June world food price index sees its first increase in 2020

The UN Food Agency reports that world food prices rose in June, marking their first increase of 2020 and rebounding after steep falls triggered by the coronavirus crisis.
calendar icon 2 July 2020
clock icon 2 minute read

According to reporting in Reuters, the FAO food price index, which tracks monthly price changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 93.2 points last month, gaining 2.4 percent on May 2020’s report.

The FAO says it has re-evaluated all of its indices, shifting the base period to 2014-2016 instead of using 2002-2004. “As trade patterns evolve, it is imperative to update the base period to ensure that the weighted basket remains relevant,” it said.

As market uncertainty persists, the prices of vegetable oils, sugar and dairy products rebounded to multi-month highs after sharp declines in May, while cereals and meat indices, most prices remained under downward pressure.

The vegetable oil price index rose 11.3 percent in June, reversing four consecutive months of falls.

The FAO said that the sugar index rose 10.6 percent month-on-month, pushed up by reports of backlogs in Brazilian ports due to coronavirus containment efforts.

The dairy index climbed 4 percent but all its components remained below where they had been before the pandemic swept the world.

The cereal price index slipped 0.6 percent from May, with downward pressure on wheat prices intensifying last month, due partly to improved production prospects in a number of major exporting countries, especially in the Black Sea region. By contrast maize prices were firmer in June, supported by some recovery in demand and adverse growing conditions in the United States, FAO said.

The meat price index also slipped 0.6 percent on the month, with quotations for poultry and bovine meats easing because of increased export availabilities in major producing regions.

FAO also revised up its forecast for the 2020 cereal season by some 9.3 million tonnes, foreseeing global output of almost 2.790 billion tonnes -- a 3 percent increase on 2019's record harvest. The bulk of the monthly increase reflected an upward revision to Australia's wheat production estimates.

Read more about the index here.

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