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Asia Pacific Food Situation Update - October 2011

Situation Report
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FAO Food Price Index falls for third straight month

The FAO Food Price Index fell by 2 percent in September, finishing the month at 225 points, the third consecutive month that the index has registered slight declines. Nonetheless, the FPI was still ten points higher than a year ago, September 2010.

Weakening international prices for grains, sugar and oils drove the index down. Both wheat and maize registered price falls of 2 percent and 4 percent respectively since August. However, wheat was still 8 percent more expensive than during the same period the previous year, and maize was 45 percent more expensive. Increased supplies of both grains helped soften prices.

Rice was the grain that still registered price increases, rising for the fourth consecutive month. The benchmark Thai white 100 percent B sold for an average of USD 618 a tonne in September, a 6 percent increase over August and a 24 percent increase over a year ago. India’s relaxing of export restrictions on non-basmati rice helped prevent prices from rising even further.

The FAO Cereal Price Index slid by 2.3 percent on forecasts of higher total supply, and has generally been on a downward trend since April. The index is still 18 percent higher than at the same time last year, although 11 percent below its April 2008 peak. The FAO Sugar Price Index was 3.8 percent lower than in August on better harvests in Brazil, the world’s largest sugar producer, Europe, India, and Thailand. The Oils/Fats Index also fell 2.3 percent on plentiful supplies of palm oil from Southeast Asia and sunflower oil from the Black Sea region. The Dairy Price Index also declined to 218 from 221 in August as the price of butter fell by 3 percent.