WASHINGTON, October 4, 2012- After two months of stability, the FAO Food Price Index rose slightly in September 2012, up 1.4 percent, or 3 points, from its level in August.

The Index, which is based on the prices of a number of internationally traded food commodities, climbed from its August level of 213 points to 216. The small jump reflects a stronger dairy and meat market, and a modest increase for cereals. Sugar and oil prices, however, fell. The current September Index is still 22 points below its peak in February 2011, at 238 points, and 9 points below the level in September of last year.

The FAO Meat Index also rose. At 175 points, the Index is up 4 points, or 2.1 percent, since August.  Grain-intensive pig and poultry sectors are particularly robust, up 6 percent and 2 percent respectively.

The FAO Dairy Index averaged 188 points in September, up 7 percent, or 12 points, from August. This is the Index’s sharpest monthly increase since January 2011.

Meanwhile, FAO's latest forecasts confirm a decline in global cereal production this year from the record registered in 2011. At the currently forecast level, world cereal production in 2012 would be 2.6 percent down from the previous year's record crop but close to the second largest in 2008. World production of cereals has been affected by drought in key producing areas, including the United States, Europe, and Central Asia.

But record harvests are expected in Low-Income Food-Deficit Countries (LIFDCs). Its forecast for the LIFDCs' 2012 aggregate cereal production points to a record level of 534 million tonnes, up 1.7 percent from the good harvest of 2011. Nonetheless, currently high prices are expected to drive the 2012/13 cereal import bill for LIFDCs to a record $36.5 billion, compared to $35.2 billion in 2011/12. 


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