The FAO Food Price Index averaged 116.0 points in February 2021, an increase of 2.8 points (2.4%) from the previous month. The highest level since July 2014. The index increase in February was mainly driven by the strong growth of sugar and vegetable oil indexes. The indexes of cereals, dairy products and meat also increased, but the magnitude was smaller.
The FAO Cereal Price Index averaged 125.7 points in February, up 1.5 points (1.2%) from the previous month and 26.3 points (26.5%) higher than the same period last year. Among the major coarse grains, international sorghum prices rose the most, driven by China’s continued strong demand. They rose by 17.4%month-on-month in February and 82.1%year-on-year. International corn prices have also climbed, although the month-on-month increase is only 0.9%. Corn export supplies decreased in February, and continued strong import demand supported a price increase of 45.5%from the previous year. Wheat export prices remained almost stable in February, but still rose 19.8%from the same period last year. The demand for low-quality indica and japonica rice has driven international rice prices to continue to rise slightly.
The FAO Vegetable Oil Price Index averaged 147.4 points in February, an increase of 8.6 points (or 6.2%) from the previous month, the highest level since April 2012. The continued strength of this index reflects the further strengthening of palm oil, soybean oil, rapeseed oil and sunflower oil prices. As international palm oil production was lower than expected, the market’s concerns about low inventories in major exporting countries triggered its price increase for the ninth consecutive month in February. At the same time, soybean quotations have maintained an upward trend, which mainly reflects the current global supply shortage before the new harvest in South America. The international prices of rapeseed oil and sunflower oil were supported by the EU’s 2021 production outlook lower than initially expected and the further tightening of export supplies in the Black Sea region. It is worth noting that rising crude oil prices also provided support for vegetable oil prices.
The FAO Dairy Price Index averaged 113.0 points in February, an increase of 1.9 points (1.7%) from the previous month, and it has risen for the ninth consecutive month, and it has reached nearly 40. High point of the month. International quotations for butter rose in February due to strong import demand from China, while export supply in Western Europe was limited due to a surge in internal demand triggered by the upcoming spring holiday. High import purchases and dry weather may reduce the impact of New Zealand’s export supply, and the quotation of whole milk powder has been raised. The price of skimmed milk powder has also risen, reflecting the lack of stocks in Europe and the tight export supply. In contrast, under the dual effects of reduced demand for spot supplies and high US inventories, cheese quotations are under pressure.
The FAO Meat Price Index* averaged 96.4 points in February, an increase of 0.6 points (0.6%) from the previous month, and it rose for the fifth consecutive month, but still fell year-on-year 4.1 points (4.0%). Due to tight supply in the main producing areas, international beef and mutton price quotations rose in February, and continued demand for the reconstruction of the Oceania herd led to a decline in processing volume, which further pushed up the upward trend. In contrast, pork quotations have shown a downward trend. This is due to a severe oversupply and lower Chinese purchases. At the same time, Germany’s continued ban on the export of pork to the Asian market has led to an increase in unsold pork. The reduction in Chinese purchases has also put pressure on global poultry meat prices, and the interruption of US supply caused by the winter storm is not enough to eliminate its impact.
The FAO Sugar Price Index averaged 100.2 points in February, which was 6 points higher than the previous month (6.4%). It rose for the second consecutive month and was recorded in 2017 The highest level since April. The main reason for the latest round of rise in global sugar quotations is the decline in production in major producing countries and strong import demand in Asia, resulting in a tighter global supply in 2020/21. Logistics constraints have hindered Indian shipments, and the increase in crude oil prices may cause Brazil, the world’s largest sugar exporter, to shift more sugarcane crushing to ethanol production, thus driving up prices. However, Thailand’s production recovery expectations and India’s harvest prospects for 2021/22 inhibited further expansion of this month’s gains.
* Unlike other commodity categories, when calculating and publishing the FAO Food Price Index, most of the prices used to calculate the FAO Meat Price Index are still uncertain ; Therefore, the meat price index in recent months is obtained after comprehensively forecasting prices and actual prices. This sometimes requires significant adjustments to the FAO Meat Price Index to arrive at the final figure, which in turn may have an impact on the FAO Food Price Index.