Adjusted for inflation, FAO’s Food Price Index (FPI) rose for the third straight month in October, up a respectable 3 percent YOY from September and up 29 percent YOY. The oils, cereals, and dairy indexes all recorded gains from September, the meat index fell for the third month, and the sugar index fell for the first time since March.
The oils index saw the biggest relative growth in October and is seeing the highest growth YTD. World pricing remains bullish for soybean, palm, canola, and sunflower oils with the entire sector buoyed by strengthening import demand, crude oil appreciation, and concerns over Malaysia’s farm labor shortage.
Cereals are seeing broad bullishness over Northern Hemisphere crops (U.S., Russia, Canada) on supply concerns for wheat, barley, corn, and rice. Corn has seen support from supply and logistics concerns—that may ease in the coming months—and from rising energy prices.