FAO Food Price Index: Decline for January amid lower wheat and maize prices

02 Feb 2024 --- World food commodity prices fell further in January, led by declines in the prices of cereals and meat, which more than offset an increase in sugar prices, the Food and Agriculture Organization of the United Nations (FAO) reports today.

The FAO Food Price Index averaged 118 points in January, down 1% from December 2023 and 10.4% from its corresponding value a year ago.

The FAO Cereal Price Index declined by 2.2% from the previous month.

Global wheat export prices declined in January, driven by strong competition among exporters and the arrival of recently harvested supplies in the countries in the southern hemisphere. Maize fell sharply, reflecting improved crop conditions and the start of the harvest in Argentina and larger supplies in the US.

Rice and vegetable oil prices inch up 
By contrast, price quotations for rice increased by 1.2% in January, reflecting a strong export demand for Thai and Pakistani higher-quality Indica rice and additional purchases by Indonesia.

The FAO Vegetable Oil Price Index rose marginally by 0.1% from December - but was still 12.8% lower than a year earlier - reflecting moderate increases in international palm and sunflower seed oil prices offsetting declines in the prices of soy and rapeseed oils.

January reflected a strong export demand for Thai and Pakistani higher-quality Indica rice and additional purchases by Indonesia.World palm oil prices were driven by seasonally lower production in major producing countries and concerns over unfavorable weather conditions in Malaysia.

Meanwhile, increased import demand slightly pushed up sunflower seed oil prices. By contrast, international soy and rapeseed oil prices declined due to prospects for large supplies from South America and lingering ample availability in Europe, respectively.

The FAO Dairy Price Index remained virtually unchanged from its revised December value, standing 17.8% below its value a year ago. In January, international price quotations for butter and whole milk powder increased largely due to higher demand from Asian buyers, nearly offsetting declines in those for skim milk powder and cheese.

The FAO Meat Price Index declined for the seventh consecutive month by 1.4% from December, as abundant supplies from leading exporting countries drove down international prices of poultry, bovine and pig meats.

In January, the FAO Sugar Price Index was up 0.8%, underpinned by concerns over the likely impact of below-average rains in Brazil on sugarcane crops to be harvested from April, coupled with unfavorable production prospects in Thailand and India.

Edited by Gaynor Selby