Cereal prices continue to rise in April, says FAO Food Price Index

The FAO Food Price Index remained nearly unchanged in April; however, cereal and dairy prices continued to rise.

The Cereal Price Index rose 1.7 percent from March, reaching almost 16 percent higher than its April 2017 levels. This is the fourth consecutive month of such increases, which are being driven largely by weather-related fears for wheat and maize and government purchases in Indonesia and the Philippines for rice.

The Dairy Price Index increased by 3.4 percent from March to reach more than 11 percent higher than its year-earlier level. This increase, which marks the third consecutive rise in monthly prices, is being driven by increased demand for all milk products, as well as by anticipated reduced milk output from New Zealand.

In contrast, the Vegetable Oils, Meat, and Sugar Indices all fell in April. Slowing demand and good production prospects contributed to the decline in vegetable oil prices. Similarly, strong global supplies drove down sugar prices, and a combination of increased exports and decreasing demand drove declines in meat prices.

The first forecasts from the AMIS Market Monitor for the 2018-2019 markets anticipate a good season for wheat, maize, and rice. Overall, global supplies of these commodities will remain ample in spite of increased demand, although maize supplies may tighten slightly as a result of lowered global plantings and poor weather in some producing regions.

For soybeans, however, AMIS reports that both production and ending stocks declined for the 2017-2018 season. Thus, planting and growing conditions and trade policies in the coming months will be critical for the 2018-2019 season, the report cites.