Food drink UPGRADE 1-World food cost index increases in July, extending rebound – Reuters

PARIS (Reuters) – World food rates increased in July led by vegetable oils, dairy items and sugar, extending a rebound from the previous month following sharp falls triggered by the coronavirus pandemic, the United Nations food company said on Thursday.

The Food and Farming Organization’s food rate index, which determines month-to-month changes for a basket of cereals, oilseeds, dairy products, meat and sugar, averaged 94.2 points in July versus a somewhat revised June figure of 93.1 points.

” Comparable to June, more boosts in the prices of vegetable oils, dairy items and sugar surpassed lower costs in the meat markets in the middle of general constant value of the cereal price index,” the FAO said in a statement.

The company’s grease cost index climbed up 7.6%in July to reach a five-month high.

Palm oil was buoyed by expected production slowdowns, restored worldwide demand and lengthy migrant labour scarcities, while soyoil and rapeseed oil were underpinned, respectively, by tightening up supply in Brazil and fresh demand in Europe, it said.

Grease demand had been curbed earlier in the year by lockdown procedures to counter the novel coronavirus, dampening restaurant and biofuel demand.

In dairy, all items tracked by the FAO rose last month, helping the dairy cost index increase 3.5%and climb back above the pre-pandemic level, the firm said.

Milk powders rose due to strong import need by Asian purchasers amid concern about export accessibilities in Oceania. Butter and cheese were supported by robust import demand but remained listed below pre-pandemic levels, FAO said.

Typical sugar rates increased 1.4%, with assistance from rising energy rates and drought-reduced production in Thailand, partially balanced out by strong sugar crush volumes in Brazil.

On the other hand, the FAO’s meat index slipped 1.8%and was 9.2?low the year-earlier level, as global import demand continued to lag accessibility despite coronavirus-linked disturbances to slaughtering.

The cereal index was almost unchanged, with sharp gains for maize (corn) and sorghum linked to Chinese purchases of U.S. suppliers offset by weaker rice quotations and stable wheat costs.