FAO Food Price Index unchanged August vs. July

by Meat&Poultry Staff
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ROME – According to the Food and Agriculture Organization of the United Nations (FAO) Food Price Index published Sept. 8, global food prices remained virtually unchanged between July and August. Last month the index averaged 231 points compared to 232 points in July. It was 26 percent higher than in August 2010 but seven points below its all-time high of 238 points in February 2011.

The FAO Meat Price Index averaged 181 points in August, up 1 percent from July. The FAO Oils/Fats Price Index averaged 244 points in August, following a declining trend since March but still remaining high in historical terms. The FAO Dairy Price Index averaged 221 points in August, significantly down from 228 points in July and 232 points in June, but still 14 percent higher than the same period last year.

The FAO Cereal Price Index averaged 253 points in August, up 2.2 percent, or 5 points, from July and 36 percent higher than in August 2010. However, the firmer cereal prices were largely offset by declines in international prices of most other commodities included in the Food Price Index, oils and dairy products in particular.

Among the major cereals, the maize supply situation is a cause for concern following downward revisions to maize crop prospects in the United States, the world's largest maize producer, because of continued hot weather in July and August.

Average wheat prices were also up 9 percent in August given the strong demand for feed wheat and shrinking supplies of high quality wheat. Nonetheless, world wheat production is forecast to increase by 4.3 percent (or 28 million tonnes), only 4 million tonnes below the 2009 record.

World coarse grain production is still heading for a record level of 147.5 million tonnes, up 2.4 percent (or 27 million tonnes) from 2010, in spite of lowered maize production prospects in the United States, the world's largest maize producer.

Rice prices also gained with the benchmark Thai rice price up 5 percent from July, driven by a policy change in Thailand, the world's largest rice exporter, where paddy rice will be purchased from farmers at above market prices. Global rice production prospects remain favorable, however, with output set to reach a new high of 479 million tonnes, up 2.5 percent from 2010.

The FAO Sugar Price Index averaged 394 points in August, down 2 percent from July, but still 50 percent higher than in August 2010.
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