The reference indicator for global food prices moderately decreased in October, with a 0.5% decline compared to September, reported the United Nations Food and Agriculture Organization (FAO) on Friday.

Consistent Decrease

The FAO Food Price Index, which tracks monthly changes in international prices of a set of globally traded food commodities, averaged 120.6 points in October, down 10.9% from its corresponding value a year earlier.

The FAO Cereal Price Index decreased by 1.0% compared to the previous month. International prices for rice fell by 2.0% due to generally subdued global import demand, while wheat prices dropped by 1.9%, burdened by strong supplies from the United States and intense competition among exporters. However, coarse grain quotations increased slightly, led by corn due to thin deliveries from Argentina.

The FAO Vegetable Oil Price Index decreased by 0.7% compared to September, as lower global prices for palm oil, due to higher seasonal production and reduced global import demand, offset higher prices for soybean, sunflower, and rapeseed oils. Soybean oil prices increased due to strong demand in the biodiesel sector.

The FAO Sugar Price Index decreased by 2.2% but remained 46.6% above the level of the previous year. The October decline was mainly driven by a strong production pace in Brazil, although concerns about tighter global supply prospects next year capped the decrease.

Minus for Meat, Plus for Milk

The FAO Meat Price Index decreased by 0.6% as slow import demand, especially from East Asia, led to a decline in international prices for pork, more than offsetting marginal increases in prices for poultry, beef, and sheep meat.

In a contrasting trend, the FAO Dairy Price Index increased by 2.2% in October, ending a nine-month decline. Global prices for milk powder increased the most due to rising import demand for both short-term and long-term deliveries, as well as some uncertainty about the impact of El Niño weather conditions on future milk production in Oceania.

Conflicts and Weak Currencies Worsen Hunger in Vulnerable Countries

The persistence and intensification of conflicts exacerbate food insecurity, and the moderation of international food prices is countered by weak currencies in many low-income countries. A total of 46 countries worldwide, including 33 in Africa, need external food assistance, according to the latest report on crop prospects and food situation, a triennial publication of FAO's Global Information and Early Warning System (GIEWS) released today.

It is estimated that over half of the population in the Gaza Strip is already in acute food insecurity in 2022, and the escalation of the conflict there will increase the need for humanitarian and emergency assistance, even as access to affected areas remains a alarming concern, said FAO, adding that the ripple effects of the conflict could worsen food insecurity in Lebanon.

While global cereal production is estimated to increase by 0.9% in 2023 compared to the previous year, the growth rate will be half of this rate for the group of 44 low-income food-deficit countries (LIFDC), notes the report.

The report provides detailed information on food insecurity and price trends faced by people on the ground in affected countries. It also offers a comprehensive assessment of regional cereal production and global trade prospects.