Global food commodity prices fell in 2.8 percent in March, averaging 171, down 5 point from February but still 13.4 percent above its level one year ago, according to the latest report from the UN’s Food Agriculture Organization (FAO). With the exception of meat, the Food Price Indices of all other commodities dropped in March, especially those of sugar and vegetable oils.
The Cereal Price Index averaged 147.8 points in March, down 1.8 percent from March and essentially at a par with its value the same time last year. Ample available supplies, combined with good production prospects in the new season, weighed on export quotations. International rice prices were little varied, while wheat quotations were generally weaker, following improved weather conditions in major producing regions. Maize values also fell, mostly on large supplies from recently harvested crops in South America, which intensified export competition in March with ample export supplies and no major upturn in import demand.
The Vegetable Oil Price Index averaged 167.6 points in March, down for the second consecutive month. While the index dropped by 6.2 percent month-on-month, it continued to fare above its corresponding level in the last two years. The slide in the index primarily reflects developments in the palm and soy oil sector. Palm oil values reached a 5-month low dropping 5.6 percent as prospective production increases in Southeast Asia, Indonesia in particular, coincided with weak global import demand. Meanwhile, soy oil quotations fell to an 8-month low dropping 3.5 percent, fueled by much improved harvest forecasts in South America and prospects of higher 2017/18 plantings in the United States. Higher than expected availabilities of rape- and sunflower seed oils also weighed on the index.
The Dairy Price Index averaged 189.8 in March, down 2.3 percent from the previous month, but still 46 percent higher year-on-year. The decrease from February marked the first decline since April 2016, reflecting ample milk supplies in the northern hemisphere and prospects for higher-than-earlier anticipated milk production in Oceania. These factors fueled expectations of increased supplies of milk powders and cheese. Conversely, butter prices rose, amid reduced export availability stemming from continued firm domestic demand in Europe and North America.
The Sugar Price Index averaged2 56.6 points in March, down as much as 10.9 percent from February and reaching its lowest level since May 2016. The decline reflected generally weak import demand combined with expectation of higher Brazilian supplies entering world markets because of a strong output increase and slower domestic intake for bio-ethanol production.
The Meat Price Index averaged 163.2 points in March, up 0.7 percent from February and 12 percent higher than in March 2016. Quotations for the individual categories of meat changed little. Slight increases for bovine meat and pig meat were, respectively, influenced by continued constrained availability in Oceania and firm import demand from Asia, particularly China. Poultry and ovine meat markets remained well-balanced.