GLOBAL – The recent FAO index report has revealed that while global food commodity prices remained relatively steady in September, there was a significant surge in sugar prices, reaching their highest level in almost 13 years due to the impact of El Niño.

Compiled by the Food and Agriculture Organization of the United Nations, the FAO Food Index showed minimal change last month.

The decline in prices of vegetable oils, dairy products, and meat offset the increases in the sugar and cereal price indices.

The overall index stood at 121.5 points, representing a 10.7% decrease from the previous September and a 24% drop from its all-time high recorded in March 2022.

Sugar prices saw a noteworthy increase of 9.8% from August, marking the second consecutive monthly rise and reaching their highest level since November 2010.

The surge was primarily attributed to growing concerns about a tighter global supply outlook, with early forecasts indicating production declines in countries such as Thailand and India due to drier-than-normal weather conditions associated with the ongoing El Niño event.

The FAO’s cereal index increased by 1% from the previous month, driven by a 5.3% rise in international coarse grain prices.

Maize prices, in particular, increased by 7%, driven by strong demand for Brazilian supplies, slower farmer selling in Argentina, and increased barge freight rates in the US.

The All Rice Price Index experienced a slight decline of 0.5% month-on-month in September but remained 27.8% higher than the previous year.

This decline was influenced by India’s decision to ban exports of non-basmati white rice in July as a measure to control rising prices.

The ban was announced by the government and expected to apply immediately to semi- or wholly milled non-basmati white rice.

According to the Ministry of Consumer Affairs, Food and Public Distribution of India, the domestic prices of rice were on an increasing trend and retail prices had increased by 11.5% over 12 months and 3% in the past months.

Vegetable oil prices decreased by 3.9% month-on-month due to lower world prices for palm, sunflower, soy, and rapeseed oils.

Dairy prices continued their downward trend for the ninth consecutive month, falling by 2.3%. Meat prices also registered a marginal drop from August, with international pig meat prices decreasing.

Despite these fluctuations, the global food commodity market remains relatively stable, with sugar being a notable exception due to the El Niño-related supply concerns.