The FAO price index, which tracks the development of the prices of the most traded foods on the global market, fell to 120.6 in October from the September value of 121.3 points. The figure for October is the lowest since March 2021. The partial index of cereals fell by 1.3 to 125 points.
“Wheat prices on world markets fell by 1.9 percent in October. This reflects generally higher-than-expected stocks in the United States, as well as strong competition among exporters,” the FAO report said.
Prices of dairy products went against the downward trend in October, the index of which rose by 2.4 to 111.3 points. But before that, prices fell for nine months in a row. “World milk powder prices increased the most, mainly due to increased import demand…especially in Northeast Asia,” FAO reports.
In a separate report on the development of supply and demand for cereals, the organization confirmed the previous outlook, according to which cereal production will reach 2.819 billion tons this year. This would mean an increase of 0.9 percent compared to last year.
“As for 2024, winter wheat planting continues throughout the Northern Hemisphere. Area increases are expected to be limited, reflecting softer harvest prices this year,” FAO said.
The report also says that the effects of the war with Russia continue to be felt in Ukraine, including limited access to fields and low prices for primary producers, along with less-than-ideal weather conditions. As a result of the war, we can also expect a reduction in the areas for growing wheat.