Global food prices up 1% in March: FAO

Thursday, 18 April 2013 00:56 - - {{hitsCtrl.values.hits}}

Global food prices rose one% in March compared to the previous month, driven mainly by an 11% increase in dairy products, according to the UN body Food and Agriculture Organisation (FAO).

FAO has the Food Price Index (FPI) to measure the monthly change in global prices of a basket of food commodities.

“FPI averaged 212 points in March 2013, up 1% from February. The small increase in March was mainly the result of an 11% surge in the dairy sub-index, which carries a weight of 17% within the FAO Food Price Index,” the FAO said on its Web site.

However, food prices during last month were lower by 1.7% compared to March 2012, it added.

Stating that there was exceptional volatility in dairy items last month, the UN body said the FAO Dairy Price Index jumped 22 points in March to 225, one of the largest recorded changes.

The price surge was caused by hot, dry weather in Oceania, which has led to milk production falling off steeply and a concomitant reduction in the processing of dairy products in the region, it said.

Dairy prices used in the price index calculation are based on the exports of New Zealand, as it is the world’s largest dairy exporter, accounting for about one-third of global trade.

Export prices for dairy products have also risen for other important exporters, such as the EU and the US, but not to the same degree, it added.

However, the prices of other major commodities remained stable in March. The FAO Cereal Price Index averaged 244 points, unchanged from February.

While maize prices increased last month on a fall in exportable supplies from the US, lower wheat prices on prospects of a good world harvest offset those increases.

The FAO Oils/Fats Price Index fell 2.5% from February, mostly due to soya oil prices, which dropped on account of favourable weather conditions in South America, a record 2013 US soybean crop and a cancellation of purchases by China. Palm oil prices were also slightly down.

The FAO Meat Price Index averaged nearly 176 points in March, down 2% from February, whereas the FAO Sugar Price Index edged higher 2.8 points or 1% from February.