International food commodity prices shot up 4.2% in June, their steepest monthly increase of the past four years. The FAO Food Price Index averaged 163.4 points in June and is now one percent below the level reached a year earlier. The June rise, which affected all commodity categories except vegetable oils, was the fifth consecutive monthly increase.
The price movement reflects FAO's updating of its cereal supply and demand forecasts for the 2016/17 marketing season. FAO's Food Price Index is a trade-weighted index tracking international market prices for key traded food groups.
The FAO Sugar Price Index rose 14.8% from May, as Brazil, the world's largest sugar producer and exporter, endured heavy rains that hindered harvesting and dented yields.
The FAO Cereal Price Index rose 2.9% in the month and is now 3.9 percent below its level of June 2015. Maize prices drove that increase, primarily due to tightening spot export supplies from Brazil. Ample wheat supplies and reports of record yields in the United States held down wheat prices.
The FAO Dairy Price Index rose 7.8% from May, spurred by an uncertain outlook in Oceania and slower production growth in the European Union. Nonetheless, the index remained 14 percent below its level of a year ago.
The FAO Meat Price Index rose 2.4% from its revised May value, as average quotations for pork, beef and poultry all rose for the third consecutive month. The FAO Vegetable Oil Price Index defied the trend, declining 0.8% from its May level.