The UN Food and Agriculture Organization’s measure of global food commodity prices eased again in February on significant drops in prices of dairy products and vegetable oils and fractionally lower costs for grains and meat.
The FAO Food Price Index was down 0.6% to an average of 129.8 points last month, the 11th straight month of declines. The index is now 18.7% below the peak reached in March 2022 on the heels of Russia’s invasion of Ukraine.
The dairy index fell 2.7% in February and is down 7.2% from February 2022. Prices for all dairy categories fell from January to February, with the largest declines for butter and skim milk powder. FAO attributes the price drops to weaker global demand, plus increased supplies of butter, cheese and skim milk powder in western Europe.
The vegetable oil index dropped 3.2% in February to its lowest level since early 2021. “The continued weakness of the index was driven by lower world prices across palm, soy, sunflower seed and rapeseed oils. International palm oil prices dropped for the third consecutive month in February, chiefly weighed by lingering sluggish global import demand, despite seasonally lower production from major growing regions in Southeast Asia,” FAO said.
Soybean oil prices were down, too, because of weaker import demand and the prospects for higher production in South America, FAO said.
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The index for cereal grains was off slightly, 0.1%, in February, but it's still 1.4% above its level a year ago. FAO said concerns about dry conditions in areas of the United States that grow hard red winter wheat continue to weigh on markets.
Corn prices were up 0.1% from January, due to “worsening conditions in Argentina, and planting delays for the second maize crop along with a strong export pace in Brazil,” FAO said.
The meat index was also 0.1% lower in February and is down 1.7% from a year ago. Despite continued outbreaks of avian influenza, poultry prices “fell for the eighth consecutive month, reflecting abundant global supplies compared to softer import demand," FAO said.
Pork prices increased last month, "underpinned by market concerns over the low availability of slaughter-ready hogs amid rising internal demand in Europe,” FAO said. Beef prices were flat in February.
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