 points in May – but was still 20.8 points below year-ago levels.

Prices for all categories of meat lifted in May – particularly pigmeat and ovine meat quotations. FAO attributed the increase in pigmeat prices to higher domestic prices in the EU and continued strong demand from Asia.

Bovine and poultry meat prices rose to a smaller extent than pig and ovine meat. FAO suggest tighter bovine and ovine supplies from the Oceania region contributed to higher export quotations.

The Cereal Price Index was driven upwards by a sharp increase in maize prices, due to low export supplies prior to harvesting of new crops in the northern hemisphere later in the year. The Dairy Price Index was up marginally on the previous month, with higher domestic quotations in the EU and solid international import demand for whole milk powder and butter.

The Vegetable Oil Price Index was the only category to decline in May, compared to the month before, as a result of weaker than expected demand for palm oil in China, India and the EU, combined with higher export supplies from Malaysia.

*The FAO 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 for 2002-2004 (Food and Agriculture Organisation of the United Nations).