FAO: food price index back up 0.4%, pressured by sugar

The food price index of the United Nations food and Agriculture Organization (FAO) retreated 0.4 percent in November compared with October, to 171.3 points. Despite the retraction, the indicator is still 10.4 percent compared with the same month last year. The slight monthly drop occurs after nearly a year of constant valuations for the index. The November performance was pressured by the sharp drop in sugar prices, which more than covered the strong recovery of vegetable oils.


The price index closed at sugar 287.1 points in November, down 28 points (8.9%) in comparison with October-first indent after six months. The negative performance was pressured by weakening the real against the dollar, which stimulates the Brazilian exports of the food. In the same direction, the price of cereals retreated 0.6% and 7.9% in October compared to November 2015, to 141.4 points. The strengthening of the dollar and the large stocks contributed to the bias bassist, which persists in the markets for cereals. In addition, the good harvest prospects for Argentina and Australia also weighed on prices.

Already the international price of meats ended stable before October, 161.5 points. The low prices of ovine meat, pork and chicken were counterbalanced by increased prices of beef-is last fall in stocks was sustained by household in Australia. Against the grain, dairy index rose 3.6 points (1.9%) compared with October, to 186.4 points. The quotations advanced mainly for full milk powder (WMP) and also the butter. Firm demand in the Middle East and North Africa, besides China, combined with the limited availability of New Zealand, the main global supplier, led the prices of WMP to jump 9%.

Leading the high, vegetable oils rose 7.6 points (4.5%) compared with October, to 175.6 points in November, the highest level since August 2014. The motion was sustained mainly by Palm oil, whose prices have skyrocketed on lower production in Southeast Asia and a tight inventory estimate.