International agricultural commodity prices fell in June for the first time in 2018. Most markets have generally taken-on a weaker tone recently largely because of rising tensions in international trade relations, Food and Agriculture Organization of the United Nations (FOA) said.
The FAO food prices index averaged at 173.7 points in June, falling 1.3% from its level in May.
The decline was driven mainly by the lower prices of reference prices for wheat, maize and vegetable oils including those made from soybeans.
The FAO cereal Price Index averaged 166.2 points in June, down 6.4 points (3.7%) from May but still nearly 8 percent higher than its level in the corresponding period last year. The decline in June was driven by relatively sharp falls in maize and wheat quotations, while rice prices rose. The FAO vegetable oil price index averaged 146.1 points in June, down 4.5 points (3%) from May, marking its fifth consecutive fall and 29-month low. The drop was driven by lower quotations for palm, soybean and sunflower oils.
The rise of trade tensions between the United States and its trading partners, particularly China, particularly affected the export prices of soybean originated US products, while the Dollar's downward pressure exerted further decline.
The FAO dairy price index averaged 213.2 points in June, down 2 points (0.9%) from May but still 2 percent higher than the corresponding month last year.
The FAO meat price index averaged 169.8 points in June, up marginally (0.3%) from May but still down 3.3 percent from June 2017. The small month-on-month increase was largely driven by an upswing in ovine meat values as well as a small rise in pig meat prices, while bovine and poultry price quotations fell slightly.
The FAO sugar price index averaged 177.4 points in June, up 2.1 points (1.2%) from May, marking the first increase after six months of consecutive declines. The rise in international sugar prices was mostly due to worries over sugar production prospects in Brazil, the world's largest sugar producing and exporting country, as dry weather conditions continued to negatively affect sugarcane yields.