Global prices for cereal grains, dairy products and vegetable oils fell during September, pulling the Food Price Index to its lowest reading in at least a year, said the UN Food and Agriculture Organization. Corn prices dropped by more than 4 percent, “mostly on expectations of a very large crop in the United States and ample supply prospects globally,” said the FAO.
Vegetable oil prices were down for the eighth month in a row and dairy prices fell for the fourth consecutive month. Like cereal grains, large supplies of dairy and vegetable oils weighed on prices. Meat prices fell marginally while sugar prices were up by nearly 3 percent. The Food Price Index is a measure of the international prices for a basket of food commodities.
In a companion report, the FAO estimated global grain production of 2.59 billion tonnes, a marginal increase from the previous estimate but 2.4 percent below the record set in 2017. “Significant drawdowns” of wheat inventory in the European Union and Russia, both of which suffered drought this season, will result in a 7 percent decline in world “carryover” supplies. They were record-large at the start of 2018/19.