Global food costs fall despite rising grain prices | 2022-10-07

Global food prices fell for the sixth month in a row in September, led by lower prices for vegetable oil and dairy and meat products, which offset gains in grain markets.

The Food Price Index of the Food and Agriculture Organization of the United Nations averaged 136.3 last month, down 1.1% from August but still 5.5% higher than September 2021 and slightly above January’s reading of 135.6 .

The FAO Foodgrains Price Index rose 1.5% in August, driven by a 2.2% rise in wheat prices, partly due to “increased uncertainty” over Ukraine’s Black Sea exports and dry conditions in the US and Argentina.

On Friday, the FAO separately cut its forecast for world grain production in 2022 to 2.8 million tonnes, down 1.7% from 2021. Production of corn and other coarse grains is forecast to fall 2.8% this year, largely due to weather problems in the US.

Vegetable oil prices fell 6.6% in September due to continued declines in prices for palm, soybeans, sunflower and rapeseed, known as canola in North America. The fall in soybean oil prices was due to “increased export opportunities in Argentina,” the FAO said.

The FAO dairy price index fell 0.6% in September, while meat prices fell 0.5%, despite rising pork prices.

The decline in dairy prices was largely due to “the impact of the weakening of the euro against the US dollar on world dairy prices,” the FAO said.

Currency movements were also a factor in lower beef prices last month. Greater “availability of exports from Brazil and increased cattle culls in some producing countries” also helped lower beef prices, the FAO said. Poultry prices also fell slightly, helping to offset higher pork prices due to falling production in the European Union.

Sugar prices fell by 0.7 percent in September.