According to the latest FAO Food Price Index issued on December 7, 2017, in Rome, Global food prices declined marginally in November and the decline was driven by a 4.9 percent monthly drop in the FAO Dairy Price Index.
Lower dairy prices offset a sharp increase in sugar and vegetable oil quotations as the index averaged 175.8 points in November, down 0.5 percent from the previous month while still up 2.3 percent from a year earlier.
By contrast, the FAO Sugar Price Index jumped 4.5 percent on the month, due to a drop in exports from Brazil and concerns that former oil prices may lead more production to be used for producing ethanol.
The FAO Vegetable Oil Index also rose to 1.2 percent during the month, led by higher soy oil prices, while palm oil values declined due to higher-than-expected stock levels in Malaysia.
The FAO Cereal Price Index registered a small rise in November, led by a 1.1 percent increase in international rice quotations.
FAO has also reviewed its global cereal forecasts due to recent boom and now expects worldwide supplies to rise to nearly 3 331 million tonnes, an all-time high.
They forecast a global cereal production of 2,627 million tonnes which is 13.4 million tonnes higher than its initial October projections. It further states that there will be much maize production among other cereals especially in the U.S and Indonesia.
Global wheat production is now forecast at 754.8 million tonnes, while rice output is projected at 500.8 million tonnes. It stated further that rice and wheat would be consumed more by humans while other grains would be used for feeding animals or livestock.
The FAO Food Price Index is a trade-weighted index tracking international market prices for five key food commodity groups: major cereals, vegetable oils, dairy, meat and sugar.