The FAO’s latest Food Price Index for October indicates an increase in its international price index, up 3% on the previous month. After rising for three consecutive months, the index now stands at its highest level since July 2011. The latest increase was primarily led by strengthening in the world prices of vegetable oils and cereals.
Conversely, the FAO’s Meat Price Index in October was down by nearly 1% on September. Even though pig meat production is grain-intensive, international quotations for pig meat fell, principally underpinned by reduced purchases from China. Beef and veal prices also fell, reflecting a sharp decline in quotations for supplies from Brazil amid market uncertainly over the trading implications of BSE concerns. There were price rises for poultry and sheep meat, but these were not enough to counteract the fall for the other meats.
The FAO’s Cereal Price Index was up 3% from September and was 22% above its level one year ago. International prices of all major cereals increased month-on-month. The FAO Vegetable Oil Price Index was up by nearly 10% month-on-month, marking an all-time high.
With cereals and oilseeds prices disproportionately high relative to the price of meat, profitability will be a challenge for producers everywhere.
By Bethan Wilkins / AHDB