FAO Food Price Index Sees Largest Monthly Increase Since May 2022
In September, the FAO Food Price Index saw the largest month-on-month increase since May 2022, rising 3 percent from August. While the Index is 2 percent higher than its September 2023 level, it remains over 22 percent below its March 2022 peak.
The Cereal Price Index rose 3 percent in September but remains 10 percent below the level seen in September 2023. Wheat prices rose due to wet weather in several major producing regions, including Canada and the European Union. Maize prices also rose due to increasing demand in South America and reduced production conditions in Brazil and the United States. Rice prices, alternatively, fell by 0.7 percent due to slowing trade and ample supplies, as well as India’s decision to lift its export ban.
The Vegetable Oil Price Index rose 4.6 percent from August to reach the highest level seen since early 2023. Soy and palm oil prices both rose due to lower-than-expected production in major producing regions, including Southeast Asia and the United States
The Dairy, Meat, and Sugar Price Indices also all rose in September, by 3.8 percent, 0.4 percent, and 10.4 percent, respectively.
The latest AMIS Market Monitor also reports on the increasing prices for most major commodities aside from rice. The report emphasizes the role that weather events have played in the rising prices.
Wheat production prospects for 2024 increased due to higher forecasts from Australia. Utilization prospects also increased slightly but total utilization is still expected to be below its 2023-2024 level. Wheat trade prospects declined due to smaller purchases by several importing countries and reduced export forecasts from the European Union. Total global wheat ending stocks are expected to be slightly above their opening levels.
Maize production forecasts fell in September due to lower yields in the European Union. Utilization prospects increased slightly, with total utilization expected to be 1.1 percent above previous year’s levels. Maize trade forecasts also increased due to rising import demand in the EU and higher exports by Brazil, but total trade is still expected to be nearly 4 percent lower than 2023-2024 levels. Total maize ending stock forecasts fell due to reductions in the EU, Argentina, China, and the United States, but stocks are still expected to be above their opening levels.
Rice production expectations increased due to higher output from India, while utilization also reached a new high due to strong food and non-food demand. Rice trade is still expected to decline but could recover in 2025 due to increased imports in Asia and Africa. Total rice ending stock forecasts rose due to higher stocks in India.
Soybean production prospects rose slightly due to higher than expected production in Argentina. Utilization prospects also rose, driven by higher production forecasts in Argentina and China. Soybean trade prospects increased due to both rising imports and larger exports. Total soybean ending stocks are expected to reach a new peak.
Sara Gustafson is a freelance communications consultant.