The FAO Food Price Index continued a slow uptick for the third consecutive month, averaging 151.8 points in April 2016, up 0.7 percent from March, but almost 10 percent below its April 2015 level. The gradual increase is far from even across the board. April’s increase was driven by palm oil prices and, in a minor key, cereals, while sugar prices tapered down after a strong increase in March.
The Cereal Price Index averaged nearly 150 points in April, up 1.5 percent from March, but still down 10.4 percent year-on-year. Maize quotations increased the most, influenced by weaker U.S. dollar and spill over from soaring prices in the vegetable oils complex. However, favorable weather conditions and expected large supplies in the new season limited gains in wheat markets. Rice prices were marginally down, under the pressure of falling Japonica quotations, which outweighed modest increases in the Indica and Aromatic rice segments.
The Vegetable Oil Price Index averaged 166.4 points in April, up 4.1 percent from March and representing the third consecutive monthly increase. The April rise was again driven by palm oil, the prices of which climbed to a 17 month high on concerns over a grim 2016 production outlook and a growing world demand. International prices of soy oil, the oil with the second-highest weight in the index, also firmed due to less favorable 2015/16 production prospects in South America.
The Dairy Price Index averaged 127.4 points in April, down 2.2 percent from March. Quotations for dairy products continued to be affected by ample world supplies and limited buying interest by traditional importers. While prices for all dairy products fell, those of butter and cheese were the most affected, reflecting a buildup of stocks in the major exporting countries. World prices for Skimmed Milk Powder (SMP) have remained close to the EU intervention price, sustained by intervention purchases which have made stocks in the EU surge compared to April last year, a factor which has also lent a degree of stability to Whole Milk Powder (WMP) quotations.
The Sugar Price Index averaged 215 points in April, 1.7 percent from March. Last month’s decline reflected generally large export availabilities in Brazil, supported by a bumper crop and expectation of reduced use of sugarcane for the production of ethanol in the country. However, the possibility of global sugar production falling short of the anticipated consumption for the second consecutive season limited the decline in international prices.
The Meat Price Index averaged 146.6 points in April, up 0.8 percent from March. The prices of pig and poultry meats were mostly steady, reflecting an overall balanced supply and demand situation. While they moved higher for sheep meat, the main notable change concerned the rise in bovine meat quotations, where restricted supplies and an uptick in demand from the United States pushed up Australia’s average monthly export prices to their highest level since October 2015.