Tuesday, January 26, 2021

Global food prices continue rising

 The index the United Nation’s Food and Agriculture Organization uses to track global food prices rose again in October.

It averaged 100.9 points in October 2020, up 3.1 per cent from September and six per cent above October 2019.

The FAO Cereal Price Index climbed 7.2 per cent from the previous month and 16.5 percent above October 2019.

The surge was mainly driven by wheat prices amid shrinking export availabilities, poor growing conditions in Argentina and continued dry weather affecting winter wheat seeding in Europe, North America and the Black Sea region.

 Corn, feed barley and sorghum prices also remained under upward pressure in October while rice declined.

The FAO Vegetable Oil Price Index gained 1.8 percent during the month, posting a nine-month high, led by firmer palm and soy oil prices.

The FAO Dairy Price Index rose 2.2 percent from September, with cheese rising the most, followed by skim milk powder, whole milk powder and butter.

The FAO Meat Price Index declined 0.5 percent from September, marking the ninth monthly decline since January, driven by drop in pork. Beef and poultry meat prices also fell.

Cuts in world production forecasts this month for corn, wheat and rice, amidst a faster pace in exports in response to strong global import demand, are forecast to reduce inventories, especially among the major exporters.  FAO has lowered its forecast for world cereal inventories by the end of seasons in 2021 by 13.6 million tonnes since October to 876 million tonnes, now falling below the 2017/18 record.

The resulting global cereal stock-to-use ratio in 2020/21 stands at 31.1 percent, still highlighting relatively comfortable global supply prospects in the new season.