The index dropped 1.3 points (0.8%) below June and 1.4% below the corresponding month last year.

According to the FAO, the slight decline follows five consecutive monthly increases and was largely caused by drops in international quotations of grains and vegetable oils, which outweighed better dairy, meat and sugar prices.

Cereals

The FAO cereal price index saw the biggest drop among the food commodities. It averaged 148.1 points in July, down 8.8 points (5.6%) from June and 11% below the July 2015 level. Among the major cereals, corn values dropped sharply as weather conditions in the key growing regions of the United States proved more favourable than was predicted. Wheat prices also fell in July.

Vegetable oil

The vegetable oil price index averaged 157.4 points in July, down 4.6 points (2.8%) from June and falling for the third consecutive month. The slide was mainly on account of palm oil, whose price dropped to a five-month low as regular rainfall underpinned a seasonal recovery in production in southeast Asia, while global import demand remained low. International prices for soy, sunflower and rapeseed oil also fell based on higher-than-anticipated supplies.

Dairy

While cereal and vegetable oil prices fell, the FAO dairy price index showed that dairy was up in July, averaging 142.3 points, up 4.3 points (3.2%) from June. Prices rose for all the dairy commodities that compose the index, in particular for butter. Yet, they remain at very low levels compared to recent years. Meanwhile, in Oceania (Australia and New Zealand), generally favourable rainfall at the start of the 2016/17 milk year has improved yield prospects.

Meat

It was the same story for meat, which also rose last month. According to the index it averaged 159.9 points in July, 2.0 points (1.3%) higher than its revised June value. All meat products covered by the index saw prices firm, in particular pigmeat, underpinned by limited availability. Notable developments included a shortage of pigs for slaughter and lighter slaughter weights in the EU and reduced output of sheep and bovine meat in Oceania, caused by herd rebuilding.

Read more

Everything working in favour of pig industry, except price