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Cape Town - In June global food prices have shown the largest monthly increase the past four years, according to the latest Food Price Index (FFPI) by the Food and Agriculture Organisation of the United Nations (FAO).
It was also the fifth consecutive monthly increase. In June the FFPI was 4.2% higher than in May and 1% below the corresponding month in 2015.
The FFPI is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of five commodity group price indices - meat, dairy, cereals, vegetable oil and sugar. These are weighted with the average export shares of each of the groups for 2002 to 2004.
All the commodity sub-indices moved up in June, led by a surge in the price of sugar and more moderate increases for cereals, dairy and meat.
Except for vegetable oils, the values of all the commodity sub-indices moved up in June. The price of sugar shot up the most, while cereals, dairy and meat showed more moderate increases.
The FAO Cereal Price Index was up 2.9% from May, but still 3.9% below the June 2015 level. According to the FAO, there has been a tightening of spot maize export supplies in Brazil, reports of record wheat yields in the US and better than expected wheat harvests in the Black Sea region and subdued buying interest in rice.
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The FAO Vegetable Oil Price Index was 0.8% down in June compared to May, mainly due to subdued global import demand for for palm oil and prospects of ample sunflower and rapeseed oil supplies. Soy prices increased, though, due to reduced exports available in South America and less favourable anticipated production prospects for 2016/2017.
The FAO Dairy Price Index was up 7.8% in June compared to May. There is an uncertain outlook for milk in the Oceania region during the financial year 2016/2017 and a slowdown of growth in milk production in the European Union in April. The FAO report pointed out, however, that compared to June last year, the Dairy Price Index was down still down 14%.
The FAO Meat Price Index was 2.4% higher in June compared to May. Especially prices of pork - due to a shortage of pigs in the EU - mutton and lamb increased. Poultry meat prices have risen by 10% since January.
The FAO Sugar Price Index increased by 14.8% in June compared to May, mostly due to less positive production prospects - heavy rains - in Brazil, the world’s largest sugar producer and exporter. Larger volumes of sugarcane output were reportedly also diverted from sugar to ethanol production.
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