FAO food price index dips in October as cereals, dairy and meat decline

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FAO food price index declines

Highlights

FAO Food Price Index falls to 133.9 in October from 135.6 in September, led by declines in cereals, dairy, and meat prices.
Cereal price index drops 4.5% month-on-month and stands 12.6% lower year-on-year, driven by weaker wheat and maize quotations from improved supply prospects.
Sugar prices surge 6.6% in October to the highest since December 2024 on Brazil harvest disruptions, while vegetable oils rise 0.3% amid soybean and sunflower oil gains.

October index movement and commodity drivers

As reported by Reuters, citing the United Nations' Food and Agriculture Organization, its Food Price Index averages 133.9 points in October, down from a revised 135.6 in September.

The monthly decline is driven by lower prices for cereals, dairy and meat. FAO's cereal price index falls 4.5% from September and stands 12.6% below a year earlier as wheat and maize quotations weaken.

Wheat prices ease on weak import demand and improved production prospects, especially in Argentina. FAO says expectations of easing constraints on Black Sea export flows add downward pressure, although continued disruptions to Black Sea logistics limit the decline.

Maize prices also ease after reaching a three-year high in September, pressured by the U.S. harvest, expectations of ample supplies in South America and renewed prospects of easing tensions in the Black Sea region.

Vegetable oil prices edge up 0.3%, as higher soybean and sunflower oil prices more than offset a fall in rapeseed oil prices. Sugar prices rise 6.6%, marking a fourth straight monthly increase and reaching the highest level since December 2024 after rainfall disrupts harvesting in Brazil.

Annual price trend and market implications

The broader index remains 5.9% higher than a year earlier, though it is still 16.4% below its March 2022 peak. The latest reading points to continued volatility across agricultural markets, with weather, harvest expectations and Black Sea trade conditions still shaping price formation.

In other categories, the dairy index falls 1.1% as lower butter and cheese prices linked to ample supplies and subdued demand outweigh gains in milk powder. The meat index declines 1.2% and remains slightly above its year-earlier level, as pig, ovine and bovine meat prices fall.

Strait of Hormuz shipping disruptions and their spillover into global food supply chains were the focus of our earlier report, which described how higher fuel and fertilizer costs were starting to affect harvests, planting decisions, and farm yields. We also noted that these logistics bottlenecks—alongside weather impacts and ongoing Black Sea-related uncertainty—were expected to keep upward pressure on agricultural commodity prices and heighten food-security risks, particularly in parts of Asia and Africa.

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