FAO's Food Price Index is a trade-weighted index tracking international market prices for five major food commodity groups. While 2016 marked the fifth consecutive year the index has fallen, January marked its sixth monthly increase in a row.

The FAO Cereal Price Index rose 3.4 per cent from December to a six-month high, with wheat, maize and rice values all increasing. Wheat markets reacted to unfavourable weather conditions hampering this season's crops as well as reduced plantings in the United States of America, while higher maize prices mostly reflected strong demand and uncertain crop prospects across South America.

Worldwide inventories of cereals are on course to reach an all-time record level by the end of seasons in 2017, according to FAO's latest Cereal Supply and Demand Brief.

The FAO Dairy Price Index was unchanged from December, a marked departure from the 50 per cent increase it posted between May and December last year.

The FAO Meat Price Index was also practically unchanged, with a rise in bovine meat quotations - the result of herd rebuilding in Australia - offset by lower prices of ovine and other meats.

The FAO Sugar Price Index surged 9.9 per cent in the month, and the FAO Vegetable Oil Price Index rose 1.8 per cent, due mostly to low global inventory levels of palm oil coupled with a slow production recovery in Southeast Asia.