WASHINGTON, August 9, 2012- The UN Food and Agriculture Organization (FAO) reported today a six percent increase in its Food Price Index for July 2012. The spike was largely driven by a surge in grain and sugar prices, while international prices of meat and dairy mostly sustained.
The FAO Sugar Price Index jumped 12 percent, or 34 points, from June to a new level of 324 points. FAO reported the upturn was triggered by untimely rains in Brazil, the world's largest sugar exporter, which hampered sugarcane harvesting. Concerns over India's delayed monsoon and poor rains in Australia also contributed, according to the organization.
The FAO Cereal Price Index hit just 14 points below its record high of 274 points in April 2008 with an average 260 points in July, up 17 percent, or 38 points, from June.
“The severe deterioration of maize crop prospects in the United States following extensive drought damage pushed up maize prices by almost 23 percent in July,” according to the release.
International wheat quotations also surged 19 percent amid worsened production prospects in Russia, while international rice prices remained stable with barely one point above June.
Meat prices fell 1.7 percent, or 3 points from June with the third consecutive monthly fall.
“Market weakness characterized the four major meat sectors, in particular pigmeat, which saw prices fall by 3.6 percent,” according to the report.
Dairy prices averaged 173 points in July, unchanged from June, after five straight months of decline.
The overall Index averaged 213 points, up 12 points from June, below the peak of 238 points reached in February 2011.
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