Sharply higher prices for cheese, butter and sugar pushed up the FAO Food Price Index by 0.7 percent, continuing an unbroken rise from July. The index, which tracks prices for five groups of foods, has been on the rise throughout this year and is now 9 percent higher than one year ago.
At the same time that dairy and sugar prices rose, meat and vegetable oil prices fell, with the result that the FAO index rose slightly overall. Disappointing harvests in Brazil, the No. 1 sugar grower and exporter, and in India, the No. 2 sugar producer, triggered a 3.4 percent climb in prices. Dairy prices rose because of smaller EU stocks and strengthening demand by dairy-importing countries. Meat and vegetable oil stockpiles are mounting, which has depressed prices for both.
U.S. wheat farmers are likely to scale back on sowings of winter wheat in the face of low market prices, said the companion FAO Cereal Supply and Demand Brief. Russia and Ukraine are expected to expand wheat plantings. “In the EU, the 2017 winter wheat crop is being sown under generally favourable conditions, with recent wet weather expected to benefit early crop development,” said FAO.