MercoPress. South Atlantic News Agency

Dairy values and meat peaked in 2013 according to FAO Food Price Index

Demand for milk powder, from China, remains strong and processors are focusing on this product rather than on butter and cheese

The FAO Food Price Index averaged 206.7 points in December 2013, nearly unchanged from November, as a sharp increase in dairy prices and firming meat values largely balanced out a steep decline in sugar quotations and lower cereal and oil prices.

 Over the full 2013 year, the Index averaged 209.9 points, down 1.6 percent from 2012, but still the third highest annual value on record. Large supplies pushed down international prices of cereals (with the exception of rice), oils and sugar. However, dairy values peaked in 2013, while meat also hit a record.

» The FAO Cereal Price Index averaged 191.5 points in December, down 2.8 points, or 1.4 percent, from November and the lowest monthly value since August 2010. Large global supplies, following record harvests in 2013, continued to exert downward pressure on international prices of wheat and maize in particular. By contrast, rice prices were up slightly in December, sustained mainly by firming aromatic and japonica rice quotations. In 2013, the Cereal Price Index averaged 219.2 points, down as much as 17 points, or 7.2 percent, from 2012.

» The FAO Vegetable Oil Price Index averaged 196 points in December, down 2.5 points, or 1.3 percent, from November. The fall in the Index was mainly driven by a weaker import demand for palm oil. Soybean oil prices also weakened, reflecting ample soybean supply prospects in South America, while large harvests of rapeseed and sunflowerseed also contributed to the general easing in vegetable oil prices. For 2013 as a whole, the Index averaged 193 points, which compares with 224 points in 2012, with palm oil, the vegetable oil with the highest weight in the Index, falling to a 4-year low.

» The FAO Dairy Price Index averaged 264.6 points in December, a rise of 13.2 points, or 5.2 percent, over November. Demand for milk powder, especially from China, remains strong and processors in the southern-hemisphere are focusing on this product rather than on butter and cheese. As a result, in context of light trading and most supplies being already committed, prices of the latter products have risen more than those for milk powder. During 2013, the Index averaged 243 points, its highest annual value since its inception, thereby exceeding the previous maximum of 230 points reached in 2011.

» The FAO Meat Price Index averaged 188.1 points in December, 0.8 points above November. Prices for bovine and pig meat moved higher: demand from China and Japan have resulted in beef prices showing consistent growth since the middle of the year. Prices for poultry were stable, while those for sheep meat moved lower, which coincided with the seasonal slaughter peak in the southern-hemisphere. In 2013, the Index remained at historically high levels, averaging 184 points, compared to 182 points in 2012 and 183 points in 2011.

» The FAO Sugar Price Index averaged 234.9 points in December, down 15.8 points, or 6.3 percent, from November. Sugar prices declined for the third consecutive month in December as the sugarcane harvest in Brazil, the world’s largest sugar producer and exporter, exceeded expectations. Adding to the downward pressure on international prices were reports of record production in Thailand, the second biggest world exporter of sugar, as well as good harvests in China. Overall in 2013, sugar prices were down 18 percent in comparison to 2012, on the back of greater export availabilities.