MercoPress. South Atlantic News Agency

FAO's food price index remains stable in October: 'very good for importing countries'

The ongoing slight decline in the index is “very good for food importing countries,” FAO senior economist Concepción Calpe said in an interview. The shifts come as FAO raised its forecast for a record

FAO's monthly food price index was stable in October, as sugar and vegetable oil prices rose to offset declines in dairy and meat prices. The Food Price Index dipped to 192.3, technically, its seventh consecutive monthly decline, but a marginal 0.2% drop from the revised September figure.

 The ongoing slight decline in the index is “very good for food importing countries,” FAO senior economist Concepción Calpe said in an interview. The shifts come as FAO raised its forecast for a record global wheat output this growing season.

Dairy prices fell by 1.9%, as butter and milk powder prices dipped due to increased output in Europe, where many producers are grappling with Russia's ban on cheese imports. The sub-index for dairy products dropped to 184.3, down 3.5 points from September, and 66.8 points, or 26.6% down from October 2013.

Meat prices also broadly declined, as pig production recovered in several countries hit by endemic porcine diarrhoea and growing cattle herds in Australia pushed down beef prices. FAO's Meat Price Index fell by 1.1% or 2.3 points from September to 208.9, still more than 10% above its level a year ago.

The Cereal Price Index, which fell sharply over the recent months as global wheat and maize production appeared set for record harvests, was broadly stable at 178.4 points in October as maize harvest delays in the United States and deteriorating prospects for Australia's wheat crop led to firmer prices. Rice prices declined, however, as newly harvested supplies came to market. The cereals sub-index is now down 9.3%, or 18.2 points below the level one year ago.

Overall, the Food Price Index is at its lowest levels since August 2010.

FAO's Food Price Index is a trade-weighted index that consists of the average of five commodity group price indices - cereals, meat, dairy products, vegetable oils, and sugar.

The Sugar Price Index rose to 237.6 points, a brisk 4.2% increase from the previous month, due largely to drought in parts of Brazil, leading to reports that the sugarcane crop will be smaller than expected. Despite the month's gains, international sugar prices remain more than 10 percent below their October 2013 level.

The vegetable oils sub-index rose for the first time since March, clocking in at 163.7 points in October, up 1.0%, or 1.6 points from September. Palm oil production slowdowns in Indonesia and Malaysia, combined with a revival in global import demand, sustained the increase. Soy oil prices weakened due to robust North American harvest prospects, while sunflower seed oil quotations rose due to smaller than expected harvests in the Black Sea region. The oils index is down 12.9% from October 2013.