The FAO Food Price Index averaged 170.8 points in February, up 1.1% from the previous month and now just 2.7% below its year-ago level. The FAO Dairy Price Index saw an increase of 6.2%.
The FAO Food Price Index is a measure of the monthly change in international prices of a basket of food commodities. It consists of the average of 5 commodity group price indices, weighted with the average export shares of each of the groups for 2002-2004. The 5 price indexes are:
The FAO Food Price Index (FFPI) averaged 170.8 points in February 2018, 1.1% (1.8 points) higher than in January but 2.7% below its value in the corresponding period last year. Higher international prices of dairy and cereals contributed to the month-on-month increase in the value of the FFPI, whereas the prices of sugar and vegetable oils fell while those for meat remained steady.
The FAO Dairy Price Index averaged 191.1 points in February, up 11.2 points (6.2%t) from January but still slightly below the corresponding period last year. International price quotations across all 4 categories of milk products that constitute the index rose, supported by strong import demand amidst lower than expected milk output in New Zealand.
Butter price quotations increased by nearly 6% after declining for 4 consecutive months since reaching its recent peak in September 2017. Price quotations for Cheese and Whole Milk Powder (WMP) also rose, underpinned by strong demand in Europe and Asia, while firm global demand pushed up Skim Milk Powder (SMP) values.