With growth attributed mostly to cheese and palm oil quotations, the FAO Food Price Index rose almost seven percent on figures for August 2015. Prices for cereals like wheat, maize and rice fell.
The dairy index rose 8.6 percent during August, with prices rising for cheese, whole milk powder and butter in particular. This was likely due to a change in market sentiment linked to falling milk production in the EU, and a tightening of export supply prospects after a modest opening to the dairy year in the Asia-Pacific region.
Vegetable oil prices also grew by 7.4 percent, driven by strong prices for palm oil. This was due to lower expected output from palm oil producers in Malaysia, and rising demand for imports from China, India and Europe.
The price of sugar rose 2.5 percent between July and August, placing the commodity at its highest in almost six years. Global meat prices remained steady, rising 0.3 percent since July.
The FAO raised its forecast for global cereal production or 2016 by 22 million tonnes to 741 million tonnes, due to an anticipated record global wheat harvest this year, as well as a bumper maize harvest in the US. Russia is also predicted to overtake the European Union to become the world’s largest wheat exporter in 2016/17, after wet weather in Europe damaged crops.