The Food Price Index, released by the Food and Agriculture Organization of the United Nations (FAO) today in Rome, rose in May for the fourth month in a row, increasing by 2.1 per cent from April to 155.8 points – still some 7 per cent below the level reported one year ago. The surging sugar prices has been the major reason behind the rising of the Index.
Prices rose across the index – a trade-weighted index tracking international market prices for the cereals, vegetable oils, dairy, meat and sugar commodity groups – with the exception of vegetable oils, which subsided after a strong hike in April.
The FAO Sugar Price Index led the increase, surging 11.7 per cent from the previous month, as deteriorating production prospects in India, the world’s number two sugar producer, outweighed a bumper crop and large export availabilities in Brazil, the leading producer.
The FAO Cereal Price Index rose 1.6 per cent from April, led by a sharp increase in maize prices and buoyed by stronger quotations for Indica and aromatic rice varieties.
The FAO Meat Price Index rose 2 per cent, spurred by brisk import demand from Asia for pigmeat from the European Union.
The FAO Dairy Price Index, which is 24 per cent below its level of a year-ago, also eked out a 0.4 per cent increase thanks to improved prices in the EU and sustained international demand for whole milk powder and butter.
The FAO Vegetable Oil Price Index declined 1.8 per cent, as palm oil receded after three months of sharp gains. Import demand for the food industry mainstay was weaker than anticipated in China, India and the EU.