The Food and Agriculture Organization (FAO) of the United Nations reported that food prices dropped further in January. Lower prices for cereals and meat outweighed the increases in sugar prices, according to the FAO's food price index. The index, which tracks global prices for staple foods, averaged 118 points in January, down 1% from December and about 10% lower than the previous year.
Cereal Prices Decrease
In January, cereal prices fell by 2.2%, primarily driven by lower export prices for maize and wheat. The FAO attributed the sharp decline in maize prices to improved crop conditions and the start of harvest in Argentina, as well as ample supplies in the U.S. Meanwhile, wheat prices decreased due to intense competition among exporters and the arrival of recently harvested supplies in southern hemisphere countries.
Meat Prices Continue to Decline
Meat prices experienced a decline of 1.4% in January, marking the seventh consecutive month of decreases. Strong supplies of poultry, bovine, and pig meats from leading exporters were responsible for dragging down prices.
Sugar Prices Rise
On the other hand, sugar prices saw an increase of 0.8% compared to December levels. This rise was driven by concerns over the potential impact of Brazil's dryer-than-normal weather conditions on sugarcane crops set to be harvested in April. Moreover, unfavorable production outlooks in Thailand and India also contributed to the higher prices.
Vegetable Oil and Dairy Prices
Vegetable oil prices recorded a slight increase of 0.1% in January, mainly due to moderate rises in palm and sunflower seed oil prices. However, vegetable oil prices were still roughly 13% lower than they were a year ago. Dairy prices remained relatively stable compared to December, with a value standing almost 18% below last year's level.
For more information, refer to the latest report by the FAO.
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