FAO, the Food Price Index (FFPI), stood at 118.0 points in January 2024, down by 1.2 points (1.0 percent) from the revised level in December, as declines in cereal and meat prices largely offset a rise in sugar prices, while those for dairy and vegetable oils recorded only slight adjustments. The index was 13.7 points (10.4 percent) below its value a year ago. Let's look at the data for the main product categories.

Cereals

The FAO Cereal Price Index averaged 120.1 points in January, down by 2.7 points (2.2 percent) from December and by up to 27.4 points (18.6 percent) from its January 2023 value.

Global wheat export prices fell in January, reflecting continued strong competition among exporters and recently harvested supplies in southern hemisphere countries. Export prices of maize sharply decreased from month to month, reflecting improved crop conditions and the start of the harvest in Argentina, as well as increased supplies in the United States following upward revisions to its production estimates.

In tandem with wheat and maize prices, global barley and sorghum prices also declined in January. Conversely, the FAO Rice Price Index increased by another 1.2 percent in January, largely reflecting higher prices of higher-quality Indica rice due to strong delivery rates from Thailand and Pakistan and additional purchases by Indonesia.

Vegetable Oils

The FAO Vegetable Oil Price Index averaged 122.5 points in January, marginally up by 0.2 points (0.1 percent) from the previous month, but still down by 17.9 points (12.8 percent) from January 2023.

The stability in the month-to-month price index reflected the combined effects of rising global palm oil and sunflower seed oil prices, which compensated for lower quotations for soybean and rapeseed oils.

International palm oil prices moderately increased in January, primarily supported by seasonally lower production in major producing countries and concerns over adverse weather conditions in Malaysia.

Meanwhile, global sunflower seed oil quotations also rose, reflecting increased demand for medium-term deliveries, especially from Turkey. In contrast, international soybean and rapeseed oil prices decreased due to, respectively, large supply prospects from South America and persistent ample availabilities in Europe.

Dairy

The FAO Dairy Price Index averaged 118.9 points in January, practically unchanged from its revised value in December and standing 25.8 points (17.8 percent) below its level in the corresponding month a year ago.

International price quotations for butter and whole milk powder (WMP) increased, almost compensating for decreases in those for skim milk powder (SMP) and cheese. Global butter prices rose due to increased demand from Asian buyers, coupled with stronger retail demand for restocking and lighter inventories in Western Europe.

Meanwhile, WMP prices also increased, reflecting increased demand for medium-term deliveries, especially from China, and seasonally lower production in New Zealand. In contrast, international prices for SMP and cheese decreased as spot supply demand remained subdued, and immediate buyer requirements were adequately covered.

Meat

The FAO Meat Price Index averaged 109.8 points in January, down by 1.5 points (1.4 percent) from December, marking the seventh consecutive monthly decline and standing 1.3 points (1.2 percent) below its value a year earlier.

International poultry meat prices continued to decline in January, supported by persistent low global demand and ample export supplies in top exporting countries.

Similarly, pig meat prices decreased slightly due to reduced import purchases by China, in line with increased domestic pork production and abundant supplies from some producing countries.

Global beef prices also decreased marginally, primarily reflecting large export shipments from Oceania and South America. In contrast, international sheep meat prices increased due to high global import demand and lower slaughter animal supplies in Oceania, as recent rains encouraged farmers to hold animals for longer.

Sugar

The FAO Sugar Price Index averaged 135.3 points in January, up by 1.1 points (0.8 percent) from December and by 18.5 points (15.9 percent) from a year ago.

The increase in global sugar prices was primarily driven by concerns about the likely impact of below-average rains in Brazil on sugar cane crops to be harvested from April, together with the slow start of the new season and unfavorable production prospects in Thailand and India, two major producing countries.

However, large deliveries from the recently completed harvest and lower profits from ethanol sales in Brazil, together with the weakening of the Brazilian real against the US dollar, contributed to limiting the month-to-month growth in global sugar prices.