The FAO Dairy Price Index averaged 142.3 points in September, up 6.8 points (5%) from August. The rise followed a sharp fall in the Index in the previous month. Despite the rise, the index for September is 45.5 points (24%) behind the average index for September 2014 and 107.9 points (43%) behind the September 2013 average price index.
The FAO Dairy Price Index consists of butter, skim milk powder, whole milk powder, and cheese price quotations; the average is weighted by world average export trade shares for 2002-2004.
While the prices of all dairy commodities firmed, those of milk powders exhibited the largest increase.
This was associated mainly with higher quotations from New Zealand, where a substantial reduction in payouts has caused farmers to scale-back production and indicate a reduction in supply.
The FAO Cereal Price Index averaged 154.8 points in September, nearly unchanged from August and 13.1% down year-on-year.
International cereal prices have been under downward pressure since the beginning of 2015, amid large inventories and generally good crop prospects.
Influenced by an expected decline in world maize production, coarse grain quotations have been relatively resilient compared to other cereal, subsiding only 1.4% compared to September 2014. Wheat is now over 20% cheaper than in September last year, following this season’s record production.
The annual average FAO Food Price Index for 2015 is tracking well behind previous years, at 166.9. The annual average FAO Food Price Index for 2014 was 201.8.
