Prices of all the commodity groups in the index registered gains last month with oils increasing the most, followed closely by cereals, sugar, dairy products and meat. At its new level of 214 points, the index stood 7 percent lower than in January of last year, however.
“There is no single narrative behind the food price rebound – different factors are at play in each of the commodity groups,” said Senior Grains Economist Abdolreza Abbassian. “But the increase, despite an expected record harvest and an improved stocks situation, and after six months of falling or stable prices, highlights the unpredictability prevailing in global food markets,” he added.
“I can’t see that the usual suspects – the value of the dollar and oil prices – were much involved in January. But one reason is poor weather currently affecting key growing regions like South America and Europe. It has played a role and remains a cause for concern,” he concluded.
The FAO Cereal Price Index averaged 223 points in January, up 2.3 percent (5 points) from December. International prices of all major cereals with the exception of rice rose, with maize gaining most, 6 percent. Wheat prices also gained, though less significantly.
Prices mostly reflected worries about weather conditions affecting 2012 crops in several major producing regions. Fears of decline in export supplies in the Commonwealth of Independent States also played a part.