Food Price Index rebounds

Following three months of consecutive declines, the FAO Food Price Index* has bounced back in May. This was underpinned by increases across all commodity indices used in the calculation of the Food Price Index, except for sugar.

The Food Price Index in May averaged 172.6 points – up 3.7 points (2.2%) from April, and almost 16 points (10%) higher than where it was the same time last year.

The Meat Price Index continued its run of modest increases since the start of the year – lifting 2.5 points (1.5%) from April, to average 171.7 points in May.

Bovine meat prices rose due to limited export supplies in the Oceania region. Similarly, ovine meat prices were again boosted by reduced availability for export. Pig meat prices increased on the back of firm demand, while poultry quotes were fairly stable for the month.

Of all the commodity indices, the Dairy Price Index has gained the most ground in the last 12 months – up 51% year-on-year.

Sugar prices, on the other hand, have taken a dive this year. The Index’s 13-month low in May was largely attributed to higher-than-anticipated production in Brazil and the sudden depreciation of the Brazilian Real.

*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).