FAO Food Price Index dips in October as rice and wheat prices decline

03 Nov 2023 --- World food commodity prices inched down in October, down by 0.5% from September, with the index for dairy products the only one to rise, according to the latest FAO data.

The FAO Food Price Index averaged 120.6 points last month, down 10.9% from its corresponding value a year earlier. 

The FAO Cereal Price Index declined by 1.0% from the previous month. International rice prices dropped by 2.0% amid “generally passive global import demand.” 

Wheat prices dropped by 1.9%, impacted by strong supplies from the US and strong competition among exporters, notes the FAO.

Dairy goes up
The FAO Vegetable Oil Price Index decreased by 0.7% from September due to lower world palm oil prices. This is down to seasonally higher outputs and subdued global import demand, which more than offset higher prices for soy, sunflower and rapeseed oils. 

The FAO says that soy oil prices increased because of a robust demand from the biodiesel sector. 

Meanwhile, the FAO Sugar Price Index declined by 2.2% but remained 46.6% above the same period in 2022. The decline was partly due to increased production in Brazil.

The FAO Meat Price Index declined by 0.6% as sluggish import demand, especially from East Asia, led to a fall in the international prices of pig meat, more than offsetting marginal increases in the prices of poultry, bovine and ovine meats.

Dairy processors recognize the significance of sustainability within the industry. Uncertainty can influence the price of dairy products.The only commodity price to rise was the FAO Dairy Price Index, which increased by 2.2% in October, ending a nine-month decline.

World milk powder prices increased the most following a surge of imports and some uncertainty over the impact of the El Niño weather conditions on the upcoming milk production in Oceania.

Conflicts aggravate hunger in vulnerable countries
The FAO also reported how intense conflicts are aggravating food insecurity. It says that moderating international food commodity prices are being countered by weak currencies in many low-income countries. 

Forty-six countries, including 33 in Africa, are assessed to need external assistance for food, according to the latest Crop Prospects and Food Situation report, a triennial publication by FAO’s Global Information and Early Warning System (GIEWS), which is also published today.

More than half the residents of the Gaza Strip were estimated to be in acute food insecurity already in 2022. “The escalation of the conflict there will increase humanitarian and emergency assistance needs even as access to the affected areas remains an alarming concern,” the FAO says.

It also mentions how “spillover effects” from the conflict could worsen food insecurity in Lebanon. 

While world cereal production is forecast to expand by 0.9% in 2023 from 2022, the pace of growth will be half of that rate for the group of 44 Low Income Food Deficit Countries, the report notes.

Edited by Gaynor Selby