Food price index stabilises
The FAO food price index remained fairly stable in June, compared to both the previous month and the previous year. This comes after five consecutive months of rising prices.
An increase in both dairy and meat prices have driven much of the increases in the first half of the year. Dairy prices rose rapidly over the first quarter but are now dropping back. The global dairy trade index has been trading lower at the last couple of auctions on the back of lower prices for cheddar and butter.
Meat prices have been rising consistently in 2019, and continued to do so in June. Strong import demand for East Asia continues to support pork prices. African Swine Fever continues to limit domestic production and drive protein demand. For sheep meat, strong import demand and a shortage of product, especially from major producers Australia and New Zealand where particularly high farm gate prices have been recorded, are also influencing the meat price index. Despite also having strong demand, beef prices were relatively stable due to a well-supplied global market.
Meanwhile, in recent months cereal prices have been increasing. This has been predominately driven by the increase in grain market prices, driven by uncertainty in US maize plantings.