By Victor Uzoho
The Food and Agriculture Organisation (FAO), has disclosed that the global food commodity prices witnessed a rebound in January, led by vegetable oil and dairy after a slight decline.
This was disclosed in the FAO Food Price Index (FPI) report released Thursday, which tracks the international prices of most commonly traded food commodities.
According to the United Nations agency, the FPI averaged 135.7 points in January 2022, which is 1.1% higher than figures recorded in December 2021.
Also, the report showed that Vegetable Oil Price Index averaged 185.9 points in January, up by 4.2% month-on-month, marking an all-time high.
The report stated, “The Food Price Index rebound in January was led by solid gains in vegetable oils and dairy sub-indices, partially offset by a decline in sugar prices for the second consecutive month with meat and cereal sub-indices remaining largely unchanged.”
“The rise reflected higher quotations for palm, soy, rapeseed and sunflower seed oil. After a short-lived drop, international palm oil prices rebounded in January, largely underpinned by concerns over a possible reduction in export availabilities from Indonesia, the world’s top palm oil exporter, as well as subdued output in key producing countries.
“World soy oil prices also recovered, supported by robust import purchases, particularly from India. In the meantime, rapeseed and sunflower seed oil prices were buoyed by, respectively, lingering supply tightness and surging global import demand. In addition, rising crude oil prices also lent support to international vegetable oil values.”
Furthermore, the report showed that the Dairy Price Index averaged 132.1 points in January, up by 2.4% from December 2021, marking the fifth consecutive monthly increase, and placing the index 18.7% above its value in the corresponding month last year.
The Food Price Index rebound in January was led by solid gains in vegetable oils and dairy sub-indices, partially offset by a decline in sugar prices for the second consecutive month with meat and cereal sub-indices remaining largely unchanged.
However, the January increase was underpinned by tightening global markets, reflecting a reduction in export availability, especially from Western Europe, where a reported reduction in milk deliveries in some large milk-producing countries and lower stock levels supported prices.
The report highlighted that milk processing and transportation delays due to COVID-19-related labour shortages further contributed to higher dairy prices.
According to the report, the FAO Meat Price Index averaged 112.6 points in January, up slightly from December 2021, and lifting the index value by 17.3% above its corresponding month in 2021.
“In January, bovine prices reached a new peak, underpinned by strong global import demand exceeding export supplies, mainly from Brazil and Oceania, reflecting lower cattle supplies for processing. Meanwhile, pig meat quotations rose slightly, as labour shortages and high input costs dampened global supply, countering the downward pressure from China’s slowdown in imports.
“World wheat prices eased in January, down 3.1%, with increased seasonal supplies from large harvests in Australia and Argentina. However, support from continued strong demand amidst tight global availability of higher-quality wheat along with uncertainty over exportable supplies prevented prices from declining further.
“Among other coarse grains, international sorghum prices also rose in January, in line with maize price trends, while barley quotations were slightly lower. The completion of main-crop harvests in major suppliers and purchases by Asian buyers also raised international rice prices in January by 3.1%,” the report reads.