A measure of world food commodity costs fell for the sixth month in a row in September, led by lower prices for vegetable oils and dairy and meat products that offset gains in grain markets.
The UN Food and Agriculture Organization’s Food Price Index averaged 136.3 points last month, down 1.1% from August but still 5.5% higher than September 2021 and just above the January reading of 135.6 points.
FAO’s index of food grain prices rose 1.5% in August, led by a 2.2% increase in wheat prices that resulted in part from “heightened uncertainty” about exports from Ukraine’s Black Sea exports and dry conditions in the United States and Argentina.
On Friday, FAO separately lowered its forecast for global grain production in 2022 to 2.8 million tons, a drop of 1.7% from 2021. Production of corn and other coarse grains are projected to fall 2.8% this year, largely due to U.S. weather problems.
Vegetable oil costs declined 6.6% in September, due to a continued decline in prices for palm, soy, sunflower and rapeseed, known as canola in North America. The drop in soybean oil prices was due to “elevated export availabilities in Argentina,” FAO said.
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FAO's index of dairy prices declined 0.6% in September and the measure of meat prices was down 0.5%, despite an increase in pork prices.
The softening in dairy prices was largely due to the “impact of the weaker euro against the United States dollar in world dairy prices,” FAO said.
Currency movements also were a factor in a decline in beef prices last month. Higher “export availabilities from Brazil and elevated cattle liquidation in some producing countries" also helped push down beef costs, FAO said. Poultry prices also declined slightly, helping offset an increase in pork prices due to falling production in the European Union.
Sugar prices declined by 0.7% in September.