Global food prices drop amid robust supplies

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Food products in the world declined last month, and only the rise in sugar levels rose, the Food and Agriculture Organization (FAO) said.

The FAO food price index, which measures monthly changes in a basket of grains, oilseeds, dairy products, meat and sugar, last month was 165.4 points.

The FAO food price index fell 1.4 percent compared with August and is now 7.4 percent below its level in September 2017.

The FAO grain price index fell by 2.8 percent, led by corn, as export quotes were reduced by expectations from a very large crop in the United States of America. International prices for rice and wheat also fell during the month, the latter being mainly due to continued strong sales and supplies from the Russian Federation.

The FAO vegetable oil price index published the eighth consecutive monthly decline, dropping 2.3% to a three-year low. A sharp drop in prices for palm oil was observed, since large stocks in the main exporting countries estimated price quotations, which are now 25 percent lower than last year.

The FAO dairy price index for September decreased by 2.4 percent, continuing the downward trend, while the FAO meat price index slightly decreased compared to its revised value for August.

The FAO's sugar price index is 21 percent lower than September 2017, and has increased by 2.6 percent since August, as current harvest operations in Brazil, the world's largest producer and exporter, indicate drought conditions that have had a negative impact on sugarcane yields. Sub-monsoon sediments in India and Indonesia also provided support for international sugar prices.

FAO expects global cereal consumption to grow to 2,647 million tons in the 2018/19 season, 1.1 percent more than in the previous year. World cereal trade is expected to close to 417 million tons, which is about 1.0 percent less than the record level of the 2017/18 marketing season. It is expected that the international trade in wheat and rice will decrease, while the volume of corn will increase.

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