Global food prices surge as wheat, palm oil pushes up index
Global food prices rose for a second consecutive month in September due to tightening supply conditions and robust demand for wheat and palm oil, the Food and Agricultural Organisation (FAO) said in its report.
The United Nations food agency which tracks monthly changes in the international prices of commonly-traded food commodities, said that the food price index averaged 130 points in September, up 1.2 percent from August and 32.8 percent higher than in September 2020.
According to the report, the cereal price index in September increased by 2 percent from the previous month, with world wheat prices up almost 4percent owing to tightening export availability amid strong demand.
“Among major cereals, wheat will be the focus in the coming weeks as demand needs to be tested against fast-rising prices,” Abdolreza Abbassian, FAO senior economist said.
FAO also projected record global cereal production in 2021 but said it would still be below consumption needs.
World cereal output in 2021 is seen on course to hit a record of 2 800 million tons, but that is less than the anticipated consumption requirements in 2021/22 marketing season, according to new projections in FAO’s latest cereal supply and demand brief.
The FAO Vegetable Oil Price Index was up 1.7 percent on the month – and about 60 percent from September 2020 – as international palm oil prices reached 10-year highs due to robust global import demand and concerns over migrant labour shortages impacting production in Malaysia.
Also, the dairy price index increased by 1.5 percent from August, as solid global import demand and seasonal factors in Europe and Oceania drove up international quotations for all dairy products, especially butter.
The sugar price index was 0.5 percent higher from the previous month – and 53.5 percent from a year earlier – underpinned by adverse weather conditions and higher ethanol prices in Brazil, the world’s largest sugar exporter.
The slowing global import demand and good production prospects in India and Thailand curbed the upward pressure.
Similarly, the meat price index was virtually unchanged in September from the previous month and up 26.3 percent on an annualized basis.
FAO now anticipates 776.7 million tons of wheat to be harvested in 2021, with expected higher yields in Eastern Europe and Australia offsetting weather and planting-driven output drops foreseen in Canada and Russia.
The forecast for the global production of coarse grains is now pegged at 1 504 million tons, with global sorghum and barley harvests rising faster than that for maize.
World rice production is foreseen at 50 million tons, a new record, primarily reflecting more buoyant expectations from India’s main crop.