Dairy, International Agriculture News

Rising diary prices push FAO Food Price Index higher

ROME – World food prices started 2019 on the rise, climbing 1.8 percent compared to December, according to the Food Price Index released Thursday by the United Nations Food and Agriculture Organization (FAO).

FAO said rising dairy prices were the main culprit behind January’s rise, with prices in that category climbing 12.2 percent compared to December.

FAO said milk and cheese prices rose on the back of lower production in Europe as well as a technical correction after declines over the last three months of 2018.

Despite the three-point increase to 164.8 for the overall index, prices were still 2.2 percent lower than they were a year ago when the index averaged 168.4 points. Prices for rice and cereals, the biggest component in the FAO index, were mostly unchanged compared to December, though the partial shutdown on the U.S. government in January meant some reports on wheat and corn production in that country were not available.

FAO said the small decline in those figures was offset by a modest increase in rice prices, due to more demand for Japonica rice in China and Japan and a stronger currency in Thailand, a major rice exporter.

Among other components of the broad index, FAO said prices for oils and fats rose 4.3 percent compared to December, sugars rose 1.3 percent, and meat prices were unchanged.

The monthly FAO Food Price Index is based on worldwide prices for 23 food commodity categories covering prices for 73 different products compared to a baseline year.

The next index is scheduled to be released March 7.