Food Watch

Global food prices decline but sweet tooth can set you back

Chocolate could leave purse thinner
Chocolate.jpg

Global stocks of your favourite breakfast cereal are on the rise to reach record levels, but beware, sugar prices are on the up. The global rice harvest is forecast to decline while meat prices dipped on October.

These trends in food prices contributed to the fact that the Food and Agriculture Organisation’s (FAO) monthly food price index was stable in October.

“The Food Price Index dipped to 192.3, technically its seventh consecutive monthly decline, but a marginal 0.2% drop from the revised September figure,” the FAO said in a statement. ‘Overall, the Food Price Index is at its lowest levels since August 2010.”

According to the organisation, the ongoing slight decline in the index is very good for food importing countries. Although South Africa is a net exporter of food, its major import of food is processed food.

The FAO said that dairy prices fell by 1.9% as butter and milk powder prices dropped due to increased output in Europe, where many producers are grappling with Russia’s ban on cheese imports. The Russian ban is in retaliation for sanctions against Russia for its involvement in the Ukraine.

The sub-index for dairy products dropped to 184.3, down 3.5 points from September and 66.8 points or 26.6% down from October 2013.

The recovery of pig production after several countries were hit by endemic porcine diarrhoea and growing cattle herds in Australia contributed to the decline in meat prices. The FAO’s Meat Price Index fell by 1.1% or 2.3 points from September to 208.9, still more than 10% above its level a year ago.

The Cereal Price index fell sharply as global wheat and maize production appeared set for record harvests but it stabilized in October as maize harvest delays in the United States and deteriorating prospects for Australia’s wheat crop led to firmer prices.

Lovers of something sweet, should take note of the 4.2% rise in the Sugar Price Index due largely to drought in parts of Brazil and reports that the sugarcane crop will be smaller than expected. The rise in the international sugar price is from a low level and despite October's gain, the price is still more than 10% lower than a year ago.

The FAO’s vegetable oils sub-index rose for the first time since March to 163.7 points in October, up 1% from September.

Palm oil production slowed down in Indonesia and Malaysia and combined with a revival in global import demand the increase was sustained. Soy oil prices weakened due to robust North American harvest prospects while sunflower seed oil quotations rose due to smaller than expected harvests in the Black Sea region.

by Hennie Duvenhage

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