The FAO Food Price Index averaged nearly 162 points in October, up 3.9 per cent from September, while still down 16 percent from a year earlier.

FAO's latest Cereal Supply and Demand Brief slightly trimmed its October 2015 forecast for global cereal production and now projects production at 2.53 billion tonnes, 1.1 per cent below last year's record output.

Half of the forecast cut reflected dimmer expectations about maize crops in India and Ukraine, mostly due to adverse weather. Drought in Thailand prompted a reduction in the seasonal rice harvest projection.

At the same time, the forecast for global wheat production has been raised, largely reflecting a bigger harvest in the European Union than earlier anticipated.

World cereal stocks are expected to remain at a comfortable level, with global wheat inventories rising further, reaching their highest level in 15 years.

Drought and rain trigger a sugar high

FAO's Sugar Price Index led the overall rise, surging 17.2 per cent from September, amid fears that excessive rains in the main growing regions in Brazil would impact the sugarcane harvest and also reports of drought in India and Thailand. The sharp jump reversed the sub-index's decline since February.

Intensifying concerns that El Niño may hamper next year's palm oil supply in Indonesia, coupled with slow progress in soybean plantings in Brazil, due also to unfavourable weather, spurred a 6.2 increase in the FAO Vegetable Oil Price Index.

The Dairy Price Index averaged 155.6 points in October, up 13.4 points (9.4 per cent) from September. Concerns that milk output in New Zealand would fall during the current June/May dairy year caused Oceania prices to rise in both September and October, with export prices from the EU following suite – although remaining below quotations in Oceania.

Prices of whole milk powder surged by almost 21 per cent over the month, with all the other dairy products also incurring marked increases.

The Meat Price Index averaged 168.8 points in October, essentially the same level as in September, prolonging an extended period of overall stability that has been evident since March 2015.

Of the meats covered, only ovine meat registered a substantial change, rising by 8 per cent – due to constrained export availability in Oceania; prices of the other categories of meat were little changed.