Info Service on WTO and Trade Issues (Aug18/03)
8 August 2018
Third World Network
United Nations: Food commodity
prices fell sharply in July
Published in SUNS #8737 dated 7 August 2018
Geneva, 6 Aug (Kanaga Raja) - The international prices of a basket
of key agricultural food commodities fell sharply in July, with notable
drops in the values of all the major traded items, the UN Food and
Agriculture Organisation (FAO) has said.
According to FAO, its Food Price Index (FFPI) averaged 168.8 points
in July 2018, down as much as 6.5 points (3.7 percent) from June and
10.3 points (3.7 percent) from the corresponding period last year.
The July fall marked the first significant month-on-month decline
in the value of the FFPI since December 2017, reflecting notable drops
in the values of all sub-indices, it said.
The FAO Cereal Price Index averaged 160.9 points in July, down nearly
6 points (3.6 percent) from June and also 1.3 points (0.8 percent)
below its level in the corresponding period last year.
FAO attributed the decline in July to weaker export quotations for
wheat, maize and rice.
International wheat prices were generally weaker during the first
half of the month, but concerns over production prospects in the European
Union and the Russian Federation started to push export values higher
towards the end of the month, it said.
In coarse grains markets, maize prices remained under general downward
pressure, largely on weak demand and good production prospects in
the United States.
However, similar to wheat markets, maize values made solid gains towards
the end of the month, on weather worries and a faster pace in export
International rice prices also fell, pressured by frail demand for
Indica and fragrant varieties as well as currency movements in some
The FAO Vegetable Oil Price Index averaged 141.9 points in July, down
4.2 points (or 2.9 percent) from June, marking a sixth consecutive
fall and a two-and-a-half year low.
The latest slide mostly reflects weakening values of palm oil and
soy oil, said FAO.
FAO said part of the July slide was driven by spill-over weakness
from the soybean market, which is affected by the trade dispute between
China and the US.
"International palm oil prices fell further under the influence
of sluggish export demand, ample stocks held by leading producing
countries, and expectations of higher production in the coming weeks."
As for soy oil, FAO said that the fresh drop in prices was largely
driven by spill-over weakness from the soybean market and persistently
high crushing rates in the United States, supported by attractive
On the other hand, FAO added, rapeseed oil values trended upward,
underpinned by improved demand from biodiesel producers and negative
crop prospects in the EU.
The FAO Meat Price Index averaged 170.7 points in July, down 3.3 points
(1.9 percent) from its revised value for June.
The June upward revision primarily reflects a sharp rise in bovine
meat prices from Brazil, caused by a decline in exports following
logistical problems due the prolonged truck drivers' strike.
In July, said FAO, the Index shed few points, in part due to a gradual
normalization of meat exports from Brazil.
Overall, price quotations for bovine meat fell, while those of pig
and poultry meat also weakened.
However, ovine meat (lamb and mutton) prices increased marginally
on strong import demand, especially from China and the United States.
The FAO Dairy Price Index averaged 199.1 points in July, down 14.1
points (6.6 percent) from June.
"At this level, the index stood at 10.7 percent above January
2018 but still 8 percent below the corresponding month a year ago."
According to FAO, international price quotations across all dairy
commodities (represented in the Index) fell, with the sharpest falls
registered for butter and cheese.
Whole Milk Powder (WMP) and Skim Milk Powder (SMP) prices also weakened,
"Dairy markets have remained under downward pressure, supported
by ample export supplies, including good production prospects in New
The FAO Sugar Price Index averaged 166.7 points in July, down 10.7
points (6 percent) from June and nearly 20 percent lower than its
level in the corresponding period of last year.
The sharp decline in July was largely driven by improved production
prospects in the main sugar producing countries, notably India and
Expectations of lower sugar output in Brazil, the world's largest
producer and exporter, resulting from protracted drought conditions,
as well as a greater use of sugarcane for the production of ethanol,
limited the fall in international sugar prices, said FAO.