The FAO Food Price Index steady in Feb, but 14.5 percent weaker than a year ago

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The FAO Food Price Index was stable in February, as falling sugar and dairy prices offset a substantial jump in vegetable oil prices from the previous month, the UN food agency said.

food price index feb 16Averaging 150.2 points for the month, the FAO Food Price Index was virtually unchanged from a revised 150.0 points in January and down 14.5 percent from a year ago, it said in a statement.

FAO also issued its first forecast for the world’s 2016 wheat harvest, projecting 723 million tonnes of total production, about 10 million tonnes below last year’s record output.

The FAO Food Price Index is a trade-weighted index tracking international market prices for five key commodity groups: major cereals, vegetable oils, dairy, meat and sugar.

Diverging from February’s generally stable trend was a sharp increase in the FAO Vegetable Oil Price Index, which rose 8.0 percent from the previous month. That was led by a 13 percent surge in palm oil, which gained on reports of falling inventories and a poor production outlook in the near future. Soy oil prices also firmed as a result.

But other staple commodities more than absorbed that rise. The FAO Sugar Price Index declined 6.2 percent from January, buoyed by strong global inventories and improved crop conditions in Brazil, the world’s largest producer and exporter.

The FAO Dairy Price Index fell 2.1 percent on the month amid sluggish imports, especially by China.

Prices of the world’s staple grains were broadly stable. The FAO Cereal Price Index inched down only around half a percentage point from the previous month but was 13.7 percent lower than a year earlier. Wheat prices fell 1.5 percent, maize prices slipped only slightly, while rice prices rose modestly.

Meanwhile, the FAO Meat Price Index rose slightly, buoyed by supply constraints for beef from Australia and the U.S. as well as support for private storage of pig meat in the European Union. Poultry prices fell, reflecting lower feed costs.

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