FAO Food Price Index down for seventh straight month
Adjusted for inflation, FAO’s October Food Price Index (FPI) fell by 0.1 percent from August, the sixth straight monthly decline. Year on year, the index is up about 0.3 percent—a minor difference compared to the double-digit YOY growth seen from early 2021 through July 2022.
While the slower price inflation is surely welcome news to many, the multiyear comparison remains stark: Food prices are still up nearly 39 percent vs. the five-year average.
The meat, dairy, and oils subindexes showed the steepest declines in October.
As was the case in September, the grains index was the only one showing month-on-month gains. Unsurprisingly, uncertainty over Black Sea exports drove a wheat rally. Concerns over European and North and South American production also buoyed wheat and corn pricing. Rice, too, is seeing a bullish tone. Cereals are now up 9 percent YOY.
Vegetable oils fell for the seventh straight month in October on declines for soybean, palm, and canola, only partly offset by higher quotes for sunflower oil. Southeast Asia stocks for palm oil, per FAO, are ample, while quotes for canola and soybean oil were trimmed; naturally, uncertainty over Ukraine exports is supportive of sunflower oil prices.
The sugar index fell for a sixth straight month in October. Supply uncertainty will remain in play ahead of the true start of India’s crop within the next month and the April start of Brazil’s center-south harvest; meanwhile, buying by major Asian markets like China and Indonesia is keeping prices from falling. Together, Brazil and India may account for as much as 40 percent of global sugar production in 2022/23. Along with oils, sugar is the only other index down YOY.
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