Quotations for Sugar, Vegetable Oils Drive Food Price Index lower

Oluchi Chibuzor 

The significant decreases in the international quotations for vegetable oils and sugar, has caused a decline in the benchmark for world food commodity prices.

This is coming as the Food and Agriculture Organization ( FAO)  food price index declined in January, averaging 124.9 points during the month, down 1.6 percent from its December level, the United Nations body reported on its website.

The index, which tracks monthly changes in the international prices of a set of globally-traded food commodities, was 6.2 percent higher than its corresponding level one year ago but remained 22.0 percent below its peak reached in March 2022.

According to the index, vegetable oil price index decreased by 5.6 percent from the previous month, reversing a recent increase, though it remained 24.9 percent higher than a year ago. 

“The decline in January was mainly driven by lower world prices of palm and rapeseed oils, while those for soy and sunflower oils remained stable,” FAO Index stated.

However, the FAO Sugar Price Index was down 6.8 percent from December and 18.5 percent from its year-earlier level, mainly due to improved global supply prospects as a result of generally favourable weather in Brazil and the Indian Government’s decision to resume sugar exports.

The FAO Meat Price Index also dropped, falling by 1.4 percent in January, as lower international ovine, pig and poultry meat prices outweighed an increase in bovine meat quotations.

Meanwhile, the FAO Cereal Price Index increased by 0.3 percent from December but remained 6.9 percent below its January 2024 level.

Also according to the report, Wheat export prices dropped only slightly, while maize prices increased, partly due to lower production and stock forecasts for the United States of America.