Food Price Index comes off the boil

After three months on an upward trajectory, the FAO Food Price Index* moved lower in August. The Index declined 2.3 points (1.3%) from July, to average 176.6 points in August – underpinned by lower cereal, sugar and meat values. Nevertheless, the Index remained 10 points (6%) higher than where it was the same time last year.

The Meat Price Index averaged 172.4 points for the month – down 2.1 points (1.2%) from July. The Index now sits 18.7% below where it peaked in August 2014. International bovine prices drove the overall decline for the month, while pig, ovine and poultry meat prices were stable. FAO report that bovine values moved lower on account of increased export supplies from Australia and rising production in the US. Robust import demand was reported for ovine, pig and poultry meat, although supplies from key producing regions were adequate, which saw prices remain largely unchanged.

Cereal and sugar prices eased in August due to increased global production, while dairy and vegetable oil values registered an increase for the month – underpinned by reduced export supplies.

*The Food and Agriculture Organisation (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).