FAO Food Price Index up for third consecutive month

• World food prices climbed in April for a third consecutive month amid elevated energy costs and disruptions caused by the Iran war, according to the latest release by the Food and Agriculture Organisation of the United Nations (FAO).

• The FAO Food Price Index averaged 130.7 points in April, up 1.6 per cent from its revised March level and 2 per cent higher than a year ago.

• The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities. 

• It consists of the average of five commodity group price indices weighted by the average export shares of each of the groups over 2014-2016.

• Vegetable oils are experiencing stronger price increases, driven largely by higher oil prices, which are increasing demand for biofuels and putting additional pressure on vegetable oil markets.

• The FAO Vegetable Oil Price Index increased by 5.9 per cent from March, reaching its highest level since July 2022. 

• The rise was driven by higher prices of palm, soy, sunflower and rapeseed oils. 

• International palm oil prices rose for the fifth consecutive month in April, largely underpinned by prospective stronger demand from the biofuel sector, supported by policy incentives in several producing countries and higher crude oil prices.

• The FAO Cereal Price Index rose by 0.8 per cent from March and was up 0.4 per cent from a year ago, reflecting higher prices across major cereals, except sorghum and barley. 

• World wheat prices increased by 0.8 per cent, due to concerns over drought in parts of the United States of America and a higher likelihood of below-average rainfall in Australia.

• Global maize prices increased by 0.7 per cent, underpinned by seasonally tighter supplies and weather-related concerns in Brazil, as well as dry conditions affecting sowing in parts of the United States. 

• Additional upward pressure came from firm ethanol demand amid elevated crude oil prices and ongoing concerns over fertilizer affordability.

• The FAO Meat Price Index reached a new record high in April, rising by 1.2 per cent from March and 6.4 percent from a year ago. 

• By contrast, the FAO Dairy Price Index declined by 1.1 per cent from March, mainly reflecting lower international quotations for butter and cheese amid abundant milk supplies in the European Union and stronger-than-expected late-season output in Oceania.

• The FAO Sugar Price Index also dropped, down 4.7 per cent from March and as much as 21.2 per cent from a year ago. 

• The decrease was largely driven by expectations of ample global supplies in the current season, reinforced by improved prospects in key Asian producing countries, notably China and Thailand.