Food price index climbs for second month: UN

Rome   :   The UN Food and Agriculture Organisation's price index rose for the second consecutive month in March, driven by robust increases in grain and dairy prices, especially those of wheat and maize, the agency said on Thursday.

The index averaged 172.8 points in March, 1.1 per cent higher than in February and 0.7 per cent above its value a year earlier, the FAO stated.

Declines in price quotations for sugar and most vegetable oils were more than offset by increases for maize, wheat and most dairy products, said the agency. The trade-weighted price index tracks international market prices for five major food commodity groups.

Worldwide cereal production hit a record level in 2017, up by 33 million tonnes from 2016, according to FAO's latest estimate in the Cereal Supply and Demand Brief, also released on Thursday.

However, world maize and wheat production was expected to fall this year on the basis of early forecasts, said FAO.

The FAO Cereal Price Index continued on its upward path, averaging 2.7 per cent higher than in February and 12.1 per cent above its March 2017 value. Wheat prices rose mostly on weather worries, including prolonged dryness in the US and cold wet conditions in parts of Europe.

Maize prices turned even firmer, driven by a combination of robust world demand and deteriorating crop prospects in Argentina.

The FAO Dairy Price Index was 3.3 per cent higher in March, as strong global demand pushed up butter, cheese and whole milk powder prices.

The climb in dairy prices in March was in contrast to sugar prices: the FAO Sugar Price Index dropped 3.4 per cent over the period and stood at 27.5 per cent below its value in March year, owing to large export availabilities, according to FAO.