Increases in wheat and corn prices kept the UN’s benchmark for global food costs largely unchanged in October after six straight months of declines.
The UN Food and Agriculture Organization’s Food Price Index averaged 135.9 points in October, negligibly below its level of 136.3 in September and 2% above the level a year ago. The index is down 14.9% from its peak in March at the outset of the Russian war in Ukraine.
The benchmark for cereal grains rose 3% in October due to a 4.3% increase in corn prices, caused in part by lower production forecasts in the United States and Europe, and a 3.2% increase in wheat prices sparked by uncertainty about Black Sea shipping and a downward revision in the U.S. production estimates.
Despite those price increases, the grain index is still more than 10% off its March peak.
The month ended with Russia announcing that it would suspend its participation in the Black Sea Grain Initiative, which has allowed grain and other commodities to move out of Ukraine’s Black Sea ports. Russia shifted gears this week, but the agreement is still due to expire Nov. 19 unless an agreement can be reached to extend.
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Prices for other commodity groups all declined, led by a 1.7% drop in dairy prices and a 1.6% decline in the index for vegetable oils.
FAO attributed the decline in dairy prices to lower than expected buying from China as well as the weakening of the Euro against the dollar. The vegetable oil index fell because of lower prices for palm, soybean and rapeseed (canola) oil.
The index for meat was down 1.4% because of lower prices for beef and pork as well as poultry “on broadly subdued global import demand and increasing exportable supplies,” FAO said.
The benchmark for sugar prices declined 0.6% because of better production prospects in India.
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