UN FAO dairy index up again

Rising international quotations for vegetable oils, dairy products and meat pushed the benchmark index for world food commodity prices up by 1.1% in March, its first increase in seven months, the Food and Agriculture Organization of the United Nations (FAO) reported.

However, the FAO Dairy Price Index increased for the sixth consecutive month, up 2.9% from February, led by rising world cheese and butter prices. The FAO Dairy Price Index averaged 124.2 points in March, up 3.5 points from February, marking the sixth consecutive monthly increase, but remained 11.1 points (8.2%) below its value in the corresponding month last year. In March, world cheese prices increased the most, reflecting the steady import demand from Asia, higher internal sales in Western Europe leading to the spring holidays, and seasonally falling production in Oceania. Notwithstanding softer Asian demand, international butter prices increased further in March, mainly due to solid seasonal demand and somewhat tighter European stocks. By contrast, after five months of consecutive increases, international whole milk powder prices dropped as global import demand softened despite seasonally declining production in Oceania. Skim milk powder prices also fell, as markets remained quiet, with lower spot demand.

The FAO Food Price Index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, averaged 118.3 points in March, down 7.7% from its corresponding value one year ago. The FAO Vegetable Oil Price Index led the increase in March, rising 8% from February and reaching a one-year high as quotations for palm, soy, sunflower and rapeseed oils all rose. International palm oil prices increased due to seasonally lower outputs in leading producing countries and firm domestic demand in Southeast Asia, while those for soyoil recovered from multi-year lows, boosted by robust demand from the biofuel sector, particularly in Brazil and the US. The FAO Meat Price Index also increased, rising 1.7% from the previous month, with international prices up for poultry, pig and bovine meats.