FAO World Food Price Index Fell in January 2024 to lowest level since February 2021

World food prices as measured by the FAO Food Price Index continued to fall, down for a sixth month to 118 index points in January 2024, the lowest level since February 2021. The index is 13.7 points (10.4%) lower from a year ago, well off the record hit in March 2022 after Russia invaded Ukraine. Cereals prices were down 2.2% to December 2020-lows as global wheat export prices declined amid strong competition among exporters and arrival of recently harvested supplies in the southern hemisphere countries. Meat prices fell 1.4% amid persistent subdued global demand and ample exportable availabilities. Vegetable oil prices were little changed, as higher global palm and sunflower seed oil prices offset lower soy and rapeseed oil quotations.

Dairy cost was also stable as cost for butter and whole milk powder increased, nearly offsetting declines in skim milk powder and cheese. Sugar prices again were the anomaly amid concerns over lower global availabilities for both food and as a biofuel component. Sugar edged up 0.8% amid concerns over the likely impact of below-average rains in Brazil on sugarcane crops to be harvested from April, and the slow start of the new season and unfavorable production prospects in Thailand and India.

FAO Food Price Index

» The FAO Food Price Index* (FFPI) stood at 118.0 points in January 2024, down 1.2 points (1.0 percent) from its revised December level, as decreases in the price indices for cereals and meat more than offset an increase in the sugar price index, while those for dairy and vegetable oils only registered slight adjustments. The index stood 13.7 points (10.4 percent) below its corresponding value one year ago.

FAO Cereal Price Index

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

Global wheat export prices declined in January, driven by continued strong competition among exporters and arrival of recently harvested supplies in the southern hemisphere countries. Maize export prices fell sharply month-on-month, reflecting improved crop conditions and the start of the harvest in Argentina as well as larger supplies in the United States of America following an upward revision of its production estimates.

In tandem with wheat and maize prices, world prices of barley and sorghum also decreased in January.

Fertilized Wheat Crop

By contrast, the FAO All Rice Price Index increased by a further 1.2 percent in January, largely reflecting a rise in prices of higher quality Indica rice due to a strong pace of Thai and Pakistani shipments and additional purchases by Indonesia.

FAO Vegetable Oil Price Index

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

The steadiness in the price index month-on-month reflected the combined effects of higher global palm and sunflower seed oil prices offsetting lower soy and rapeseed oil quotations. International palm oil prices increased moderately in January, primarily underpinned by seasonally lower production in major producing countries and concerns over unfavorable weather conditions in Malaysia.

Meanwhile, world sunflower seed oil quotations edged up, driven by increased import demand, particularly from Türkiye. By contrast, international soy and rapeseed oil prices declined on account of, respectively, prospects for large supplies from South America and lingering ample availabilities in Europe.

FAO Dairy Price Index

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

In January, international price quotations for butter and whole milk powder (WMP) increased, nearly offsetting declines in those for skim milk powder (SMP) and cheese. World butter prices rose due to increased demand from Asian buyers, coupled with more robust demand from the retail sector for replenishing stocks and lighter inventories in Western Europe.

Meanwhile, WMP prices also increased, reflecting increased demand for medium-term deliveries, especially by China, and seasonally falling production in New Zealand. By contrast, international prices of SMP and cheese declined as demand for spot supplies remained muted and immediate requirements of buyers were adequately covered.

FAO Meat Price Index

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

International price quotations for poultry meat fell further in January, underpinned by persistent subdued global demand and ample exportable availabilities in leading exporting countries. Similarly, pig meat quotations declined slightly due to a drop in import purchases by China in line with rising national pig meat production and abundant supplies from some producing countries. World bovine meat prices also fell marginally, primarily reflecting high export supplies from Oceania and South America.

By contrast, international ovine meat prices increased on high global import demand and lower supplies of animals for slaughter in Oceania as recent rains have incentivized farmers to retain animals longer.

  • Unlike for other commodity groups, most prices utilized in the calculation of the FAO Meat Price Index are not available when the FAO Food Price Index is computed and published; therefore, the value of the Meat Price Index for the most recent months is derived from a mixture of projected and observed prices. This can, at times, require significant revisions in the final value of the FAO Meat Price Index which could in turn influence the value of the FAO Food Price Index.

FAO Sugar Price Index

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

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

However, large supplies from the recently completed harvest and lower returns from ethanol sales in Brazil, together with the weakening of the Brazilian real against the United States dollar, contributed to limiting the month-on-month increase in world sugar prices.

About FAO Food Price Index

The FAO Food Price Index (FFPI) 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.  A feature article published in the June 2020 edition of the Food Outlook presents the revision of the base period for the calculation of the FFPI and the expansion of its price coverage, to be introduced from July 2020. A November 2013 article contains technical background on the previous construction of the FFPI.

Monthly release dates for 2024 (tentative): 5 January, 2 February, 8 March, 5 April, 3 May, 7 June, 5 July, 2 August, 6 September, 4 October, 8 November, 6 December.

Source: TC, FAO

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